The market had been sluggish for the past couple of weeks, but record highs masked ugly internal trends. Persistently negative breadth indicated a problem for the market, as soon as mega-cap names began to stumble. Well, they stumbled in yesterday’s session and again after the closing bell.

The good news is that these stocks are down, despite the best possible earnings and guidance results.  It's not uncommon for this to happen, even if it seems counterintuitive. Anyone in these names for the last few years has dealt with a lot worse. The number of down days this year is also in line with history.

Tough Sledding

It was a defensive day, as only four sectors were higher, but not the ones with long coattails that would have carried the entire index. There are not a lot of household names on the leaderboard.

Apollo Global Management Inc. (APO) posted results. At one point, it was the top-performing stock in the S&P (still finishing in the top ten), which helps alleviate some concerns I’ve had about private credit and equity. I also liked the way big banks acted during the session.

BTD

Keep an eye on Roundhill Big Tech ETF (MAGS) as it approaches its 50-day moving average. I’m sure buyers will show up, and that will serve as a good test. We are also looking to buy, but we are not going to force it.

The problem with markets like this is that there is nowhere to hide, so hold extra cash and be ready!