Major indexes sold off hard yesterday in what was a clear bout of distribution despite the fact that volume came in lower vs. last Friday. Of course, last Friday's volume was severely bloated thanks to Russell Index rebalancing which artificially inflated volume in the extreme. Nevertheless, volume was above average on both the NASDAQ Composite and S&P 500, and higher than prior Thursday's volume, thus would count as a distribution day.
The Market Direction Model went to cash at the opening bell. Most leading stocks have been down for several days, and Focus List names have been no exception. Yesterday's sharp sell-off was triggered by a Wall Street Journal article claiming that the Trump Administration intended to place limits on Chinese investments in U.S. technology firms.
Futures are lower at the time of this writing as markets lick their wounds and consider the gravity of the trade war getting worse before it gets settled.
Focus List Notes:
Focus List names came into deep support levels yesterday, and in some cases broke near-term support.
AMZN broke below its 20-dema and is set for a test of its 50-dma.
BZUN broke sharply to the downside and is now testing its 50-dma.
FTNT broke below its 20-dema and should be watched for a possible test of its 50-dma.
NFLX broke below the $400 Century Mark price level, which in fact triggered it as a short at the 400 price point early yesterday morning. It then proceeded to drop another 15.52 points lower before finding support at its 20-dema.
NVDA broke below its 50-dma on heavy selling volume. It has also undercut the mid-May lows, so we would look for a rally back up into the 50-dma, which could bring the stock into play as a short-sale at that point.
SQ dropped below its 20-dema on heavy selling volume..
Market Lab Report - Pre-Market Pulse for Tuesday, June 26, 2018
| Published: | 26 Jun 2018 07:12 ET |
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