Leading tech and growth names were blasted with heavy selling yesterday as the NASDAQ Composite Index sold off hard from yesterday's new highs on heavy volume. Meanwhile, the Dow Jones Industrials and small-cap Russell 2000 Indexes were up 0.44% and 0.38% on the day in a stark divergence as strength in financials buoyed these indexes. The S&P 500 Index, which has a heavy weighting in both financials and techs, saw the strength in financials essentially cancel out the weakness in techs, leading to a big churning day around the flat line on heavy volume. Further adding to the bizarre nature of yesterday's action, the Dow Transportation Index was up 3.38%, or 322 points as laggard airlines, truckers, and railroads were up sharply.
On its face, the action is bearish, and while some pundits tried to characterize yesterday's action as "the great rotation," we aren't seeing that as being the case. In most cases, investors should have been forced into more or all cash based on their selling guides, and this certainly holds true for several Focus List names. The sudden change in character, especially in cases where a stock was acting constructively or even bullishly, is disconcerting. Anyone holding long positions in this market should review their exit points and be ready to take defensive action as necessary if the general market continues to deteriorate. Futures are up this morning as money continues to pour into Dow stocks while bleeding tech and internet names attempt to recover.
Focus List Notes:
Focus List stocks were slammed across the board, but some managed to hold support at their 20-dema or 50-dma. ANET, CAT and WB all held support at their 20-demas, but selling volume was heavy. TTWO found support at its 50-dma, but suffered equally heavy selling volume. BABA, FB, and NVDA all closed just below their 50-dmas on heavy selling, but NVDA took the biggest hit as it plunged nearly 20 points on an intraday basis before bouncing to close down 14.29 points, or -6.78%. NFLX, which was looking bullish yesterday after posting a pocket pivot, blew through its 50-dma on heavy volume, triggering a sell at the 50-dma.
Those stocks that broke below their 20-demas triggered our own sell signals for the stocks, but as a whole the lsit took a lot of heat yesterday, and unless we see a quick rebound the list could quickly dwindle to just a few names.
Market Lab Report - Premarket Pulse for Thursday, November 30, 2017
| Published: | 30 Nov 2017 09:04 ET |
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