Another Tech Wreck
Between the ECB, UK and Comey, there was lots of news to digest. However, stocks really didn’t seem to care. The ECB did nothing and hinted that the European economy was improving. Comey testified and you couldn’t turn left or right without hearing “expert” commentary from the pundits. As expected, it was much ado about nothing.
The big shocker came from the UK where PM Theresa May underestimated her constituency when she called for a general election. Hoping to strengthen her position in BREXIT negotiations, the UK people removed her party’s majority, forcing a coalition government. Not many people saw that coming!
Stocks really didn’t care as Friday began and I don’t think they will by the time Friday ends. The story will end up being the one day tech wreck. Pull up any chart you want of any momentum stock or ETF and they will all look the same. In one, big, red fell swoop, a few hours erased several weeks of gains as we have seen many, many times before during a creeper market.
Apple NVIDIA Netflix Google Facebook QQQ MTUM SOXX IGV and on and on and on.
Although it’s only one day, the selling and volume are vicious so far and the rotation out of the highfliers and into the value stocks is extreme today. Just look at the banks, healthcare, energy and the small caps. You would normally expect to see staples and utilities rally, but not today. This looks purely like a rotation into the laggards. With junk bonds quiet and the NYSE A/D Line positive, I am not going to view this with the bears. Let’s see if the rotation in leadership is a short-term thing or not as well as if it’s a warning sign for the overall market, which I think not.
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