Tech Sector Reels in Pain
It was a tale of two markets on Monday, as tech stocks finally gave the bears a little consolation, the rest of the market, though, continuing to hold its own. Small-cap stocks (IWM) outperformed, ending in positive territory, while the NASDAQ index (QQQ) fell 1.1%, recording its worst trading day since September 5th.
Apple (AAPL) continued falling for the fourth day in a row, closing off 0.88%. Apple fell 5% last week, its worst trading week of the year; just a week-and-a-half ago, it launched its iPhone 8 and a number of other new products. The stock is still trading up over 30% year-to-date.
The stock of Facebook (FB) fell 4.5%, recording its worst trading day of the year after company CEO, Mark Zuckerberg backtracked after pushing earlier to issue a new class of stock to retain voting control. Other lead tech stocks that lost ground included Amazon (AMZN), which fell 1.6%, and Netflix (NFLX) which ended sharply off by 4.7%.
The million dollar question as of now is whether this was simply a warnings sign or a healthy rotation, with the market digesting the latest gains and creating a staging ground for the next upsurge. It goes without saying that the bears want to believe that the weakness seen yesterday in FAANG stocks signals a change in the market’s character, though the problem is that it doesn’t seem that the bears have been able of late to create ongoing momentum after days the likes of which we saw yesterday. Bottom buyers have been able to quickly sniff out opportunities and impatient bargain hunters simply can’t hold back for too long!
The big problem is that the weakness has been well confined to the tech sector and has not spilled over to other stock groupings. Small-caps barely flinched – and even succeeded in closing at a new all-time high! It’s hard to be too concerned about the market peaking when so much of the market has retained its strength.
Despite the fact that in the larger scheme of things, the market has stayed rather strong, the tech sector has been reeling. The bears are celebrating their first round victory, though they’ll have to extend the selling pressure to other sectors if they want to be taken seriously. The bulls are still in control and bottom buyers aren’t going to go down without a fight.
Tuesday’s Hot Stocks: RHT, LEG, DRI
Have a great trading day!
|Tuesday||9:00||S&P Case-Shiller||0.4 %||Medium|
|Tuesday||10:00||New Home Sales||583 K|
|Tuesday||11:50||Janet Yellen Speaks||“Prospects for Growth: Reassessing the Fundamentals”||Medium|
|Wednesday||8:30||Durable Goods Orders||1.5 %||Low|
|Wednesday||10:00||Pending Home Sales Index||-0.1 %||Medium|
|Thursday||8:30||Jobless Claims||270 K||Medium|
|Friday||8:30||Personal Income and Outlays||0.3 %||Medium|
|THO||Thor Industries, Inc.||PM||Monday|
|DRI||Darden Restaurants, Inc.||AM||Tuesday|
|MU||Micron Technology, Inc.||PM||Tuesday|
|WOR||Worthington Industries, Inc.||AM||Wednesday|
|CAG||Conagra Brands, Inc.||AM||Thursday|
|MKC||McCormick & Company, Incorporated||AM||Thursday|
|CMC||Commercial Metals Company||AM||Thursday|
Today’s Picks – Day Trading!
New York Strategy Swing
Today’s Picks – Swing “New-York Strategy”
No.1 – EFX
|Sector||Financial | Credit Services|
Risk Rates: Normal – Regular size, High –Consider reducing size, Low – Consider increasing size