Small Caps and the NASDAQ 100 led the market lower today after solid gains yesterday. The news regarding the Celebrity Nude scandal finally go to AAPL as traders were using the excuse as the stock sold off in heavy volume. Volume on the NYSE ran lower on the session, but the NASDAQ exchange saw a jump in volume. AAPL’s volume most likely had majority of the influence as it traded double the volume it traded during Tuesday’s session. Out of the gate the market sold off and continued to do so for much of the session. The bleeding stopped around noon, but the release of the Federal Reserve’s beige book failed to keep the sellers at bay. While the stock market did close off its low of the session the close lacked any buying interest. Despite the red we see on our screen today we remain in an uptrend.
The NASDAQ did notch a day of distribution. Selling in some big boys like AAPL, GOOGL, and PCLN certainly throw caution to the wind. Yesterday we saw FB and TSLA move higher, but they too stumbled today. At Big Wave Trading we are not about to call market tops, but some of the action here if continued would certainly be cause for concern. Again, we are not calling a top. However, if you are heavy long it would not be a bad decision to hedge using the weak indexes like Russell 2000. Remember, one day does not make a trend and we will need to see a bit more evidence pile up before our market model switches. In the meantime, obey your trading plan.
Crude oil made one heck of comeback today. We can blame the turnaround on the dollar moving lower, but today’s move in Crude was pretty impressive. While higher crude oil prices pushed the Energy sector higher it was not the best performing sector in the S&P 500. The honor would go to the healthcare sector. Healthcare technology was a big winner with CERN being playing a big part in keeping the sector higher today. There are studies 20% of all money spent will be on healthcare by 2023. The statement sounds crazy and while this is a guestimate sure speaks to the opportunity that may be hidden in the sector.
There is one index on a tear we have yet to hear much about. So much for all the troubles in China as the Shanghai continues to blast higher. All you need to see is the chart for the explanation. Just get on board and ride the wave:
Whether or not this is a start to something greater or simply consolidation will be something worked out over time. Sure, we have the jobs report Friday and geopolitical risks. The reality is no one knows how the market will move regardless of direction. At the moment, it appears we are consolidating gains and if it is something more there will be clues. Until then, continue to obey your signals and push forward.
