Just when you thought the market could not get any weirder we give you today’s market. Everything was going well until 10am EST then the FAANG stocks began to sell-off. It was not run of the mill selling. Sellers pounded on the FAANGs and did not hold back. On the flip side, the Dow continued to perform well. Small cap stocks continued their 4-day tear and lead this overall bounce. It is funny to see a distribution day for the NASDAQ while the Dow powers to a new all-time high.
What a market we have as it appears rotation out of big cap tech back to banks and blue chip stocks. Banks continue to be perform well. Money is pouring into banks. It is likely ahead of the next rate hike, but all we need to know is the group is moving higher. There is no need to debate on why a trend is occurring. We just care about what is trending and go along with it.
Sentiment flipped to favor the bulls this week with AAII Bulls ending this week at 38%. Bears slip below 30% at 29%. Hard to believe bulls could flip in just one week after what we have seen from this market. The S&P 500 was down 9 days in a row! What a move over the last few days for this market. Small cap stocks are leading and banks are a leading group.
We need to continue to work our process and execute. There are a ton of stocks in our scans and we should be seeing more and more new longs. If this trend continues we do not want to be left behind. Otherwise, we cut our losses and move along.
Have a great weekend.
