From the Trading Desk

Stocks Fall in Higher Turnover

A roller coaster day for stocks as small caps lead the market lower in higher turnover. A shaky start as stocks gapped lower, but could find their footing just after the first hour of trading. From there, buyers pushed the market higher for much of the morning and early afternoon. However, whether it was something traders ate at lunch or something more sinister sellers returned to send the market to session lows only to have a little kick save to end the day. Volume was higher across the board as the NASDAQ notches another day of distribution and is looking very shaky. Certainly, there are warning signs we may see some troubled waters ahead and it is best to play great defense here rather than trying to be a hero. Stay vigilant and proceed with great caution.

Sentiment within the AAII world continues to be neutral. Not much sense to spend much time until we see it sway one way or another. It could be a long time before we see the neutral camp move off their spot. It will take something big to get them to move. NAAIM active managers still are managing a high equity exposure with the exposure index a shade above 90%. It appears they are nowhere near NASDAQ tech stocks or hanging on for dear life. Either way their equity exposure remains in the upper bound.

TSLA was a leading stock until Wednesday happened and today further compounded its issue. The heavy selling is something to take notice and whether you want to label it a car company or something else is not worth spending time on. Fact of the matter is the stock is in trouble. If this market turns towards a correction TSLA would be a prime short-target. Mind you this is a big “IF.” How have shorts done so far over the past few years? Time will tell, but this leading stock certainly throwing caution to the wind. NVDA is another stock keeping an eye on. Let’s see how this plays out.

We hope you have a great weekend. Get out and enjoy it!

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