Stocks Were Looking For An Excuse to Sell

 | Aug 10, 2018 | 4:30 PM EDT
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Stock quotes in this article:

IWM

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FB

,

amzn

,

aapl

,

nflx

,

googl

The good news is that the indices didn't close near the lows of the day again. The bad news is that there were losses across the board on 2 to 1 negative breadth. New 12-month lows exceed new 12-month highs by a score of 245 to 174.

Although it was a solid day of selling, many of the small-caps on my screen held up fairly well. Oil and energy was a leading group while banking and financials lagged. The FAANG names -- Facebook (FB) , Amazon (AMZN) , Apple (AAPL) , Netflix (NFLX) and Alphabet (GOOGL) -- were all red, but the Russell 2000 ETF (IWM) was only down about 0.28% and was in positive territory for part of the day.

The crisis in Turkey receives the blame for the action today, but this market has been hinting for a while that it wants some corrective action, and this turned out to be a good excuse. It hasn't been able to sell off on trade war issues or higher interest rates because everyone knows any dip on those headlines is an automatic buy. We needed something new and not too obvious to trigger some selling and Turkey fit the bill.

The biggest negative the market has going for it in the short term is that we have a couple more weeks of August left. Trading can get quite tedious and slow at this time of the year and that usually leads to some random movement.

I actually feel better about the prospects for more interesting trading next week after the slippage today, but some downside follow through on this Turkey issue would be a nice way to shake things up a bit more.

There are some interesting charts developing and I don't see any reason to be overly negative about this market. The selling today was well contained and didn't do any major technical damage. The market can easily handle a move down to around 2800 of the S&P500 without damaging the uptrend but if that happens it is going to cause some consternation among the bulls.

Select stocks continue to look good and that should be the focus.

Have a great weekend. I'll see you on Monday.

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