One of the worst things about bad market action like we are experiencing right now is that all stocks tend to move in tandem to the downside. The is partial due to the dominance of ETFs and partially due to program trading. The focus is on the indices and the big picture and the fact that there may be some individual stocks being wrongful sold doesn't much matters.
When the market starts to recover from this corrective action we will see more focus on stock picking. Earlier today there was some good relative strength in small caps and some signs that an interest in stock picking was developing but the FANG stocks and other bit cap technology names were under extreme pressure as it that took hold it undermined interest in buying anything. Market players don't want to fight the tide when stocks like Apple (AAPL) and Amazon (AMZN) go into free-fall.
The good news was that emotions flared as the selling intensified which is what we need to move to a low. There was a very big jump in the last half hour of trading which was a function of big buyers reacting to the oversold conditions that developed as the intense selling caused some key technical levels to fall.
The most important thing you can do right now is to embrace the fact that we are in a very poor market with a high level of volatility. There is no way to know when it will end and if there is another bout of selling like today, your astute stock picking isn't going to protect you much.
Eventually this action will lead to a good trading market when stock picking is rewarding but we have to be patient and wait for that to develop. If you are anxious to trade right now then you have to focus on index trades. Don't even think about loading up with big positions in individual stocks right now. It is going to take some time for the market to regain its technical health and for fundamentals to matter again.
Have a good evening. I'll see you tomorrow,
