The indices did little today and failed to tell the story of what was really going on in the market. Many stocks that had strong speculative gains last week during holiday trading, reversed hard and give back most of their recent gains.
A good example was Square (SQ) which closed down $7.86 and gave back six days of gains. The cryptocurrency and blockchain stocks, which had racked up some huge gains last week, were hit particularly hard with names like Riot Blockchain (RIOT) , Social Reality (SRAX) and Xunlei (XNET) down substantially from pre-market highs.
Quite a few biotechnology stocks were also hit, and China-related names were sold as well. The FAANG names held up with Amazon (AMZN) and Alphabet (GOOGL) helping the indices. Breadth was poor with about 2500 gainers to over 4200 decliners.
Historically the Monday after Thanksgiving is weak. The historic tendencies worked last week and they worked again today.
The good news is that there wasn't any shift in the indices. This was primarily just profit taking in some stocks that made big moves and there is no change in the technical picture. Some bulls will argue that this was healthy action after a few things had become overheated last week.
Dip buyers are usually excited about this sort of action, but they stood aside today. We will see how interested they are as new support levels develop. Seasonality continues to favor the bulls into the end of the year but it may take a little time for new setups to develop.
Have a good evening. I'll see you tomorrow.
