Despite some sloppy selling to start the day, the indices were holding up fairly well. The impeachment issue is being ignored and there wasn't anything on China trade until shortly before noon. A Bloomberg story hit that the Trump Administration was considering ways to limit financial flows into Chinese stocks. There is actually a report that they are considering the delisting of Chinese stocks from U.S. stock exchanges.
The repercussions of this action would be so severe it is hard to believe that the report is true. This would cause chaos in thousands of funds and ETFs. So far there is no denials on the wires but I expect to see this walked back quite quickly.
These days when a headline of that sort hits, the computer algorithms sell within seconds. There is no effort to, or need, to verify accuracy before the selling is triggered.
The indices are already bouncing back strong as I write which, I assume, is because no one can believe that this is a serious plan.
Overall, there has been some bounce action in the worst performing stocks today. Traders have been looking for some bottom fishing opportunities and are nibbling at a few things but once again my list of software and cloud socks is totally red.
This sudden move on a China headline is a reminder of how much the market is tied to the next bit of news. There is little benefit to searching for 'good' stocks when they are jerked around at random by news headlines.
My game plan is to continue to develop shopping lists but to only make very small incremental buys until the price action improves. This is just too chaotic to put capital to work.
This is the third Friday in a row that the market has been hit by a negative China headline. It makes it feel like it is planned action but it hard to understand the logic.
Be careful out there.