• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • TheStreet Smarts
  1. Home
  2. / Investing
  3. / Stocks

The Market Is Suffering From Multiple Personality Disorder

Closing the gap between the disparate groups is likely to be a very messy process.
By JAMES "REV SHARK" DEPORRE
May 04, 2021 | 07:03 AM EDT
Stocks quotes in this article: DOW, ARKK, SKLZ, BEAM

There are two totally different markets out there right now, and it is causing great consternation for many of its participants.

The first market is reflected in the action in the DJIA and S&P 500. This is primarily comprised of big-cap, value stocks that are favored by large funds and buy-and-hold investors. Many of these stocks have slow-and-steady growth and lower levels of volatility. A good example is Dow, Inc. (DOW) , the chemical company that is part of the DJIA.

The second market is comprised mainly of high-growth names and speculative small-caps. The best illustration of what's going on with high-growth stocks is the ARK Innovation ETF (ARKK) . Compare that chart to that of the DJIA, and the stark difference in action is quite clear. Good examples of the sorts of stocks that are held are Skillz (SKLZ) and Beam Therapeutics (BEAM) .

In addition to the growth names, another area of the market that is quite weak are the speculative small-caps that have been favored by individual and social media traders. Biotechnology is one of the key sectors that's been hit hard by the lack of interest. Other groups such as SPACs, electric vehicles, gambling, cannabis, and solar energy have been under consistent pressure.

Many of the small-caps that have been hit the hardest have good fundamentals and stories, but the relentless pressure has killed the charts, and, so far, they have not been able to bounce much. Cannabis stocks have come back in the past week, and there is some decent action in crypto-related names, but it is still very choppy.

The biggest problem is that closing the gap between the two groups is likely to be a very messy process. It seems most logical that big-caps will start to correct deeper, but if that occurs, it is hard to foresee that the speculative small-caps will find much upside traction. At best, the small-caps and growth names are likely to tread water while the senior indices pull back.

It is a very odd market and presents some of the most difficult trading we've had in years. The best course of action is to protect capital and wait for conditions to evolve.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Rev Shark had no positions in any securities mentioned.

TAGS: Futures | Investing | Markets | Small Cap | Stocks | Trading

More from Stocks

There Are Interesting Things Happening Beneath the Surface of This Market

James "Rev Shark" DePorre
Aug 8, 2022 4:32 PM EDT

Look for more positioning on Tuesday ahead of two important economic reports.

Can Rhythm Pharmaceuticals Keep Up This Tempo?

Bruce Kamich
Aug 8, 2022 3:01 PM EDT

The stock has surged amid an analyst upgrade.

What AIG's Charts Say About the Stock Ahead of Earnings

Bruce Kamich
Aug 8, 2022 2:03 PM EDT

The stock just tested the underside of the declining 50-day moving average.

Solar Firm Sunrun Continues to Run on the Upside

Bruce Kamich
Aug 8, 2022 1:24 PM EDT

Here's what the longer-term picture looks like.

Weariness Sets in During This Bear Market Phase

Bob Lang
Aug 8, 2022 1:00 PM EDT

Sentiment is starting to turn bullish, but painted with a skeptical eye as the wall of worry is up high.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 09:24 AM EDT PETER TCHIR

    Jobs Report Reaction: Incredibly Strong, But Questions to Ask

    An incredibly strong July jobs report. Not only d...
  • 08:54 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    The Secret to Dealing With FOMO
  • 03:51 PM EDT REAL MONEY

    AMD Second-Quarter Earnings Live Blog

    Real Money's Eric Jhonsa covers 's second-quarte...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login