Although the indexes have been in a strong uptrend since mid-March, there has been a substantial amount of rotation during the move. This morning we have a good example as the technology stocks and growth names that were very hot yesterday are reversing, while financials, healthcare, and energy are driving the DJIA and S&P 500 higher. The Nasdaq 100 (QQQ) has given back half of its 2% gain from yesterday, and the Russell 2000 ETF (IWM) is lagging.
Breadth is running 35 to 43 negative, but there are 180 new highs with names like Merck (MRK) and Amgen (AMGN) leading.
The S&P 500 is now rolling over following some hawkish comments from Fed member Brainard about the Fed taking 'stronger' action. This is not too surprising but it is a convenient justification for some selling that has been pending.
The selling in growth names is gaining some momentum now. All the FATMAAN names are red, and all 35 stocks held by ARK Innovation ETF (ARKK) are negative. This sort of selling has nothing to do with fundamentals or valuations, and eventually it leads to good opportunities. But it is always surprising how quickly stocks can reverse for no real reason.
I've taken a few stops and am not doing any new buying right now.
