False Alarm, Stocks Midday Plunge Prove To Be Just A Mild Overreaction

Markets in turmoil, the next correction is coming, the end of days are upon us. The markets plunged by a whole 1% briefly around lunchtime, and the media was in full hysteria mode. My goodness. What a joke. It’s the “coronavirus reality setting in,” “no, its the stretch valuations that are finally cracking,” “oh-wait, pick-me, I know, I know, its the end of the momentum train.” Holy Shit! You know what I did it – yeah, I turned it off. 

The charts don’t lie, and when you look at the intraday charts of nearly every signal sector ETF, they seem to tell the same story. A story of a giant sell program that hit the market, with a massive basket of stocks to sell. Today’s sell-off was so severe that the S&P 500 managed to finish the day down a whole 38 basis points. Do stocks go down, yes. Is every brief 1% dip the start of the next correction, or the air hissing out of the bubble, no. 

Members were given an epic rant by me this afternoon, of what a joke some of this has become.

You can see that the S&P 500 and Nasdaq 100, and a whole bunch of sectors went down in nearly perfect unison. It wasn’t a slow, steady push lower, with one industry leading the way, they all went down simultaneous as if a giant basket of stocks hit the market. 

Not to mention there was no solid piece of news to even tie the move lower to.

basket

It didn’t have the marking of reversal of trend or anything because, by the end of the day, most stocks rebounded, closing mildly lower. 

S&P 500 (SPY)

We can see the S&P 500 held the uptrend nicely; nothing has changed in my opinion, nothing. Today I laid my new target for the S&P 500 for members: The Road To S&P 500 3,700, Yes I’ve Increased My Target

S&p 500, spx

AMD (AMD)

AMD fell today, and I think it still has further to drop. Although, I did identify a mild level of support at $54.61.

amd

Acadia (ACAD)

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Disclosure: Michael Kramer still owns SPY Calls

Michael Kramer and the clients of Mott Capital own ACAD

Disclaimer: This article is my opinion and expresses my views. Those views can change ...

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