Stocks Get Slammed As The Bears Bite Back

S&P 500 (SP500, SPY)

Stocks fell today as we expected, filling the gap around 2,630 and retesting support at the 2,620 to 2,630 region. The pull-back although sharp is not a surprise, given the steep rise we have seen in equity prices over the past week. I expect this type of volatility to only continue as headlines about trade, earnings, and growth roll out.

Could the sell-off continue tomorrow? Well, it seems entirely possible, especially given some of the charts below.Does it mean we are about to retest the lows of December? No.

Could we retrace to 2,580, it is possible.

Am I changing my bullish views that stocks are still likely to rise? No, I am not changing my viewpoints, not based on one day of trading. 

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S&P 500, sp500, spx

Russell 2000 (IWM)

The Russell 2000 did fail today at its downtrend, admittedly not a great sign. Is this a change in trend? At this point, I can’t say that it is a change in the overall direction. We do want to see the index rise above that downtrend soon, but for now be on the lookout for a drop to 1,433, which is the next level of support for the index.

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russell 2000

Housing (HGX)

The housing sector is also failing at a key resistance level again after it appeared the index might break free.

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HGX, housing

Semiconductor (SMH)

Another negative sign for stocks is that semiconductor SMH also failed at its downtrend.

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smh, semiconductor

IBM

IBM is trading higher following its fourth quarter result, why it is trading higher is beyond me?! Sure it “beat” its estimates but listen to these numbers:

Cognitive Solution was flat y/y with zero growth. Technology services and cloud platforms fell 3%.

These are supposed to be IBM’s growth engines.How can cloud fall 3%? How can Cognitive Solutions have no growth?

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ibm

Amazon (AMZN)

Amazon fell sharply today, back to support at $1620.A break below $1,620 likely sends the stock to roughly $1525.

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Disclosure: Michael Kramer and the clients of Mott Capital own Netflix, Tesla

Disclaimer: This article is my opinion and expresses my views. Those views can change at a moments notice when the ...

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