The Wall Street Journal reports Quickening Retreat From Tech Sinks Market.
> U.S. stocks suffered their biggest decline in more than seven months Wednesday, as investors accelerated their retreat from fast-growing technology stocks in favor of shares that have been overlooked.
> Major indexes have started the fourth quarter on their weakest footing since the beginning of 2016, and the swift fall has some investors wondering if this is a brief stumble or an overdue reckoning for U.S. stocks after months of outperforming global markets.
> The rotation out of tech and other growth stocks—among the most popular trades of the year—to so-called safety stocks, such as utilities companies, was sparked in part by the recent jump in government bond yields and the Federal Reserve’s bid to tighten monetary policy.
> But there have been other warnings signals that made investors nervous. Recent data has showed a slowdown in both housing and auto sales, both of which are closely watched indicators of U.S. economic health. Even more concerning: trade tensions between the U.S. and China appear to be worsening.
> The result: A simultaneous selling of 2018’s biggest stock-market winners.
Moving Averages
Leaders Up, Leaders Down
Feed Me
Big Names
Unsustainable US Share
It Never Fails
There’s that cash on the sidelines stupidity once again.
Mike “Mish” Shedlock
They think they can hold markets up but it never happens. Look at the numerous stock declines on record.
This was so easy to see coming. I went short the S&P two days ago and already am up 90% (puts). I laugh when I see people say Elliotwave does not work but they just do not take the time to study it. I have for several decades and if you know how to use it, these tops and third waves down are perfect times to go short (or long in an opposite market). I’ll probably close the position and look for closer strikes.
All cash outside of federal reserve notes is fully invested at all times. And the federal reserve notes are never invested. There is no such thing as cash on the sidelines.
Valueless FANGs should revert to zero or near to it.
Margin calls will force more selling of anything that can be sold, not just the stock that was purchased using borrowed funds.
Amazon P/E is still at 140. Twitter P/E at 85.
Still a long way to go…
Wonder where it will all settle down to if there were no interventions.
Where it should settle down.
Or at least closer to it. Even better if all interventions since the Founding were unwound, and we went back to $22/oz Gold with Gold the only acceptable tender.
But simply freezing all and any intervention as of this minute, would still be a huge boon compared to the theft bonanza we are in for this time, in order to save face for the usual gaggle of expendables and the well indoctrinated sycophant army who are told to cheer for them and their “system.”
Ha! Would that ‘cash on the sidelines’ be coming from those households refusing to run into the smoky building BEFORE the flames broke out or just those sitting inside on the $650 Billion of margin debt?
central banks will never allow stocks to fall (ever),if they have to print a trillion dollars a day and buy every single share of every publicly traded company to keep this scheme from collapsing they’ll do it (until they can’t)!
And so it begins.
No rotation into gold or bonds… yet….
Gold was actually up today. Just about the only thing that was.