Monday Wrap: A Relative Lack of Panic

Morning trade saw a one-way — yet controlled — market to the downside which was led by the NASDAQ that took significant bites off recent big-cap high fliers.

Bulls [in $QQQ] are looking for closes back over $89 and $91 to spring another vicious bear trap. The sheer distribution in the tape this time and relative lack of panic has me thinking otherwise, though.

~ @chessNwine (This Party Might Just Be Getting Started)

Social media stocks $FB & $TWTR saw large percentage losses (at one point both greater than 5%), big capped and high priced internet stocks such as $PCLN, $GOOG, and $NFLX saw jaw-dropping losses measured in actual dollars. Technology leaders $TSLA and $FEYE seem to have broken some short-term technical support levels. And there seemed to be little place to hide in the biotechnology sector, as the $IBB index plunged more that 5% at one point, causing many investors in the space to reevaluate their medium to long-term bullish stance.

Wow momo stocks dump resuming were we left off on Friday evening… $SCTY $TSLA $PCLN $NFLX $SPLK $ZU

— Jean Fonteneau (@JFinDallas) Mar. 24 at 07:43 AM

 

Early leaders this year, like Twitter, have basically given up the ghost…

$TWTR still in slow motion breakdown from support. Has (re)returned all gains from important Dec 10th breakout.

— Duru A (@DrDuru) Mar. 24 at 07:59 AM

 

Same with Netflix and Priceline:

The old stairs up, elevator down saying is in full effect. $PCLN, $NFLX

— Optionshero (@OptionsHero) Mar. 24 at 09:15 AM

 

Many beaten down stocks this morning spent the afternoon trying to regain some losses, however when reviewing charts this evening, many momentum players will have their hands full determining whether or not to stick with the bullish plan, or evaluate new options to exit, reverse, or hedge up positions.

So what’s to blame? Bill Gunderson suggests that the new Fed may be a catalyst for more conservative earnings multiples:

$NFLX (no position) is a good example of the multiple contraction taking place in the market since Yellen's "six month" comments.

— Bill Gunderson (@billgunderson) Mar. 24 at 12:38 PM

 

Ryan Detrick doesn’t like the underlying market structure as measured by price and volume:

Another 83 buying climaxes last week. 582 past 5-weeks. Definite distribution recently. http://stks.co/h0QLa

— Ryan Detrick (@RyanDetrick) Mar. 24 at 08:46 AM

 

The specter of rising interest rates has been thrown around as a possible lid on further market gains, but paint J.C. Paretz a skeptic:

What rising rate environment? All is see are lower highs and lower lows $TNX Am I missing something? http://stks.co/q087c

— J.C. Parets (@allstarcharts) Mar. 24 at 12:10 PM

 

Or maybe while we’ve all been distracted by biotech breakouts, alternative energy stocks, Federal Reserve decoding, and leadership amongst the big banks… we should’ve been listening to a minority of smart market participants who have been quietly paying attention to smaller real-world stocks in the Russell index? They’ve been sensing something has been remiss for quite some time now.

$IWm bullish sentiment 10%, somebody check that calculation, can't be right…. ;-) http://stks.co/t08A1

— Greg Harmon (@harmongreg) Mar. 24 at 08:40 AM

 

~ Sean McLaughlin (@chicagosean)


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