Thursday Wrap: Underlying Weakness

In early trade, the S&P 500 $SPY and Dow Jones Industrial Average $DJIA printed new all-time highs. However, both spent the rest of the day testing lower and ultimately and hilariously finishing flat for the day.

Though the Nasdaq 100 $QQQ and Russell 2000 $IWM finished with losses, the headline numbers won’t really scare anyone, considering we’re only a sneeze away from regaining all-time highs.

Amazing how the $SPY hangs in despite the carnage in mo-mo land

— Tsachy Mishal (@CapitalObserver) Apr. 3 at 09:04 AM


However, cashtaggers on StockTwits were quite busy today keeping tabs on the carnage taking place under the hood. Many of this year’s fashionable stocks continue to get decimated.

Take a look at these losses today, most of which piled on to losses that have been accumulating in these names for weeks now:

FireEye $FEYE: -10%
Twitter $TWTR: -4%
Tableau Software $DATA: -8%
Splunk $SPLK: -7%
LinkedIn $LNKD: -4%
Workday $WDAY: -9%
(all percentages rounded)

These are one day losses, and many of them (mercilessly) finished off their lowest levels of the day! Cashtaggers are growing concerned these bone-crushing slides are a red flag for the broader market and may soon begin to drag the rest of the indexes lower:

Carnage in the momos. Overall market will likely follow soon. $FEYE $WDAY $SPLK

— Mike (@CrimeD34) Apr. 3 at 11:38 AM

The kinds of losses these names have experienced — many with reasonable fundamentals — will be scary if the indexes begin to follow suit:

stocks that are down 20% plus in a month with good sales&eps can’t bounce for more than 1day $WDAY $DATA $FEYE $SPLK $SSTK

— Frank Zorrilla (@ZorTrades) Apr. 3 at 10:42 AM

$YELP has lost 30% in less than a month. And it looks terrible still: PT $60 then 50.

— LaDucTrading (@SamanthaLaDuc) Apr. 3 at 01:25 PM


A confusing data point is that sentiment on the major indexes has been improving in recent days/weeks… most dramatically so in small cap land, as visualized by the Russell 2000 $IWM sentiment chart:

Screen Shot 2014-04-03 at 1.52.05 PM


The good news: all is not bad. I’ll leave you with this silver lining:

I’m seeing more signs of leadership rotation as former leaders fade out. $SPY $QQQ

— (@DarvasTrader) Apr. 3 at 01:40 PM


The Bulls are going to need new leaders to emerge if they want this bull market to resume higher. There has been too much damage done to the former leaders.

~ Sean McLaughlin (@chicagosean)

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