{+++} The market opened higher today, hit a new all time high at SPX 1802 and DOW 16k+, then pulled back for the rest of the day. Today’s decline from 1802 to 1788 is the largest pullback in over a week. 1779 is first support right now.
Carl Icahn came out with bearish market comments today. He basically said stocks are way overvalued and have been held up with smoke and mirrors due to smart cost cutting by corporations and not real organic growth. I really don’t disagree with a word he said, but there are forces in play that transcend this truth. In two words, it’s global easing.
On that same note, names that are obviously overvalued had a reality check. Names like TSLA, YELP, LNKD, NFLX and SCTY got taken to the woodshed. There were many others, and it seemed they took profits in some of the main momentum stocks for the second time in as many weeks. There was a very bearish article in Barrons over the weekend on some of these names and that didn’t help.
There was some solid profit taking in the oil and gas sector ( CRZ, XEC, CXO and WLL) and other areas, so it wasn’t just sector specific. Hey, at all time highs, people take profits.
Biotech started off OK, then got hit. Our own P&L name BIIB came off almost $4, but names like AEGR did much worse.
There isn’t much that I have any interest in shorting, but one sector I am watching to possibly short in the future is the solar group. That group has always traded with silliness and rarely can you justify their valuations. They are classic momo stocks and will be the first to get stabbed in the face when there is a big sector rotation.
Hope you had a good day. See you in the morning.