The market continues to go down like free beer and the only thing that looks decent is energy, but that group is starting to look overextended. So what do you buy? Well nothing, unless you want to know what it feels like to be a butcher block.
The Russell and the Nazzy head faked everyone earlier in the week as both held their 100 day moving averages and bounced hard. Turns out it was a dead at bounce as the $QQQ broke its 100 day on Friday and $IWM went back and closed right on it. Ugly reversal action.
Part of this sell off involves rotational dynamics, (yeah, rotating out of everything) but I also think the market is repricing things here in front of what they feel will be a weak earnings quarter. They discount stocks now and they then move them higher as earnings get reported. This has happened before.
Whatever the reason, this tape still feels like a dirty needle in your retina.
93 companies in the S&P 500 have issued negative guidance on earnings per share while 18 have offered positive guidance, according to FactSet. That’s the second-highest number of profit warnings since FactSet started tracking guidance data in 2006.
Let them reprice this stuff, take a deep breath, and don’t be in a rush.