All eyes were on today's Federal Reserve meeting minutes release, and volatility increased dramatically after 2 PM when they were made public. Stocks had been in a whip saw day to begin with but immediately after the release a substantial selloff, was followed by a big rally, which was followed by a heavy bout of selling into the close. Minutes from the meeting showed almost all the policymakers on the central bank's Federal Open Market Committee agreed that a change to the stimulus was not yet appropriate, and only a few thought it would soon be time to "slow somewhat" the pace of the stimulus policy. The S&P 500 fell 0.58% and NASDAQ 0.38%. The one key economic report on the day was existing home sales:
- Existing home sales jumped 6.5 percent in July to an annualized rate of 5.39 million, according to the National Association of Realtors. Economists in a Reuters survey expected a total of 5.15 million annualized units versus 5.08 million annualized units in June.
The S&P 500 is now on its 4th close below the 50 day moving average and third day where it acted as a ceiling. There is a gap to fill near the 100 day moving average marked in green - it did not seem likely it would get there in a straight line but that might be what is happening soon.
The NASDAQ remains much better looking and is nowhere near the 50 day moving average. But there is a possibility it plays catch up if this selloff continues.
We have not looked at the small cap Russell 2000 in a while; it is actually halfway in between where the S&P 500 and NASDAQ are, with the last 3 days being a battleground near the 50 day moving average.
Emerging markets, which looked like they might be finally breaking a long term downtrend last week, have rolled over yet again.
While in a correction almost all stocks move together (down and up during the vicious rallies) you can continue to look for relative strength. Below are some names which are performing well - first we have 2 biotech companies NPS Pharmaceuticals and Jazz Pharmaceuticals
Biotechs can be a scary place, so if you want something boring - how about shoes? Sketchers USA is acting fantastic.
Last we have movie studio DreamWorks Animation which likewise is acting as if there is no correction at all.