It was a rough session for stock as they jumped higher premarket on some economic data but slowly unwound through the day to finish at the lows of the session. The S&P 500 fell 0.70% and the NASDAQ 1.43%; it is worth noting today that the Russell 2000 of small cap stocks fell nearly 2% – a sign of “risk off”. We have seen other warning signs lately – the biotech stocks had an awful week, and we saw some momentum stocks take some big hits the last few days as well. That continued today. There were some negative comments from the West towards Russia mid day, plus there was a bad IPO which soured the mood.
Here are the longer term charts for the indexes; we are a familiar spot for the NASDAQ -it breaks the lower trendline for a few sessions and just as everyone gets bearish we get a V shaped rally to rip the face off bears. This has happened repeatedly the past 18 months. As we said the last few times the index was in a similar place, at *some* point it will no longer work as a pattern, but until it stops working you have to respect it.
Here is a shorter term chart of the Russell 2000 to show today’s damage.
In terms of the NYSE McClellan Oscillator it is not quite at the oversold level but getting there.
Facebook (FB) was one of the biggest decliners a day after the social networking company said it would acquire two-year-old Oculus VR Inc, a maker of virtual-reality glasses for gaming, for $2 billion.
Other momentum type stocks like Twitter (TWTR) were hit…
King Digital Entertainment Plc (KING), the maker of the wildly popular “Candy Crush Saga” game acted poorly on its first day of trading. King’s stock fell 15.6 percent to close at $19 in its trading debut after the initial public offering valued the company at about $6 billion.
After the bell, the U.S. Federal Reserve objected to plans by Citigroup (C) to return capital to shareholders, saying it had uncovered deficiencies during an annual test of their financial robustness. Citi fell nearly 6% in after hours to the mid $47s.