Earlier this month, I wrote an article, titled "Are You Ready For A Pullback", warning you that stocks are about to take a fall. This market held up for a little more than a week. Today, things finally broke down!
The Dow was down 358.04 points (-2.06%); SPX lost 43.88 points (-2.11%); Nasdaq tumbled 141.56 points (-2.82%).
In the first article, I said,
"I do not think, however, this is all about the Fed's intention to raise rates starting in September. I think this is more that things are just getting too overbought, technically, to be keep heading higher. We will need to see a pullback before drawing more buyers back into the market."
Most people, now, do not think that the Fed will start raising rates in September (even though they still might). Bonds rose, which meant interest rates went down. But, markets still fell.
I also wrote,
"Some people are saying that a lot of traders are still on vacation, and, when they return, stocks will rally again. I think otherwise. I think "if" the market does not pullback soon, when the traders are back from their vacation, they will drive the markets down. There is no point in buying an overbought market that is teetering on a cliff, so to speak."
Well, it is getting to the end of August. Traders who went on vacation are coming back now.
Today's pronounced selling was something that we have not seen for a long time. We actually saw some panic towards the end. In the last 15 minutes of trading, the Dow fell about 80 points; SPX dropped about 10 points; and, Nasdaq lost about 15 points. What is more, is that SPY continued to fall in after-market!
Here are the profits that we locked in today:
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The internet sector has been holding up really well. AMZN, GOOG, and NFLX have been really strong. But, today, they all gave in. NFLX was down almost 8%! GOOG fared better than others, down just 2.13%. FB tumbled 4.98%. TWTR lost 5,83%. AMZN dropped 3.22%. YELP fell 4.91%.
So, is the market done selling? We did see some panic. Have you missed the downside? By all means, NO! Asian markets are down again, at the time of this writing. Japan's Nikkei is finally falling as well. I think SPX will soon test 2010 to 2000.
Good night and HappyTrading! ™