Today was the first good down day in literally almost three months. It’s been an absolute hell-grind since June 11th. Now that the market has dipped a tiny bit, I’m sure Powell will come up with some other cute save-the-day program. In the meantime, though, volatility has a pulse:
The Dow Jones Composite did a couple of interesting things recently: first, it almost perfectly sealed the price gap that took place between February 21 and 24 (a glorious weekend!), and second, for the first time, it decisively broken its uptrend that has been agonizingly intact since March 23rd.
Likewise, the NASDAQ Composite decisively broke its own uptrend. There are actually two here, the most recent one less sharply-ascending than the first. It’s below both of them.
At one point, the Dow was almost quadruple digits (my God, how I miss those days!) We were still down hard today, and, once again, the March 23rd uptrend is busted.
Some high-flying stocks, such as Tesla, have lost almost a quarter of their value in literally a matter of hours. In spite of the carnage, the NASDAQ 100 is still above its uptrend, which is unbroken. Friday morning’s monthly jobs report will either “save the day” (for the billionth time) or show add this trendline to the “broken’ list.
For about the first hour today, I was actually in the red! The reason is simple: my shorts were heavily focused in finance/banking, and for some reason, the KBE was roaring almost 4% higher. It was really upsetting to see so much red on the screen and still be down.
My portfolio shook that off, however, and ended the day profitable. My options portfolio had a strong profit, but my equity portfolio had a pretty dismal profit, relative to the carnage. Again, my picks were surprisingly strong today, so that really watered things down badly.
The most important index for me remains the small caps, which has done a dynamite job doing an about-face from that series of trendlines I’ve been tracking for months.
The longer-term view of the Russell 2000 shows that the risk of a breakout from the saucer that had formed has been dispatched, and we’ve got a nice, clean failure of the uptrend. More, please!