Taking a Deeper Look into the Market Rotation

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I wanted to highlight the fact that the overall market isn’t in any real danger, just the Nasdaq. Again, and I cannot stress this enough, this drop in tech is exactly like early 2014. After the ebb tide had been reached, dozens of tech stocks dropped by 50% from their highs — so be careful about buying into shallow dips.

With volume accelerating, there are some interesting dichotomies setting up — namely in retail and healthcare. Tech, for lack of a more eloquent phrase, is fucking dead.

I’ll break today’s action down by sector.

Basic materials: HP +4%, CHK +3%, CPG +2.4%
Consumer Goods: UAA +4%, PII +3%, COTY +2.5%; QRVO -4%, KEYS -2.8%, UN -1.5%
Financials: BRX +2.5%, MAC +2.5%, GGP +2.4%; BSBR -3.6%, CSGP -2.4%, BBD -2.6%
Healthcare: UHS +2.5%, GILD +2.1%, MD +2%; ALGN -6.2%, IDXX -5.1%, TSRO -4.3%
Industrials: GE +3.2%, FLS +2.6%, SERV +2.1%; TDG -5.5%, ESLT -2.4%, TTC -2.2%
Services: SLB +3.8%, CBS +3.8%, BBBY +3.7%; NFLX -4.8%, AAL -4%, IAC -3.2%
Tech: AKAM +2.4%, IMOS +2%, TRIP +1.9%; OLED -8.5%, STM -6%, SHOP -4.8%
Utes: OKE +1.2%; EIX -1.6%

Overall, basic materials, services, consumer goods and financials are up, while losses remain most readily found in both healthcare and tech. In healthcare, biotech and high risk trades are getting mauled the worst.

My portfolio is +0.02% on a median basis. I’ll take it.

Since losses are concentrated and predictable, you’d have to be a moron to continue losing money past today. Then again, there is an insatiable desire for people to buy dips, so expect to see valiant efforts on behalf of tech loving submentals. Ultimately, they’ll fail — because the big money shift is on and it’d be hard to reverse course now — after such a minor blood letting.