I love that title. I admit I’ve used it before.
It may sound innocuous, oh, just some fat little a-hole losing his step on a jungle gym out there, but really it’s a shitload of money leaving the equity markets.
So we’re experiencing our first major sell-off since the dawn of the gilded era. Fair enough.
What to make of it?
Thus far, the sell-off does not appear to be the game changer for this rally. It could/should signal a needed rest. The market was too extended to find any more VHCs which, if today is any indication, is startling the shit out of land lubbers. Plus, the market has been very strong, as holders of TZA will attest in reverse, and any kind of dip will most likely be bought.
Why do I think this?
Lets look at stocks over 50b that are up or down more than 2.5%:
These numbers are not egregious. During a real menly man’s selloff, you will see many more down than just the 7 listed here (for reference there are 128 stocks > 50b in mkt cap)
Let’s look at sector rotation:
66/239 Industry groups are lower on the day, or a shameful 27.6%.
6 /239 industry groups are down more than 2% today.
All in all, I am REALLY happy that the market is pulling back here, bc it is much better for bulls. The move over the course of Sept. was very powerful and it’s really going to take some oomph to flip that.
I mean, take a stock like INFN. The stock is clearly in an uptrend. Give it a few weeks, and another buyable setup will occur.