News:
Tech giants Microsoft and Alphabet reported earnings after Tuesday’s close. The results pulled the market in separate directions on Wednesday.
- MSFT +3%
- GOOG & GOOGL -10%
Risk-on stocks got clobbered during Wednesday’s session.
The indexes all closed with losses.
- Dow Jones -0.3%
- Nasdaq -2.4%
- S&P 500 -1.4%
- Russell 2000 -1.7%
The Nasdaq officially entered a correction, falling more than 10% from its previous record high.
The S&P 500 fell below the critical level of 4,200 for the first time since May.
Sector Round Up
The selloff, while intense, was not all-inclusive. 9 of the 11 sectors closed with losses.
The winners…
- Utilities (XLU) +0.6%
- Energy (XLE) +0.3%
At the bottom…
- Consumer Discretionary (XLY) -2.0%
- Real Estate (XLRE) -2.1%
- Communications (XLC) -4.3%
Notable Name
Google parent Alphabet (GOOG, GOOGL) was the single biggest contributor to the losses, falling nearly 10% after disappointing earnings.
- The company topped projections on revenue and earnings
- But poor growth in cloud computing sent share prices lower
- The two tickers shed about $155 billion in market cap combined
Technicals:
The S&P 500 fell into a technical support zone during Wednesday’s session…
A look back to this time last year reveals a local bottom.
And current RSI levels are nearing oversold.
We maintain our bullish outlook and will add to our seasonal swing positions today.
Your latest readout…
- The VIX jumped above 20 again
- RSI levels are mostly neutral, the Russell 2000 is oversold
- The put-to-call ratio is oversold
Timing:
This morning, Wall Street will look to the Bureau of Economic Analysis for the advance estimate of the Q3 GDP.
Your rules for big news releases…
- The market’s reaction is more important than the news
- Never trust the first move
Watchlist:
^Open PositionMETC support at $11
SRRK key level $9
EPAC support at $28
PGTI support at $30
LOGI on watch