This was because many of the tech and financials stocks were showing short-term tops. Yesterday, after the market BIDU, AMZN, and QCOM reported good earnings and news. The 3 stocks did well individually and helped the market to open higher. But, the market quickly succumbed to the pressure from profit-taking. The financial sector got hit pretty hard, as XLF gave up 6.72%! GS was down 4.03%; BAC lost 8.37% (we locked in our +100% profit at the right time); MA slid 4.62%; and MER dropped 14.11%!
BIDU traded as high as $341, but, closed at $335.08, up just over +16%. AMZN traded as high as $82.38; and closed at $78.72, up +11.6%. QCOM went as high as $54.51, closing at $52.43, up almost +17%. I do think that all 3 stocks have more room to go higher.
The Dow closed down 283.1 points; SPX lost 29.65 points; Nasdaq fell 45.77 points:
VIX went up +10% to close at 23.44. SOX (semiconductors) was weak, losing +4.22%. HGX dropped 8.61%. UNG was down again, dropping 5.38%; but, USO (oil) bounced up +1.44%. XME (metals and mining) slid another 3.99%. GLD (gold) and SLV (silver) recorded small gains. FXI (Chinese ADRs) slipped 4.3%.
SPX
SPX lost 29.65 points to close at 1252.54. It closed at its 10-day MA. The MACD flattened.
Nasdaq
Nasdaq fell 45.77 to close at 2280.11. It closed just above its 20-day MA. Its MACD also flattened a bit.
The market is doing what it’s supposed to do: take some profits after a week’s gain. Although the quick drop may have been a little sharp, sometimes this could be a good thing. This may help to release the selling pressure fast so that the market can resume the recovery. VIX jumped 2 points today. If it stays below 24, the market should be in a pretty good shape. Above 25 would not be good for the market. Tomorrow is Friday, so people may want to keep things in cash. If the market can hold flat or maybe even make some small gains, it’ll be encouraging.
Good night and HappyTrading! ™
