Selling Done Or ‘Healthier’ Dose Ahead?

2021-04-19

The stock market hit the brakes Monday on a record-setting surge that started last week.

The Dow closed at 34,077.63 points to slip .36% (dropping 123 points on the day). The Nasdaq dropped to 13,914.77 points for a .98% stumble while the S&P 500 was near flat, losing .53% to 4,163.26 points.

Pick a reason why all three major indexes stalled: darling fitness stock crashing, politicians pushing for higher taxes while infighting along the way, fears of digital currency disruption, or airlines losing money. The news wasn’t kind to traders facing a day of selling into the uncertainty.

Simpler’s traders were keeping an eye out for more movement to the downside that could translate into buying opportunities. The second half of the month is exhibiting sloppy downward chop across the indexes.

Action across daily charts signaled a higher probability of opening the door for a reversion to the mean in tech-related stocks over the next few weeks. And Simpler’s traders continue to scan for select stocks that tend to buck the trend.

Positions in the near future aren’t dialed into any certain tickers or sectors in an effort to stay nimble and maintain a balanced portfolio. Most positions are in tickers that are familiar to traders without straying too far from their comfort zone.

This market has displayed a tendency to buck expectations and move quickly against market sentiment. Example in play was the shift from all-time highs to close last week into the selling today that sent all indexes leaning to the downside.

Is the selling today the pullback of the week or is there something more “healthy” around the corner?

We’ll be watching all the indexes for indications they might sell off together, which could lead to a “true” pullback.

April to date showered the market with higher rallies, so only time will tell if this month’s market will sell into a quiet zone as the month closes.

We Saw: Selling that stopped upward surge — 

  • All three major indexes closing to downside
  • Calls for more and more taxes
  • Investors nervous over news and digital currency

We’re Watching: Momentum to downside that opens upside plays —

  • Any remaining “hot” earnings plays for this quarter
  • Cutting cord on any losers in the portfolio
  • Setups that have stronger signals before committing