| Author | Message | ||
     Entrepreneur Kurra Bewarse Username: Entrepreneur Post Number: 3948 Registered: 05-2011 Posted From: 24.164.46.35 Rating: N/A |
Market Briefing: Selling into strength (again) The stock market started today on a strong note in a very scripted way. The S&P 500 peaked its head above 4600, but it has been getting a haircut since doing so. The S&P 500 is up 0.5% for the session, but that is well off its session high. The same can be said for the other major indices. The Nasdaq Composite, for instance, had been up as much as 2.1% but is now up 0.6%. Those would be categorized as solid gains in the 2021 market, but in the 2022 market they are looked at nervously since they are reminders that it is proving difficult to sustain any buy-the-dip momentum. The inclination to sell into strength, particularly after a period of sharp losses, is not the characteristic of a bull market. That's not to say we are in a bear market, but it's a statement of fact that the bullish bias has been reined in by rising interest rates and fear of a more aggressive Fed. It is also being reined in by the price action itself, which continues to leave many participants on edge about the prospect of further corrective activity. To this end, the earlier news from CNBC that Peloton (PTON 25.59, -6.25, -19.7%) is temporarily halting production of its bike and treadmill due to waning demand served to take some rebound momentum out of the market as that was another reminder of how carried away some stories -- and story stocks -- got last year. The hit Peloton took following the news, however, underscored that bad fundamental news can still leave a lot of momentum stocks at risk of further downside, even after they have already experienced material markdowns related more to macro worries than company-specific shortcomings that could soon possibly be exposed as we move deeper into the Q4 earnings reporting period. The Russell 2000 is up 0.7% and the Dow Jones Industrial Average is up 0.4%. |