Well, that didn’t feel good.

Friday’s tech selloff didn’t show my short term trading account any mercy.  Luckily, stops kicked in and I was only down a few hundred bucks for the week.  I’m now sitting on over 90% cash headed into Monday with positions in C, NOW, NOC, and ISRG.  Remember, cash is where you want to be during draw-downs so there are funds available to buy great stocks at discounted prices.

IWM Chart is concerning

• first close below sma50 since first week of May
• slightly oversold, but still room below – downside target 160 near sma100 (this would be a big pullback)
• needs to hold 162

IWM

SPY Chart topping?

SPY is interesting here.  Not only are we near all time highs printed in January, but we’re also near the top of a channel. Normally, this would be considered bearish, but let’s not ignore that SPY is still in an uptrend dating back to early April.

SPY

SPY and IWM are telling us one simple message – investors are a little more risk-off right now, but without significant conviction (volume insignificant).  Of course the charts could show a new downtrend, but the more likely explanation is that money is rotating out of growth stocks/high fliers towards safety and value.  That doesn’t mean the market is going to hell (yet), but it does mean you may have to look for opportunities in previously boring sectors (energy, consumer non-cyclicals, and banking).

Earnings from some of the most popular companies like FB and TWTR are also rewriting the market in a big way.  Are the FANG stocks losing love?  Most likely FANG is going through a breakup.  There is a big difference between a Facebook timeline and Netflix movies.  Treating them as a basket is dangerous going forward.

Earnings next week of interest:

a few ER’s/Portfolio✅

M $CAT $CHGG $ILMN $STX

T $AAPL $AKAM $BIDU $I $IQ$PAGS $PAYC $SHOP $ULTI $ZEN

W $CRUS $DXCM $FTNT $HUBS$IDXX $QRVO $RACE $SODA $STMP$SQ $TDOC $TRIP $TSLA $WYNN

Th $ACIA $ANET $ATVI $DATA $GDDY$MGM $MZOR $NVRO $REGN $SEDG$SHAK $TRUP $TTWO $TWOU $W

— Tom Wrigley (@WrigleyTom) July 27, 2018

As we head into the first week of August, it’s starting to look like the market is confused.  This means taking advantage of moves and quickly taking profits – that’s my short term trading account mentality until earnings season is out of the way.  Then we’ll have to start thinking about mid-terms. Ugg.