Last week I told you risk for the markets was off the charts. Last week Google is down 1.5%, FB down marginally, Amazon down 2%, AAPL up marginally and NFLX down 5%. Biotech is down 2.9% as is housing. These are not big numbers, but when you look at some of these charts we are starting to see technical damage for the first time in a long time.
Right now, the FANG stocks are getting hit. The question is whether there will be follow through. But other sink holes in the market are developing. The Transports got smashed on Thursday and it was only three weeks ago they gave the Dow a Dow theory confirmation when both went to new highs. On Thursday and again Friday the Dow itself hit new all-time highs. You see the trannies going the other way so this is becoming the classic non-confirmation.
Another week, another failed attempt to go down. What happened this time? I almost don’t remember. First, the health care debate was going to be delayed due to Senator John McCain’s operation to remove a blood clot from his brain. We later found out McCain has an aggressive form of brain cancer, and that shocked the nation.
The main U.S. stock market indexes gained between 0.4% and 0.6% on Friday, extending their short-term uptrend, as investors' sentiment remained bullish following recent economic data releases, among others.