The market is under pressure this morning due to the missile launch by North Korea. Fact is; we’ve been saying in these pages for the last couple of weeks (here and here) that there’s been a slight change in character in the market, the North Korean missile is just something we can blame.
Unlike previous times when the market sold off we did not see a V-bottom nor did we see an uptick in stocks rebounding hard after the sell-off this time around. As you can see in the chart below, anytime we had a spike in 1-month new lows we typically had a day with a lot of stocks going up 4% or more immediately after, that was not the case this time around. Overall, breadth has been slow to rebound, unlike previous times.
The indices are below their 20-day moving averages and set-ups are scarce, act accordingly.
$DVAX $GRUB $NEWA $PLUG are the stocks of interest on the long side for me today if and only if they can get through yesterday’s high.
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