If The Elevator Down Is Starting For Stocks, Time To Get The Shopping List Ready


The Nasdaq trade unwound some on Friday. From the peak Friday morning in the futures of 5,898 the tumble started around 11:00 am, falling to as low as 5,660. That’s 238 Nasdaq futures points or 4% – quite a sharp move.

Remember, it seems like an overdone trade (driven by the big tech stocks). But as we discussed last week, the tech heavy Nasdaq has simply been a catch up trade — something that has lagged the strength in the broader market.

Here’s the chart we looked at last week.


spx nasdaq

This chart goes back to the lows driven by the oil price crash that bottomed out earlier last year.

Still, with the Nasdaq at +18% year-to-date and S&P 500 +9% year-to-date, as of this morning, as we’ve seen many times in this post-crisis era, the air pockets of illiquidity in stocks c an give back gains very, very quickly. As they say, stocks go up on an escalator and down in an elevator.


nasdaq

The Trump trend, in the chart above, was nearly tested on Friday — the same day a new all-time high was marked!

If we get another few days of sharp downside, it will be a tremendous buying opportunity – get your shopping list ready. And if that downside slide does indeed come, it could come at a very interesting time. It would add another (but very significant) reason the Fed may balk on a rate hike next week. The other reasons? We discussed them last week (here).

What stocks should be on your shopping list, to buy on a big market dip? Join my Forbes Billionaire’s Portfolio to find out. It ‘s risk-free. If for any reason you find it doesn’t suit you, just email me within 30- days.