If Heavyweights Fall, Kiss the Market Goodbye
Today, traders were a bit confused by the rate hike. The Emini was initially up, down and finally back up again. The dust still needs to clear, asserts Jeff Greenblatt, director of Lucas Wave International and editor of The Fibonacci Forecaster.
It’s been common knowledge in recent months the market has been held up by heavily weighted tech stocks. Apple (AAPL), Alphabet (GOOGL), Microsoft (MSFT), Amazon (AMZN) and Facebook (FB) has kept the freight train rolling while different sectors have alternatively taken breathers.
Then a strange thing happened. If you had an early dentist appointment Friday morning (June 9), you came back to see the NASDAQ down 100 and the Dow up 50. You may have thought the Novocain didn’t wear off. The market stood aside and watched while the big-league tech names dove off a cliff. Goldman Sachs issued a report that basically said these stocks were acting as a safe haven, the equivalent of bonds or utilities stocks. Clearly traders are concerned about a bubble being exposed so the market dropped. The PHLX Semiconductor Sector (SOX) came along for the ride but by Wednesday the NYSE Arca Biotechnology Index (BTK) which represents biotechnology was already at a new high.