Bulls were thumped on Wednesday as traders decided to sell better-than-expected financial results at big technology firms. The Nasdaq 100 closed at 14,382, a decline of 2.5%. The weakness of the benchmark is troubling on a number of levels, states Jon Markman, editor of Strategic Advantage.

During bull markets stocks rally on bad news. In bear markets the opposite is true. This shift in sentiment happened quickly. New highs for the benchmark seemed likely only a week ago when professional money managers were being dragged into the market kicking and screaming. They were buying every dip because most trailed the NDX, their benchmark.

Even with the weakness during October the NDX is still ahead 31.6% year-to-date. However, pros are now less willing to buy dips. This shift means rallies are fleeting. Stocks ultimately fall on their own weight.

Alphabet (GOOGL) and Microsoft (MSFT) reported Tuesday that sales and earnings topped forecasts. Traders focused on an internal sales miss at Google Cloud, a relatively small subsidiary. Alphabet shares skidded by 9.5%. In the larger picture, this was probably an overreaction, yet in the near term, the message is clear.

Pros are looking for reasons to limit exposure to growth stocks. They no longer feel compelled to add risk to catch up to the NDX. It will be interesting to see how long this dynamic persists given that most pros still trail the benchmark.

The NDX has important overhead resistance at 14,999, the declining 50-day moving average. Critical support is 13,898, the 200-day moving average.

NASDAQ Timing: Members bought the ProShares Ultra QQQ (QLD) at $61.49 on October 6. The QLD is an exchange-traded fund that delivers 2x the daily performance of the Nasdaq 100 index. The position stopped out at $56.40 on Wednesday unfortunately.

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