No, not the Netflix series. Leading stocks.
Over the last few days, the stocks that had been holding the best against the market decline broke badly, across various industries. May it be general sentiment, overcrowded opportunities, or any other reason, such behavior is never a good sign.
Chip and IoT sensor producer PI suffers an increased volume reversal, indicating institutional selling. Server hardware stock SMCI had done the same the day before, only to gap down >10% sharply over night with high volume below support.
High-quality biotech HALO gapped down >10% below its 50DMA, now a damaged good. A few days before, medical stock HRMY crashed 15% over night below its 200DMA. Phramaceutical stock NBIX sold off massively, giving back 3 months of gains in a single day.
The leading and somewhat recessionary rising star ELF shows signs of a negatively resolving digestion and falls prey to heavy and consistent selling, driving its price in a steep and angle 16% off the Highs in 3 days below support.
5G network and fiber broadband stocks CLFD and CALX crack in one day >15% below their 200DMA and 50DMA, respectively, on massively increased selling pressure. Their thin trading activity exacerates the problem.
All the while, the illiquid chip stocks AMRK and AEHR break into New Highs on volume from deep, erratic and faulty digestion patterns in a precarious market, which in all likelihood might turn into significant bull traps. We will see.
PANW, one of the last holding high-quality tech stocks, follows the rest of the elephant elders into the forest to die, undercutting its recent Lows and embarking on the journey of a long-term downtrend.
All this is happening in the days leading up to the CPI report (which will be reported this morning and is breathlessly awaited by everyone and their grandmother in this news-driven market), while market indices drift up on light volume and another >180% meme-rally can be seen in Bed Bath and Beyond.
Something is afoot, and its not good. These are not signs of health. Good stocks are breaking bad, and institutional money is bailing them.
Beware, and guard your capital like it’s the apple of your eye …
