Markets displayed erratic behavior Wednesday and this type volatility is more indicative of tops, as bottoms round out in a smoother fashion. The Nasdaq which cut a 2% early on loss in half at lunchtime and then fell back lower by 2% only to have a liftoff at 2pm which left it just short of the UNCH mark. We have discussed ad nauseam that Nasdaq underperformance is worrisome for overall markets. On a weekly basis as well, the Nasdaq is lower by 2.6% so far and the S&P 500 down 1.4%. All 4 “FANG” stocks weighed on the Nasdaq as each closed lower today. GOOGL which reported earnings Monday after the close is off more than 60 handles from Tuesdays intraday highs. Benchmarks seemed to take their cue from the huge oil reversal with crude rising almost 9%. The group has been slaughtered, news has been horrific with downgrades, layoffs, cap ex cuts, earnings messes (APC excluded), etc. NOV slipped almost 9% today after reporting numbers but did form a hammer candle on enormous trade. There were some oversized moves to the downside today with LOW falling more than 6% after announcing an acquisition of a Canadian retail play. Perhaps they see some value where others are not. Or were they able to grab it on the cheap as our neighbor to the North is in recession due to the crude tumble. Another name that not many mentioned today was the JLL earnings report. The stock fell almost 12% and this real estate play has a good barometer on the health of the global economy as it operates all over the world. The news echoed the weak services numbers that were reported early today as well. Utilities continue to impress and below is the chart of FE which we profiled in our Monday Game Plan.
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