After one of the more tumultuous sessions of 2015, stocks ended the day sharply lower.
Early on it looked like today's action would mirror Tuesdays, but that notion was quickly put to rest as the market fell under Tuesdays lows. You would think the best initial claims data in 15 years would put a bid under the market, but instead it helped to spook it.
My thoughts on the S&P 500 futures, $QQQ, $IWM, $IBB currently:
S&P 500 bounced off medium term trendline support. We may have seen the low today of this pull back from record highs.
The $QQQ however looks more ominous. Recent overbought levels are just starting to let up, and if history is any indication $QQQ could see further weakness with support at $105.
I believe $IWM will lead the way out of this sell-off and that the $120 support level will be key in determining whether this is just a small correction or the start of something much larger.
To think $IBB was $250 this time last year. Today it fell under the $340 support level. I think there is a good chance it sees $310 over the short term before it start climbing its way back over $350.
Bonds continue to sell-off, although today's reversal could market the start of a bounce. I talked in previous videos, recaps, and updates about the strong trend line of resistance. $TLT has since been smacked down is impressive fashion, with the implication being higher rates are on the way.
Individual names continue to work in 2015, but today the blood bath was more prominent. $YELP, $BIDU, $GPRO all led the way lower in rather spectacular fashion.
$YELP puts rocketed higher as the stock plummeted some 23+%
The market remains fickle. While the case that I see being made more frequently for a large correction seems to be gaining traction, I still think those expecting a large drop in stock prices are ignoring the same forces that have been behind this historic bull market. Central banks, zero percent/negative interest rates, corporate buybacks... every pull back has been a great buying opportunity. This has been true from the lows in March 2009 until just a few trading sessions ago. While I think there is a good chance we see some further weakness, I will be watching $IWM for a move higher amid continued selling as a sign we could be seeing a bottom.