Forget the summer of love. Fear and panic are in the air, and investors are looking for some handholding.
Each sector in the S&P 500 is lower, with Energy taking the brunt of selling, and Financials continue to move sharply lower. I think there are seriously oversold stocks in the oil patch, but I am not confident about value in Financials just yet. Materials and industrials are taking it on the chin as well.
Technology looks compelling and unprofitable tech names not in the S&P are moving higher.
The so-called stay at home names also enjoying nice bounces today. It’s a tricky area with most of these ideas being better for trading; although, I do like long term potential for DocuSign (DOCU) and Chewy (CHWY).
S&P 500 Index
Communication Services XLC
Consumer Discretionary XLY
Consumer Staples XLP
Health Care XLV
Real Estate XLRE
Fear & Panic
There are lots of places to judge investor angst, including the CBOE S&P 500 Volatility Index (VIX), which is up more than 30% and above 25. The last time the index spiked to this point was May 12 when it closed at 27.59 after tickling 28.38.
This kind of spike is often a buy signal. In fact, on May 12, all the major indices were lower and then moved much higher:
- S&P 500 closed at 4,063
- NASDAQ closed 13,031
The first bounce attempt is fading but gave us markers:
- S&P 500 4,239
- NASDAQ 14,178
I’m spying names in the Russel 2000, which is clearly oversold.