July 30, 2021, 3:18 pm EDT
July 30, 2021, 3:18 pm EDT
Internet Down and Semiconductor Up
A Disappointing earning report from Amazon (AMZN) -7% dragged down many internet stocks (PINS -19%, EBAY -8%, ETSY -8%, PYPL -3%). But semiconductor is very strong led by KLAC +9% and others UMC, AMD, LRCX.
Overall stock markets are going through a pullback process for the last trading day in July. It becomes harder to identify emerging industry and individual stocks. Breadth readings keep deteriorating as shown on lagging small and mid caps. It means that the all time highs shining picture is painted by a few mega caps like AMZN, AAPL, GOOGL, FB, MSFT. The danger part is when those big guys are not able to perform any more. Falling speed could be fast for the stock markets.
From a technical point of view, all indexes are due for a pullback. For example, S&P 500 is up almost 9 straight month without a pullback.
COVID-19 delta variant is still a wildcard that determines the fate of reopening. Fed low interest rate and market friendly policy are still the primary driving forces for the stock market. Housing market is near the top because selling volume has been in decline for the 3 consecutive month. Job markets look rosy. Emerging markets like Brzail and China seem to get trouble where ripple effects are to be observed.
Overall, it is tougher to make profitable trade in this market condition. Be selective and nimble to go through this period.
