S&P 500 Holds Recent Gains, Despite Tech Selloff

Yesterday's action was a bit odd. The S&P 500 held its ground following Tuesday's big rally. Big tech stocks like CSCO, INTC, QCOM also fared well, while many of the recent leaders in tech (FFIV, CRM, VMW, AKAM, RVBD, etc) had huge selloffs on very high volume.

Moreover, the VIX barely moved yesterday, so many hedges weren't really working in terms of trying to hedge against a selloff by using broader market gauges. The high volume readings in those names is a bit disconcerting, so it will be important to see how they trade going forward, if they begin to build new bases, if they can get back above their 50-day lines, etc.

The jobless claims were down 11,000 over last week, which isn't bad. And the Monster Employment Index rose for the 8th consecutive month, posting +16% yr/yr growth. While that's a bit of a slowdown, it is still a positive datapoint in terms of the employment picture at small and mid-sized businesses.

The dollar is firm today, which is weighing on commodities. Oil and gold were up sharply yesterday, so their declines today still leave them up near $83 for oil and $1343 for gold.

The Bank of England held rates at 0.5% and the ECB held their rates at 1.00%. Asian markets were mixed overnight, with the Yen rallying to new 15-year highs.

The 10-year yield broke down to new lows yesterday, and is hovering near 2.39%; the VIX is barely higher today, trading at 21.68 and not predicting a pickup in volatility right here.

Trading comment: I have warned recently that many of these leading stocks looked extended. Yesterday's pullback was sharper and on higher volume than I would have liked, but as they say you have to trade the market that is, not the one you wish for.

I will continue to monitor these names for buy opportunities. How they react in the days and weeks following yesterday's selloff will be a key tell.

long CRM, FFIV, VMW