Over the last few years we have noticed that that old adage about selling in May and walking away had moved to sell it in April and walk away but we never knew how fast it would come.
It’s astonishing: the [CME:SPM14] was trading at new all-time contract highs up at 1892.50 only 10 days ago and as of Friday’s close has sold off 80 handles, returning to the price of February 19.
Like we said in Friday’s view, it’s the Nasdaq [^IXIC] that has been the leader on the downside and it stayed that way right into Friday’s close.
During today’s open outcry session we noticed on side-by-side one minute charts that the Nasdaq futures [CME:NQM14] often led the E-mini S&P [CME:ESM14] by several seconds or minutes, signaling breaks of price levels before the large index.
Nasdaq leads markets lower
Nasdaq closed down 54 points or -1.3% and closed at its lowest level since Feb. 3. The Nasdaq’s -3.1% weekly loss was the largest percentage weekly loss since June 1, 2012 and has fallen -4.7% in April. The Nasdaq has fallen -8.2% since closing at its March 5, 14-year high.
The selling has been centered on the high-flying biotech and technology stocks. To get a clear look at the selling we decided to pull some charts to show you how bad the damage has been.
High Flying Tech DAMAGE
Amazon.com Inc. [AMZN] Peak: Jan. 22 at $408.06
Friday’s closing price: $311.73
Decrease from peak: -24%
Facebook Inc. [FB] Peak: March 11 at $72.59
Friday’s closing price: $58.53
Decrease from peak: -19%, still up +7.10% Year-to-Date
Google Inc. [GOOG] Peak (split-adjusted): Feb. 26 at $615.04 Friday’s closing price: $537.76 Decrease from peak: -13%
LinkedIn Corp. [LNKD] Peak: Sept. 11, 2013 at $257.56 Friday’s closing price: $165.78 Decrease from peak: -36% since peak and down -23.54% Year-to-Date
Netflix Inc. [NFLX] Peak: March 6 at $458 Friday’s closing price: $326.71 Decrease from peak: -29% since peak and down -11.26% Year-to-Date
Twitter Inc. [TWTR] Peak: Dec. 26. 2013 at $74.73 Friday’s closing price: $40.05 Decrease from peak: -46% since peak and -37.08% Year-to-date
Yahoo Inc.[YHOO] Peak: Jan. 4, 2000 at $125.03 52-week high: Jan. 8 at $41.72 Friday’s closing price: $32.87 Decrease from 52-week high: -21% and down -37.08% Year-to-date
This week 54 companies in the S&P will report earnings. With the current downdraft and estimates for first earnings falling the tech sector is going to be front and center on traders’ screens. Can the markets keep going down? Sure they can but not at this pace…