Nothing Out of the Ordinary
On Wednesday I mentioned the VIX was approaching one-year lows and the risk of a jolt had increased. Some of that jolt was seen yesterday.
The pullback in the major stocks that occurred was very normal. In fact, only 10 of the S&P 500 constituents come into today having a ConnorsRSI reading under 10 (and none are under 5). Therefore the pullback is nothing out of the ordinary. The bigger selling has occurred in the small cap stocks and many of the high flyers of March (the easy money momentum stocks) are now down double digits in under 8 weeks. Chasing unseasoned companies because their stock price is moving higher is a tough game to play.
Ideally the market goes through another 1-2 days of selling. This will flush out even more speculative money and more easily pave the way for higher prices.
Today’s Potential Opportunities on Further Pullbacks: