Major averages were mixed on mixed volume as leading stocks got caned. Such has been standard whenever the averages come off by a relatively smaller amount. TSLA, LNKD, FB, TWTR, and a number of others all sold off as much as several percent. Meanwhile, the S&P 500 was about flat and the Dow Jones Industrials was fractionally up on the day. The action and sharp divergence between the NYSE-based indexes and the NASDAQ smacked of a rotation into safe big-cap names as growth names of all stripes were tossed out the window. The sharp price breaks in what were formerly strong-acting and orderly leading names does not appear to bode well and provides a stark example how "low-entropy," constructive price action can suddenly morph in "high-entropy" chaos in short order and seemingly out of nowhere.
Institutional fund managers are mostly lagging the S&P 500 once again this year even though they aim at least keep pace with their bogies. Thus if they sell, they are quick to jump back on board or add on dips in an attempt to augment their lagging performance which, along with QE, keeps a shallow floor under corrections. That said, institutional buying remains scant. This morning futures are down as the sell-off looks to resume, at least at the open.
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