Monday started off well enough for the S&P 500 with the index poking its head into record territory at the open. Unfortunately, that was as good as it got and prices tumbled 1% from those early highs in a relentless, one-way selloff.
There wasn’t any news driving the morning selling and instead, this was simply a counter-reaction following seven consecutive days of new record highs, a streak that hasn’t been matched since the late ’90s.
Two steps forward, one step back, that’s all Monday’s selling was. No matter how good things are, down days are inevitable. And as expected, most owners didn’t flinch and prices bounced in midday trade because confident owners refused to succumb to the selling.
While the index ultimately finished 0.2% in the red, this intraday rebound confirms this is still a very resilient market. That means sticking with what has been working and continue holding for higher prices. The only thing that would give me second thoughts is if the selling crashes through 4,250 support. Until then, lookout above.
It’s been a while since I wrote about Zoom Video (NASDAQ:ZM), but that’s because this stock has been grinding away out of the spotlight. As I told readers a couple of months ago, this stock was buyable following its bounce off of $300 support. And look at that, two months later prices are 30% higher.
But as is always the case, we don’t make money until we sell our winners. 30% is a very worthwhile profit for two months of work and demanding more than that is getting a tad greedy. If a person really likes this stock, they can keep holding but move stops up to protect those profits. And even better, take a little off the table.
Remember, we can always buy back in if this grind continues through $400. Until then, expect this stock to take a breather at current levels for a while. (Two steps forward, one step back.)