State of the US market: It’s messed up

Here are the market observations for today:

1. Five days of decline and everybody is nervous. No doubt, there are good reasons to be anxious and nervous.
2. The S&P 500 and Dow fell 1.7% and 2.2%, respectively, for the week, their biggest such declines since June. The Nasdaq lost 1.6% last week, finishing its worst week since July
3. Has the nature of the market changed? Sell the strength is the new game. 
4. One week of decline and every analyst in town is downgrading US equities. Bank of America analysts now say that they expect the S&P 500 to fall to 4250 by the end of the year, a roughly 5% decline.
5. Strange trading action today: VXX ETF, also known as Fear ETF is trading down 2%. Why people are not buying fear?
6. The most surprising part of today’s market: Small cap index IWM is trading green. Here’s the chart. It’s messed up and too complicated to understand what to buy, and when to sell.
7. The correction in the market is also pulling down stocks like AMD. The Line of support stands at 102
8. Lots of Bullish noises but GEVO has corrected a lot. Will it find support here?
9. The strength in small-cap stocks seems to help speculative growth stocks. No wonder AEHR is making a solid bullish move.
10. Two speculative growth stocks have pulled back: 1. all eyes are on BBIG. Will it hold 9.6?; and 2. Has PXLW found a bottom here? One can hope for it with a stop loss below 4.6.
11. The last few weeks have been disastrous when it comes to trading Pharma/Biotech stocks. What a collapse in stocks like DVAX, MDXG, and even NVAX 🙁
12. I still don’t understand why on a day like this OCGN, a biotech name, is rallying like crazy.
13. The rally in commodity prices driving inflation higher. China’s producer-price index is 9.5% higher in August from a year earlier, the fastest increase since August 2008, when it rose 10.1% ~ China’s National Bureau of Statistics
14. Commodities recording a sharp surge in prices: 1. Aluminum; 2. Coal and 3. Natural Gas
15. A 1% risk on a $10,000 account is the same as a 1% risk on a $100 million account. They are both one percent. The dollar amount is irrelevant.

Do let me know how I can make this section more useful.

Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purposes. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers