Keep An Eye On Technology And Small Caps
Technology stocks (NDX and QQQ) had a bad day today and it showed up as a big negative divergence in sentiment strength scores on Twitter. Although small caps (IWM) closed positive today they had a rough day on the stream. Meanwhile the S&P 500 index (SPX and SPY) just keep on climbing with strong support from people on Twitter. One day doesn’t make a trend, but it is something to keep an eye on.
Also take a look at the weakest stocks on StockTwits and Twitter today. The lists are littered with Technology (and other recently loved stocks). Technology was one of the legs of the stool I’ve mentioned for a sustained rally so it’s important that today’s action doesn’t continue.
Another leg of the stool are financials (XLF). So far they’re holding up, but watch them carefully because social media momentum isn’t confirming the new highs. Instead, it is compressing in a triangle so price could break either way.
Disclosure: None.