An Orderly Pullback is more dangerous

The QQQ and IWM are now both down -6.5% from their recent high. The SPY is down -4.3% from its recent high. And the VIX is still only at 16.77. We are getting close to oversold levels. But the standard definition of oversold levels may not hold if the pullback (or downturn if one likes that term) is so orderly.

The markets do not seem to be in a hurry. Usually, they take an escalator when they go up and an elevator when they go down. But this time (so far) they have been calmly giving back some of their gains.

Note that some other stocks/ETFs have fallen more than the major indices I mention above.

TSLA -24%

ARKK -19%

NFLX -14%

XBI -14%

MSFT -12%

AAPL -11%

META -9%

NVDA -9%

SMH -9%

XLK -8%

The IWM and DIA have already fallen more than their weekly expected move so far. The SPY is close as well.

Here is how the SPX Sectors looks like.

One last thing: The major markets were all at some sort of support level as of yesterday’s close. There was some expectation that there will be a bounce off those support levels. That did not materialize. That is a big deal for swing traders.