Last week we watched the large-cap stocks sell off. They recovered yesterday (as evidenced by strength in $QQQ), but today they are selling off again.
To be specific, if we only look at +/- 5% today stocks, above $10B in market capitalization (thank you Finviz), then we see the large growth stocks (e.g., tech) are down, and the more conservative stocks (e.g., pharma) are up. Large stocks have liquidity to enable large positions to change without significant price distortion, so we would look to them first for money flow estimates.
The one stand-out exception is $NVDA which is up 0.7% today.
As we step back, the market is showing choppiness (up and down with little direction). A little more down than up, which is understandable since interest rates are rising (and this lowers equity valuations). We look to the large capitalization stocks to assess money flow on a daily basis.
One of our proprietary metrics is to look at total U.S. listed stock market capitalization for the stocks that pass our data validation. Tuesday's market fell and Wednesday's market rose, and anecdotally we saw this initially in the large cap stocks.
At some point when the valuations move enough, we would expect to see a wealth effect. Current equity valuations are around $50T (+/- $5T).
What does this mean for you? Let me know in the comment section below.
Stock Market BLOG
President and Investment Advisor Representative