By: Jeffrey Cohen, Investment Advisor Representative
US Advanced Computing Infrastructure, Inc.
We made our morning video which pointed to US equities being weaker, despite US equity futures indicating an UP or Green open.
As we checked our key industry sector indices, they were pointing to a declining market. However, the indices themselves (S&P 500, Nasdaq 100 and Russell 2000) were higher. This is a disconnect. We checked $TNA and $TZA, which allow traders to bet 3x on the direction of the market in the short-term. TZA (bear) was up, while TNA (bull) was down, despite the $SPY being up.
So, we move to our stocks. Just the four we have a position in, and a few others on our buy list.
Broken market, broken arrow, red dawn, Wolverine, OMG, Honey who shrunk the kids, operation RED SQUARE, and Great Scott!
We see fewer shares offered for purchase and sale at the top of the book (thin markets). We see larger spreads in price between best bid and ask. We see signs of liquidity weakness in downtrodden stocks. We see low volumes being traded.