Stocks Drop, As Growth Stock Breakouts Turn Mixed

U.S. stock indexes and growth stocks drove hard south in late morning trade Friday, calling the recent uptrend signal into question.


Shelter was scarce as everything from growth stocks to the Dow Jones utility average lost ground.

The Nasdaq skidded 1.6%, while the S&P 500 and the Dow Jones industrial average fell 1% and 0.7% respectively. Small caps in the Russell 2000 dropped 1.2%.

Volume in the stock market rose in the NYSE but fell in the Nasdaq.

Widespread Losses

Losses appeared almost everywhere.

Chip stocks in the Philadelphia semiconductor index dropped 2%.

Growth stocks in the Innovator IBD 50 Fund (FFTY) and the Innovator IBD Breakout Opportunities ETF (BOUT) fell 1.4% and 1.6%, respectively.

Utilities in the Dow Jones utility average inched down 0.2%. The iShares Gold Trust (IAU) gapped down 1%.

Sign Of Danger

Individual investors will be watching the indexes to see if they can rebound and how they close. Heavy-volume selling early in a confirmed uptrend is a sign of danger.

Among recent breakouts, some are holding up and others struggling.

On the troublesome side, prepaid debit card provider Green Dot (GDOT) broke out in heavy volume Thursday, rising 8%. Late Friday morning, the midcap stock unwound the move as it fell 6%. Green Dot is now about 5% below the 91.61 buy point, not a comfortable place to be.

Tableau Software (DATA) broke out Wednesday in heavy volume but dived back under the 118.18 buy point Friday morning. The stock was trading 3% under the entry.

Managed-care provider Humana (HUM) broke out Wednesday in heavy volume, clearing a 341.40 buy point. The stock has retreated to about 1% under the entry.

On the bullish side, internet marketer QuinStreet (QNST) is moving sideways after a recent breakout, holding about 2% above a 16.52 buy point.

O’Reilly Automotive (ORLY) popped above a 351.75 buy point in strong volume Thursday and is holding just above the entry.

Walmart Up Again

Walmart (WMT) is on track for a seventh up day in a row. The stock cleared a 100.31 buy point in late October and is gripping a 5% gain.

In another bad sign for the new uptrend, the new lows tally Friday morning was running above the new highs count. On Wednesday and Thursday, new highs led for the first time in more than five weeks.


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Originally posted 2019-09-19 23:25:01.


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