I have been in this business long enough to know what really happened in the markets on Monday. It was not jitters over Russia. Nor was it fears of economic slowdowns or whatever other reason of the day the financial media may have pulled out of their lexicon. It was a good old fashioned program traded asset allocation. It did not happen at the open. The program desks waited for the Monday morning lift to get a good level to fade. Then the programs hit the tape.
Money Came Out of Tech, Biotechs and Internet Stocks
Money came out of tech, biotechs and internet related stocks and went into income oriented stocks and staples. All other movement was merely just collateral damage.
The programs looked to be a typical VWAP execution – volume weighted average price. It was spread out over several hours. The executions dried up by 2PM, selling pressure was exhausted and the markets closed well off of their lows. In the final analysis, it was a bad day for growth stocks and good day for above average dividend stocks.
A Change in the Portfolios
For the first time in a month, I made a change to the growth portfolios. This time around we swapped out positions of Jet Blue (JBLU) for Juniper Networks (JNPR) as I continue to add to internet and cloud tech plays.
Expect the extrapolators to be out in full force today. I think that what happened yesterday will not spill over to today. Although, new highs seem out of reach until April at the earliest.
Disclosure: At the time of this commentary Scott Rothbort, his family and/or clients of LakeView AssetManagement, LLC was long JNPR — although positions can change at any time.
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