The S&P 500 lost nearly 3% of its value yesterday, as an inversion of the yield curve convinced enough traders the risk of a recession is all too real. It remains to be seen if investors will continue to believe it, but the selloff to date still doesn’t qualify as a full-blown “correction.”
Macy’s (NYSE:M) led the way with its 13% plunge in response to a big earnings miss, underscored by warnings that tariffs were becoming problematic. Advanced Micro Devices (NASDAQ:AMD) fell 6%, as it was pegged as one of the more vulnerable names of a global economic slowdown.
Yet, there were some winners despite Wednesday’s misery. FireEye (NASDAQ:FEYE), for instance, gained nearly 3% for reasons investors are still trying to ferret out. Rival cybersecurity stocks didn’t fare any better than the broad market did on Wednesday.
Union Pacific (UNP)
It ended up coming back from the brink of the start of a truly devastating breakdown thanks to yesterday’s late-session rally. But, Union Pacific shares remain uncomfortably close to that last-ditch line in the sand. If one more bad day is allowed to take shape, it could mean a key floor snaps and opens the floodgates. And, for the record, UNP shares are likely already fighting a losing battle for two (semi-related) reasons.
The good news is, the most plausible landing spots for any pullback are well defined.
It has more to do with the broad market’s weakness than Oracle in particular. Nevertheless, the situation ORCL shares are in leaves them more vulnerable to major trouble than what most other stocks are facing at this time. And, the bears have already tipped what seems to be a pretty strong hand.
There’s also a great deal of similarity to the UNP stock chart. That is, Oracle shares are in a major, long-term uptrend but due for at least a small pullback to the lower edge of that trading channel.
Finally, as far as breakdowns go, the line Salesforce has dished out since the beginning of this month has been sloppy to the point of being untrustworthy. That is to say, this usually choppy stock could easily, seemingly, snap back to a bullish mode with just the smallest bit of help from the broad market.
On the other hand, we’re seeing a few more subtle red flags now that we hadn’t seen in a long while. Things could get worse for owners before they get better.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about him at his website jamesbrumley.com, or follow him on Twitter, at @jbrumley.