If investors were hoping that the markets would shrug off the wicked price action from Wednesday with a relief rally today, they were partially correct. However, it turned out to be another session of “sell the rip” and “buy the dip.”
If one was to discount the premarket low (4363.25), the S&P 500 futures index had a not-so-harmful “inside day.” The robust continuation rally from the premarket off the open came up well shy of Wednesday’s high (4422 vs 4446.25) and the steep decline found support just above Thursday’s low (4294.75), only reaching 4298.75.
The bulls did make a weak attempt in the final 15 minutes to finish in the green, but once it surpassed the close (4341.50), the index quickly unraveled.
Once again, on a closing basis, the decline was manageable, but it should be noted that the index did post a new closing low for the recent slide. For the session, the index declined 23.75 handles to close 4317.75.
Johnson & Johnson (NYSE: JNJ) was the biggest winner of the top components. Fresh off the momentum from its Q4 report, the issue gained $2.21 or 1.31% to close at $170.59. That is $12.33 or 7.8% above Monday’s low ($158.26).
That was a solid gain compared to the cash index which declined 0.54%.
By far the biggest loser of the top components was Tesla Inc. (NASDAQ: TSLA), which was slaughtered despite a Q4 beat on both ends. The valuation gremlin is now coming after the issue which swooned $108.31 or 11.5% to close at $829.10.
PreMarket Prep Stock Of The Day: Tesla Inc. (NASDAQ: TSLA)
The dangers of straddle buying ahead of earnings reports are explained. Read more about the TSLA strategy here.
