Does Sudden Sell-off Indicate Momentum Change?

A last-hour sell-off erased more than 360 point in gains on the Dow and the S&P 500 reversed course after inching closer toward an all-time high in trading Tuesday.

The Nasdaq continued its struggles – losing another 185.53 points – after hitting a record high last week of 11,108 points.

The Dow closed at 27,686.91 points to fall .38% (dropping 104.53 points on the day). The Nasdaq dropped to 10,782.82 points for a 1.69% tumble while the S&P 500 crumbled .80% to 3,333.69 points.

Does this sudden reversal of momentum signal a directional change or is the pullback to be expected within an extended rally?

For the Nasdaq and its tech-heavy stocks continue to weigh down the overall market trying to push higher.

The index is extended, and has been for some time, so which direction it takes off and how big a move is the challenge for traders to determine.

If key stocks such as GOOGL and TSLA recover strong movement to the upside, this could be the directional indicator.

Or, it could be 1999 all over again.

Profiting in this market requires considerable waiting for another key moment to the upside, and taking a few lumps like many traders suffered today.

While the market momentum teeters, it can present an opportunity to focus on less stressful scenarios.

Simpler’s traders are watching for tickers that avoid the hammering of an uncertain, volatile market. These stocks can fall in a variety of sectors and are distinguished by steady price movement no matter how much the overall market is struggling.

There is much to consider this week as the market continues to seek new strength while politics, economics, and market volatility create more uncertainty.

We Saw: a positive day turn sour in the last hour – 

• All three indexes dropping quickly into the red
• Tech sector leaders continuing to flounder
• Political emotion playing havoc in the market?

We’re Watching: and waiting with cash on hand –

• Bullish trends with more caution toward bearish turn
• For all the tickers not following the market
• Setups in: MA, PZZA, SPX, Dec Gold,