Key Points:
FB’s $125B market cap loss is the largest ever daily cap loss for a stock.
Of four largest prior: INTC (2000), MSFT (2000), AAPL (2013), XOM (2008), three were well into a developing bear market. In the one (AAPL 2013) where the market was near highs, it had no effect on the uptrend.
FB is large but still under 2% of the S&P 500. Despite today’s drop costing the S&P 500 50bps, the index is down just 30bps. Average stock is up 0.5% today.
Indicators to closely watch:
Market conditions: all indices in a Confirmed Uptrend. Low distribution day counts except for NDQC (5).
Sectors: All but Staple above 200-DMA. All but Cyclicals/Materials above 50-DMA.
Stocks:
Favored group of leadership stocks intact, 69 Focus List stocks which is above the long-term average. 20% are actionable. Earnings reactions have been slightly positive.
Good S&P 500 earnings result, beating EPS by 4.2% at median. 70%+ of S&P 500 above 200-DMA, 64% above 50-DMA.
Coming earnings from S&P 500 heavyweights, Amazon, Apple, and Exxon Mobil, and many of our favored Focus List names, like SQ, ILMN, ATVI, ANET, EW, FLT, and GPN, could be key in further affirming our bullish stance. However, broadly negative reactions could be even more important that FB’s huge decline today.
