Monday's Mid-Day Sell Off

Given that some of the hottest stocks of the last few weeks sold off sharply Monday afternoon, you would think that yesterday's reversal was simply profit-taking after a big rally.

However, when we looked at the average intraday sell off of stocks in the S&P 1500 grouped by deciles according to their performance since the March lows, we found that not only were investors selling their winners, but they were selling their losers too. The two groups of stocks that had the biggest reversal off their highs of the day were the 150 stocks that have performed the best and the 150 stocks that have performed the worst since the March lows. Each of these groups closed an average of 2.5% off of their intraday highs.

click to enlarge

While the S&P 1500 is currently 6.1% off of its 52-week high, the average stock in the index is currently sitting more than 26% below its 52-week high. As has been the case since last Summer, large cap stocks are holding up the best (down an average of 22.5%), while smallcaps have been hardest hit (-30.9%).

On a sector basis, even though the Consumer Discretionary sector has been one of the better performing sectors this year, they also fell the furthest from their highs last year. For that reason the average stock in the sector is 31.1% off its 52-week high. Financials and Technology round out the top three, with average declines of 29.3% and 29.1%, respectively.

Putting things into perspective, even though the Energy sector hit a 52-week high today, and the individual stocks seem like they are up every day, the average stock in the sector is currently 16.9% off of its high. So even in the hottest of sectors, not every stock is close to 52-week highs.

Comments

[adan:]

though not sure what this info might mean, i still thought it was interesting, thanks :-)

2008 May 20 11:54 AM

[daniela:]

Bespoke investment group has the best visuals of the market and the most informative. It puts things in perspective and where the market is heading. Thank you.

2008 May 20 02:41 PM