The market pulled another one of its “pull the rug out” type of moves on Thursday, something that is not uncommon in this market. A big futures-led gap-down open took the Dow Jones Industrials Index down around 250 points, or a little over 1%. In a market that seldom pulls back 1%, this counts as a bear market of sorts.
In the process, leading stocks start to look ugly but just end up pulling back into areas of logical support, and then turn back to the upside. The Dow, S&P 500, and the NASDAQ Composite all bounced off their 20-day exponential moving averages. And, as is also common in this market, a big, fat juicy buyable gap-up in a new-merchandise name, Roku (ROKU), occurs on a day like this, making it difficult to find the stomach to step in on the trade.
ROKU opened up Thursday at 24.75, quickly dropped to 23.86 in a few seconds, looking as if it might succumb to the general market selling pressure, and then immediately launched to 29 in a mere 15 minutes. If one had the intestinal fortitude to step in once a low was set, one profited handsomely. As always, easier said than done, but typical for this market.
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