Risk… Is How Much You Lose When You’re Wrong

For the last couple of months, we have discussed the risk of the narrowing of leadership as money piled into an ever reducing number of primarily large-cap technology stocks. To wit:
‘This really is a more bizarre clustering of markets and sectors that I have witnessed in quite some time. However, for now, the rotation between sectors remains tight and it is the #FANMAG stocks that continue to elevate markets because of their sheer size. ($FB, $AAPL, $NFLX, $MSFT, $AMZN, $GOOG)
The question that continues to linger over the markets is just how stable is the advance? The answer to that question is unclear, but it is quite likely the spat of earnings growth seen over the last couple of quarters will soon end as year-over-year comparisons get decidedly tougher.’
Last Friday, a news headline questioning valuation levels triggered algorithmic trading programs to reverse and dump those stocks in mass.

This post was published at Zero Hedge on Jun 18, 2017.