Big Sell-off On Monday

This doesn't mean stocks are destined for failure. It means the fundamentals will become more important. Unless you think a recession is coming, it makes sense to buy into corrections. This strategy has burned some in the near term because they have been used to 3% declines. An average year has one 13% decline. I think it's great that the stock market is getting rid of the euphoria without a recession. If a recession was to start in 2018 the total declines could get ugly as the euphoria became panic.

The tech and momentum stocks have led the market down in the past few days. As you can see from the chart below, the momentum factor fell about 4% on Monday. Intel stock led the charge to the downside because apple was reported to be ditching Intel chips in its Macs by 2020. Intel isn't a momentum name, but it did hurt the tech sector. Netflix is one of the few momentum names in the FAANG group without bad news coming out about it, yet its stock was down 5.1% on Monday and it's down 15.54% from March 9th. Nvidia stock was down 4.55% because analysts lowered their price targets because the cryptocurrency crash will mean fewer chip sales.