{"id":34539,"date":"2023-07-12T06:45:11","date_gmt":"2023-07-12T10:45:11","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/the-meme-stocks-are-back-and-that-could-be-a-red-flag-for-the-stock-market-says-strategist\/"},"modified":"2023-07-12T06:45:13","modified_gmt":"2023-07-12T10:45:13","slug":"the-meme-stocks-are-back-and-that-could-be-a-red-flag-for-the-stock-market-says-strategist","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=34539","title":{"rendered":"The meme stocks are back and that could be a red flag for the stock market, says strategist"},"content":{"rendered":"
\n

The stock market rally of 2023 has been criticized by more than a few for being concentrated in just a few big tech companies.<\/p>\n

But now that a few other stragglers have joined of late, that\u2019s actually a cause for concern for investors, said Jonathan Krinsky, managing director and chief market technician at BTIG. <\/p>\n

\n

He notes that an index of meme stocks, notable for their popularity among investors fueled by social media, has gained 10% over the last three days, versus a 1.6% drop by consumer staples as investors back away from perceived safer haven stocks. GameStop
\n GME,
\n +1.57%<\/bg-quote>,<\/span>
\n AMC Entertainment
\n AMC,
\n +3.54%<\/bg-quote>
\n and now bankrupt Bed Bath & Beyond
\n BBBYQ,
\n +1.58%<\/bg-quote>
\n are some of the biggest meme names of recent years. <\/p>\n

<\/p>\n
<\/p>\n<\/figure><\/div>\n

\u201cOver the last 18 months, when the MEME index has outperformed the Consumer Staples Select Sector
\n XLP,
\n +0.15%<\/bg-quote>
\n by 10% or more over a three-day period, the SPX [S&P 500 index]\n SPX,
\n +0.67%<\/bg-quote>
\n was lower three and five days later 12 of 17 times for an average return of -0.83% and -0.68%, respectively,\u201d he told clients in a note published Tuesday. <\/p>\n

Meanwhile, 20-day performance had an average and median return of -1.45% and -1.6% respectively. He said the last time this happened was the 15 of February when the S&P 500 fell 3.62% over the next three days after this signal. <\/p>\n

\u201cBottom line: It\u2019s a double-edged sword when we start seeing some of the lower-quality names rally. Obviously, it\u2019s encouraging to see breadth broaden out, and
this includes the high shorted names and low quality,\u201d said Krinsky.<\/p>\n

\u201cWhen we see a surge of this magnitude, however, especially relative to a defensive group like consumer staples, it often indicates a chase for what hasn\u2019t moved and can move the most, and this often is the tail end of the move, as the numbers in the table below indicate,\u201d he said. <\/p>\n

<\/p>\n
<\/p>\n<\/figure><\/div>\n

Read:<\/strong> Why investors gamble on shares of bankrupt companies \u2014 Bed Bath & Beyond, for example<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The stock market rally of 2023 has been criticized by more than a few for being concentrated in just a few big tech companies. But now that a few other stragglers have joined of late, that\u2019s actually a cause for concern for investors, said Jonathan Krinsky, managing director and chief market technician at BTIG. He […]<\/p>\n","protected":false},"author":1,"featured_media":34540,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-34539","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nThe meme stocks are back and that could be a red flag for the stock market, says strategist | iFintechWorld<\/title>\n<meta name=\"description\" content=\"The stock market rally of 2023 has been criticized by more than a few for being concentrated in just a few big tech companies. 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