LinkedIn Corp(LNKD): Market Tries to Regroup After Yesterday’s Tech Carnage

Janet-YellenScott Redler: World market are mostly up small and US stock futures point to a slightly higher open Wednesday after news that Janet Yellen will be nominated as the next Chairman of the Federal Reserve. The news gave the market a little boost overnight, but futures are already giving back some of those pre-market gains. The circus in Washington and potential for a US default continues to dominate everyone’s attention, perhaps dulling the impact of the Yellen nomination.

Tech stocks got slammed yesterday in one feel swoop as the Nasdaq dropped 2.0%. Biotech stocks, another area of strength in the market over the past few months, also got slammed as the ETF IBB finished down 4.4%. The market can at times lull investors to sleep and then pull the run quicker than most participants can react. Over the past few days we talked about signs that tech was bending but not yet broken, and yesterday’s drop was a harsh reminder for some about the need to have high-level stops in place on momentum stocks.

Also yesterday we saw a flight to safety as the defensive sectors performed well amid the market turmoil. The Utilities ETF (XLU) was up more than 1% for most of the day, although it closed off its highs. Consumer Staples ETF (XLP) finished near the flat line. Gold (GLD) tried to bounce, but the metal is quickly losing its luster on all time-frames. Yesterday’s negative close was a very bearish sign considering the market turmoil, and today GLD is set for a lower open.

Tech stock led the decline yesterday, and zooming in further the recent IPO social media-type stocks got hit the hardest. Many commentators are running with the possibility that hedge funds are clearing room on their books for Twitter (TWTR) which is expected to IPO within the next months.

LinkedIn Corp(NYSE:LNKD) flashed a sell signal on Monday when it broke below its 50-day MA, and yesterday sellers stepped in aggressively to push the stock down another 6%. It almost filled the earnings gap from August 2nd. After a harsh two-day sell-off, use yesterday’s low of $217.74 as the new point of reference to trade against.

Yelp! (YELP) also broke below its 8- and 21-day after seeing a 7.6% retracement yesterday. The stock had a big run recently, so it’s not surprising to see a pull-back, but the harsh nature of the correction could be a concern. The next support level in YELP stands at $60-61.50.

Pandora (P) also slipped 7.8% to break below its 8- and 21-day. Investors are growing more

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