Momentum on the Other Side, Too

Early weakness in biotechnology and small market capitalization issues looks to have been the "tell" that equities in general would fade a rather sizable gap higher in the futures overnight. As I write this, the S&P 500 Index has been rather soundly sold above the 1980 level, a prior which has tons of memory stretching back to last summer (2014). 

In addition, upside momentum not only remains extremely narrow, but we are seeing the other side of high beta upside movements from earlier this year.

Both GPRO and MBLY figure to be promising up-and-coming firms, attracting plenty of momentum-seeking options players since their IPOs. But momentum cuts both ways, oftentimes even more forces on the downside. 

GoPro was a failed breakout we observed in real-time over the summer. And now Mobileye may very well be following suit--On their daily charts, respectively below, note the similarities. 

Make no mistake, we traded MBLY successfully on the long side for Members in the late-spring/early-summer months. But we did so carefully and made sure not to overstay our welcome as the broad market weakened, since many momentum names tend to move in sympathy with the broad market action.