There Was A Big Rotation In The Market On Wednesday: PreMarket Prep Recap For Feb. 6, 2020

The market is back to all-time highs as the coronavirus continues to spread and China agreed to rollback some tariffs on U.S. goods.

But those headlines are not what caught our traders’ attention on Thursday’s PreMarket Prep. Instead, it was a rotation from growth stocks to value stocks.

“We saw an extreme move from growth to value yesterday,” said co-host Dennis Dick. “On a day where the Dow was up over 400 points, you saw stocks like Shopify going in the red yesterday, you saw stocks like Square going in the red yesterday. It was a very weak day for growth. I think that continues today. So if you’re seeing rallies in your growth names, I think those things are selling opportunities.”

Dennis specifically highlighted the big trend reversal days in IBM IBM and salesforce.com, inc. CRM.

“A lot of times, the rotation just trumps all. So you can have a [earnings] beat, [revenue] beat, and a [guidance] raise, if the rotation is going the other way, the stock can actually go down. Sentiment will trump all. Sentiment turned yesterday, so that’s telling me that those things are now short-term sells. So now I look for strength in those high P/E multiples to get short.”

For the full discussion on the market’s rotation from growth to value yesterday click here.

Other Stocks Discussed On The Show

Stocks also discussed include:

• Twitter IncTWTR (click here)
• Bristol-Myer Squibb Co BMY (click here)
• Tesla Motors, Inc TSLA (click here)
• Twilio Inc TWLO (click here)
• Peloton Interactive Inc PTON (click here)
• Qualcomm, Inc QCOM (click here)
• iRobot Corporation IRBT (click here)

Featured Guest

Anne-Marie Baiynd, Thetradingbook.com

Anne-Marie Baiynd is a trader, author and financial analyst best known for her book, "The Trading Book Course: A Practical Guide to Profiting with Technical Analysis." Baiynd has a background as a neuroscience researcher.

Anne-Marie’s full interview can be viewed at 15:07 in the video below or by clicking here.

Watch the full show below.

PreMarket Prep is a daily trading show hosted by prop trader Dennis Dick and former floor trader Joel Elconin. You can watch PreMarket Prep live every day from 8-9 a.m. ET here. The replay can be found on Benzinga's YouTube channel, and the podcast is on iTunes, Google Play, Soundcloud, Stitcher and Tunein.

Meet the Hosts:

Dennis Dick
Joel Elconin

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Disclaimer: All of the information, material, and/or content contained in this program is for informational purposes only. Investing in stocks, options, and futures is risky and not suitable for all investors. Please consult your own independent financial adviser before making any investment decisions.