John Carter Analysis: DIA, QQQ, IWM, XLE, Social Media, Momentum

In today's update, we start by highlighting the divergences in the indexes. The Dow has been the strongest, but started breaking down through the 21-day moving average yesterday. The Nasdaq has held up decently, but the real story is the Russell 2000 small cap index. It has led the way both to the downside and upside in previous moves, and right now it suggests that we're looking at further downside in the broader markets. The XLE is breaking down, and we advocate against trying to catch a bottom. Our focus is on names that are defying the odds and heading higher in spite of market weakness, namely FB, GPRO, and possibly the IBB biotech. KO has been consistently strong and our call position is holding up. TSLA looks like it has more downside momentum, along with BABA which seems like it's setting up for a post-IPO sell off the way FB did in the months after it came public.