It was almost as if the market hadn’t opened for trading on Monday. It was lackluster out of the gate. The only major equity index that showed life was the NASDAQ, as momentum stocks have gotten to the point where they’re attracting an odd mix of value investors and fast traders. 

• Google (GOOG)
• Facebook (FB)
• Amazon (AMZN)

Still, there were more 52-week lows than highs on the NASDAQ, although the up volume was 50% higher than the down volume. The point is that companies that have fallen out of bed on bad news will continue to get punished, even when they’re obviously oversold.

Pairs Trade

Lots of professional investors use a technique of pairing longs with shorts (in the same space), and yesterday looked like a classic part-trading. The meatless wonder Beyond Meat (BYND) rocketed to a fresh all-time high, while meat producers got hit hard, in part to concerns over supply and higher prices for crops.

Meat Stocks:

• Sanderson Farms (SAFM): -7.45%
• Pilgrim’s Pride (PPC): -3.84%
• Tyson Foods (TSN): -4.13%

Meatless Stock:

• Beyond Meat (BYND): +12.20%

Of course, BYND is also the best performing initial public offering (IPO) of 2019. However, it’s not the only winner. Recent offerings continued to move higher, including:

• CrowdStrike Holdings (CRWD): +9.12%
• Fiverr Int’l (FVRR): +9.18%
• Luckin Coffee (LK): +10.09%

The Squeeze

Another Beyond Meat connection is its a heavily shorted stock. Shorts have attacked the stock, and their losses are quickly mounting toward $1.0 billion dollars. Tesla (TSLA) shorts are feeling the pain as well.

And of course, biotech names popped after another deal involving a cash-rich pipeline-thin pharmaceutical takeover.

Portfolio Approach