Market Insider

High fliers begin dipping as balloon deflates

Investors shift back to value stocks

What was once sizzling is now burning.

The momentum names—the high fliers that sucked in fast money—once again got hit with no regard for quality or prospects Thursday morning. After a quick dip, some of the names were recovering in morning trading but the anxiety remains.

Russell 1000 stocks in correction territory this year as of Thursday's open.

"Speculation is for sale. There's a rotation from growth to value. Too much air was in the balloon and now it's coming out. It's got more to do with value. They just got too big," said Steve Massocca of Wedbush Securities. "It's a cavalcade. Realistically, you look back at the end of the year and it was crazy. We had internet stocks trading at crazy prices. We had biotechs trading at crazy prices. Who knows what pricks the balloon, but it's been pricked in my opinion."

Stocks like Priceline, Tesla and Amazon were trading lower with the Nasdaq, but they came off their worst lows in mid-morning. The Nasdaq Biotech ETF IBB was down again, after declining 10 percent in just a week. The Russell 2000, was down more than a half percent and is down nearly four percent for the week.

Traders have been watching the casualties in the momentum space, wondering if they are the tip of the iceberg for a broader market sell off or just an overvalued group getting punished for excess.

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"I think any expectation you have that this selling rout is over is probably overblown, considering they were just going up for more than 12 months, 15 months," said one trader. "Anything related to growth in the US is under performing. It doesn't matter…The correlation is so high within the names that are going down there's really no way to say, okay there's differentiation."

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But he said there's also been a quick flight into some of the more steady sectors of the market, like telecom. AT&T, for instance, is up more than 2 percent for the week, and Johnson and Johnson up more than 3 percent in the last five sessions. Procter and Gamble is up 2.3 percent in the same period.

"High beta tech and biotech stopped going down," said Scott Redler of "I don't know if it's going to hold up. I don't think traders have conviction to buy strength now but it's the first time we've had a decent bounce."

The corrections in some names have been severe, including Tesla Motors off 20 percent from its late February high. is off nearly 14 percent from its March 6 high, and SolarCity is down 31 percent from its Feb. 26 high., a more widely held name, lost nearly 17 percent since Jan. 22.

Netflix temporarily turned higher after an initial beating along with some other names, but it is still down more than 11 percent since last week.

One encouraging sign Thursday was the double digit bounce in TriNet, the first IPO to open after King Digital's disastrous performance Wednesday. King's 15 percent first day slump was the worst for a new issue this year, but some traders wrote it off to aggressive pricing for a company described as a "one-trick" pony. King markets the "Candy Crush" game.

"The question is will it fade or hold. We're not out of the woods yet," said Redler, who follows the market's short term technicals. A positive for the market was that the S&P 500 held above 1839, the low of March 14. "You had the bios below the 50-day, the QQQs below the 50 day and the Russell," he said. But the SPY, SPDR S&P 500 ETF was not.

—By CNBC's Patti Domm. Follow her on Twitter @pattidomm.