Bounce? What bounce? Did you see a bounce? I must’ve blinked…
The hope for a bounce just turned into more ugliness today. The indices tried to fake it for a while, suffering from a morning dip, and then working their way back up to near the flat line early in the afternoon - but from there things just fell off the cliff. On top of that, some of the leading areas of the market were just completely destroyed.
Pretty ugly stuff, with the Transports getting smashed again:
| Dow Industrials |
11215.51 |
-166.75 |
-1.46% |
| S&P 500 |
1261.52 |
-23.39 |
-1.82% |
| Nasdaq Comp. |
2251.46 |
-53.51 |
-2.32% |
| Russell 2000 |
672.34 |
-19.25 |
-2.78% |
|
| NYSE Comp. |
8465.51 |
-175.77 |
-2.03% |
| Nasdaq 100 |
1816.15 |
-46.56 |
-2.50% |
| Dow Transports |
4653.13 |
-208.92 |
-4.30% |
| Dow Utilities |
518.52 |
-3.75 |
-0.72% |
|
Treasuries were slightly higher, but it wasn’t much of a ‘rally’ considering the weakness in stocks:
6-month: 2.04% 2-yr: 2.58% 5-yr: 3.30% 10-yr: 3.97% 30-yr: 4.51%.
Internals were clearly negative, but volume backed off slightly from yesterday’s levels. Advances/declines were 5 to 14 on both exchanges, with up/down volume 1 to 4 on each. New highs/lows were still pretty ugly, but new lows actually backed off a bit: highs/lows were 45/348 on the NYSE and 20/374 on the Nasdaq.
The groups were split much of the day, but only three were left in the green at the end: HMOs (+1.3%), disk drives (+0.4%) and drug stocks (+0.3%). But there were some pretty staggering numbers on the red side, where the metals - some of the leading stocks in the market - were ripped apart: steel stocks fell 13.0%, and metals and mining stocks were down 11.5%. And those weren’t the only sizable losses: airlines (-6.7%), homebuilders (-5.2%), transportation (-4.5%), commodities (-4.5%), oil services (-4.4%), chemicals (-4.2%), gold and silver stocks (-3.6%), oil stocks (-3.2%) and natural gas stocks (-2.8%).
Energy prices were mixed. Crude touched yet another new record above $144, finishing the day up almost three bucks at $143.57/barrel. Gasoline was also higher, at $3.55/gallon, but natural gas slipped 12 cents to $13.39/mmBTU. The dollar index fell back to its lowest level in weeks, at 72.04. The precious metals were higher - gold added five bucks to $944/ounce, while silver added a quarter to $18.34/ounce.
BMB Note: Hmm. Even I thought we might be setting up a for a little bounce after yesterday. Nothing doing. But that’s why I don’t try to ‘guess’ what the market is going to do in my trading.
Today’s action is obviously not good news for the bulls. Probably the most disturbing development is the total destruction that took place in the steels, metals and coal stocks. Those are some of the last areas, along with the energies, that had still been holding up as the rest of the market tumbled. Today those metals and coals were totally shredded. So now they’re done too, at least for a time. I’m not sure there’s much left to turn to. Of course, if you’ve been careful, you’re not looking to go long here anyway, so no real harm done. But it doesn’t bode well for the overall market when the few leaders that remain are imploding.
Yes, we’re still massively oversold, and yes, we’re due for a bounce. But everybody and their mother has been waiting for it, calling for it, and some have even been trying to play it, even before it happens. I suppose it’s possible that we don’t even get one, and that we roll right down into some climactic move that puts in a near-term bottom.
I’ll stay where I am - on the short side of stocks, with the recent gains in the precious metals helping me out. It’s been working for a while now - and I’ll change when the market decides to. That ‘decision’ looks like it’s still TBD.