There’s a reason why I don’t change my market view on a daily basis…
A very dull morning turned into a much more interesting afternoon, as yesterday’s late short-covering rally was obliterated. The major indices coughed all of those gains right back up, and a little extra to boot - though the Utilities are hanging tough:
| Dow Industrials |
11147.44 |
-236.77 |
-2.08% |
| S&P 500 |
1244.69 |
-29.01 |
-2.28% |
| Nasdaq Comp. |
2234.89 |
-59.55 |
-2.60% |
| Russell 2000 |
663.75 |
-18.97 |
-2.78% |
|
| NYSE Comp. |
8371.63 |
-144.16 |
-1.69% |
| Nasdaq 100 |
1819.18 |
-52.10 |
-2.78% |
| Dow Transports |
4804.57 |
-116.61 |
-2.37% |
| Dow Utilities |
518.03 |
+4.58 |
+0.89% |
|
Treasuries moved higher, and yields were lower across the board:
6-month: 1.97% 2-yr: 2.37% 5-yr: 3.08% 10-yr: 3.82% 30-yr: 4.42%.
The internals turned right back around to the negative side, but volume did lighten up a bit. Advances/declines were 1 to 2 on the NYSE and 3 to 7 on the Nasdaq, with up/down volume 1 to 4 on the NYSE and 1 to 6 on the Nasdaq. New lows have improved, but new highs have not: highs/lows were 8/160 on the NYSE and 17/177 on the Nasdaq.
The groups also turned around to nearly all red, with many of yesterday’s big ‘winners’ turning tail, and in a big way: REITs (-7.1%), brokers (-6.2%), airlines (-5.9%), banks (-5.7%), homebuilders (-5.3%), semiconductors (-4.3%), computer hardware (-3.5%), insurance (-3.5%) and retail (-3.3%). The steel stocks (+4.6%), which have been crushed of late, and the utilities (+0.9%) were the only real winners.
Energy prices were mixed following the weekly inventory report. Crude oil bounced around but gained only a penny to $136.05/barrel. Gasoline rose a couple of cents to $3.38/gallon, but natural gas slid to $12.00/mmBTU. The dollar index took a spill, back to 72.66. The PMs got back a little lost ground, with spot gold moving up to $928/ounce and silver picking up 32 cents to $18.12/ounce.
BMB Note: Whoa. If you don’t like what’s going on this market, just go out to the kitchen and grab a snack, and you can almost bet that things will have changed by the time you get back. Some pretty wild action these last few days. Yesterday’s late spike got some people all excited, but I would imagine that today’s action let most of the air out of that balloon.
You can probably guess that my view hasn’t changed. I certainly didn’t expect yesterday’s bounce to get crushed as quickly as it did, but the market rarely does what is expected. About the only thing that’s changed is that those steels/metals have bounced somewhat, and may present some opportunities for those looking to play them on the short side.
As was mentioned in the comments earlier today, Monday’s lows will be a key point to watch. Since the big drop down on the 26th of June, the indices have really been just chopping around quite a bit, not making a lot of progress in either direction. The trend is still clearly down, and the oversold condition persists. That condition will have to be worked off in one way or another, with either some movement up into the moving averages (by price) or some sideways consolidation (by time), in which case the moving averages will ‘catch up’ (or down, in this case!) with the prices. Maybe the latter is what we’re seeing for the time being. But today’s action tells me that this market is still pretty nervous, and the sellers have itchy trigger fingers. On top of that, we’ll be working right through the heart of earnings season over the next few weeks.
It should be interesting, if nothing else. Capital preservation should remain a top priority.
