Market Wrap
The market never had a chance.
It started yesterday after the close with bad news from AA and BAC, then continued today with a poor ADP jobs report and a bad forecast from Intel. Pile that on top of already overbought conditions, and you get what we got today — a mess.
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Pretty quiet in the Treasuries again:
6-month: 0.28% 2-yr: 0.80% 5-yr: 1.66% 10-yr: 2.49% 30-yr: 3.06%.
Internals turned negative, with volume lighter on the NYSE but heavier on the Nasdaq. Advances/declines were 1 to 4 on the NYSE and 5 to 14 on the Nasdaq, with up/down volume 1 to 8 on the NYSE and 1 to 7 on the Nasdaq. The few new highs we’d been seeing disappeared — highs/lows were 1/10 on the NYSE and 8/14 on the Nasdaq.
The groups were big and red. Worst hit were the gold/silver stocks (-8.4%), metals and mining (-7.3%), paper (-6.9%), brokers (-5.7%), banks (-5.3%), oil services (-5.0%), steel stocks (-4.9%) and semiconductors (-4.9%).
Energy prices got smashed after the weekly inventory report. Crude oil gave up a lot of its recent gains, dropping more than 5 bucks to $42.63/barrel, gasoline tumbled more than a dime to $1.08/gallon, and natural gas slipped to $5.87/mmBTU. The dollar index fell to 82.27. Gold dropped to $837/ounce and silver to $10.93/ounce.
BMB Note: The BMWife put it best: “Today was one of those days when everybody sold everything.” That pretty much sums it up.
Just another example of why you can afford to be patient where this market is concerned. It’s not going to let you get comfortable.
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In my humble opinion, today’s action was healthy if you consider the extreme overbought levels and the run up from the low of Nov 21, 2008. For example, Shipping Index went up 38.53% since the low and dropped -4.98% today, Semis- Memory Chips ran up 106% and dropped -3.27% today, Long Term Care Facilities ran up 82% and dropped -2.75%, Silver ran up 71% and dropped -8.51%. And some of my indicators are already halfway from the top of the range and the middle in just 1 day, giving a impression of a churning, not a drop. Tomorrow’s action, volume and if the indices hold the 20ma and 50ma and bounce up or drop below the ma’s will give us a clue what Mr Market is doing…
Again, its just my humble opinion.
Comment by hector — 1/7/2009 @ 8:30 pm