Bear Mountain Bull

Liquidation was the name of the game today, as the market picked up right where it left off yesterday afternoon, and just continued selling everything in sight.

Ugly stuff. Just very ugly stuff.

Treasuries were higher, yields were lower:
6-month: 1.49%    2-yr: 1.52%    5-yr: 2.55%    10-yr: 3.60%    30-yr: 4.06%.

Internals were pretty gross, as you might expect, and volume was higher, though not up to the levels we saw in the panics a week or two ago – I don’t know if that’s good or bad. Advances/declines were 1 to 6 on the NYSE and 1 to 7 on the Nasdaq, with up/down volume 1 to 19 on the NYSE and 1 to 7 on the Nadsaq. New lows picked up, with highs/lows at 4/471 on the NYSE and 2/307 on the Nasdaq.

In the groups, there were none even close to being green, and it was the commodity areas that were crushed again: gold and silver stocks (-16.2%), metals and mining (-15.1%), oil services (-13.1%), HMOs (-10.9%), paper (-10.6%), natural gas (-10.2%), oil stocks (-10.1%), steel (-9.1%) and disk drives (-8.5%).

Energy prices were lower. Crude got smacked again, falling to $66.95/barrel, gasoline fell a dime to $1.57/gallon, and natural gas lost six cents, to $6.78/mmBTU. The dollar short positions are still unwinding, causing the dollar to rally against nearly all currencies (except the Yen), and driving the dollar index up to 85.58. That helped push the precious metals lower. Gold was down down big, to new relative lows at $721/ounce, and silver dropped to $9.37/ounce.

BMB Note:   Well, we got our ‘follow through day’ last week, but since then, there hasn’t been much follow-through to the follow-through, especially these last couple of days. Not to mention, the action continues to be wild and wacky – did you see the Dow jump 200+ points in about 3 minutes, right around 15 minutes before the close?

Sellers apparently are still lurking around every corner, and until this liquidation lightens up, it doesn’t look like this market is going to even get much of a chance to bounce, let alone stage a meaningful rally. At this point, it might be only a question of whether the recent lows are going to hold or not.

This morning’s gap down took me out of the other of my very small index longs that I took as a probing position, so now I’m content to just sit back and see what happens from here. It looks like this market is thinking pretty seriously about testing the recent lows one more time. And if those lows do not hold, I don’t want to be anywhere near this thing, and you probably shouldn’t want to be either.

Wasn’t it Carl Swenlin who said they projected a nine-month cycle low on October 22nd? Let’s hope he’s right…