Bear Mountain Bull

For whatever reason — and a recent bounce in the dollar may have a lot to do with it — the ‘end-of-month’ stretch hasn’t been too kind to stocks this time around.

The indices continue to slide, with all except the Dow now testing or slipping below their 50-day moving averages:

Internals were ugly, with volume picking up on an obvious ‘distribution’ day. Advances/declines were 1 to 9 on the NYSE and 1 to 7 on the Nasdaq, with up/down volume worse than 1 to 10 on both exchanges. New lows exceeded new highs for the first time in a long, long time: highs/lows were 32/16 on the NYSE and 13/45 on the Nasdaq.

No green to be found:
Leaders — Telecoms (-0.15%), Drugs (-0.81%), Utilities (-0.96%), Health Care (-1.25%), Network (-1.25%), Insurance (-1.28%), Defense (-1.67%), Health Care Products (-1.80%)
Laggards — Hospitals (-6.32%), Metals (-5.58%), Gold/Silver (-5.09%), Homebuilders (-4.93%), Airlines (-4.81%), Steel (-4.38%), Oil Services (-4.28%), REITs (-4.22%)

Treasury Yields — 6-Month: .16%,  2-Year: .94%,  5-Year: 2.33%,  10-Year: 3.40%,  30-Year: 4.25%

Energy Prices — Crude oil: $77.46/barrel,  Gasoline: $1.9864/gallon,  Natural Gas: $4.289/mmBTU

US Dollar Index — 76.473

Precious Metals — Gold: $1027.30/ounce,  Silver: $16.13/ounce,  Platinum: $1303.00/ounce

BMB Note:  
The action of the past few days has been pretty ugly, with the breakdowns in individual stocks and groups too numerous to mention. And the nature of the breakdown has us believing that we’ve reached a turning point of some importance — how long it lasts and how far it goes is, of course, unknown.

Most of the indices have not only pulled back to their 50-day averages but undercut them today, with the Russell violating its early October lows. This isn’t particularly good news for the bulls. And this time around, with rather broad-based breakage, it doesn’t look like bouncing up off those 50-days will be as ‘easy’ as it was the last time around.

We should see some sort of bounce coming along sooner or later (we’re actually surprised things aren’t holding up better into the end of the month!), and we’ll be looking at that bounce pretty closely for short setups. The long side doesn’t look too appealing right now, as the pullbacks in the remaining strong areas, like the energies, are starting to look like more than just pullbacks.

Watch your step, and honor your stops.