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I have been saying for a couple of days that the market needs to take a rest, after consecutive days of gains. The new economic reports this morning gave the market all the reasons that it needs to cash out. The selling never let up today and picked up momentum into the close. Most sectors were lower. Leading the market down was the financials, as XLF gave up 16.67%! Energy-related sectors were also very weak, as crude traded below $50/barrel! The ultrashorts made huge gains: SKF +29.32%; SRS +35.73%; DUG +19.05%; EEV +17.84%; FXP +14.8%.
The Dow lost 679.95 points; SPX dropped 80.03 points; Nasdaq slumped 137.5 points:
VIX jumped to almost 70! Commodity-related sectors suffered double-percentage-digit losses: GDX (gold miners) -15.32%; OIH (oil services) -124.93%; XME (metals and mining) -15.3%; XLE (energy) -10.64; PBW (clean energy) -13.55%. Techs were down as well, with INX2 (internet) leading the way, down 8.79%. FXI (Chinese ADRs) lost 7.48%.
SPX
SPX dropped 80.03 points to close at 816.21. It closed below the 10-day MA, but, managed to stay above 800. The MACD slid lower.
Nasdaq
Nasdaq slumped 137.5 points to close at 1398.07. It also closed below its 10-day MA. The MACD was down.
In one day, the market gave back half of the gains that it made in the past 5 sessions. Closing below the 10-day MA was not a good sign. The 10-day MAs are now curving down again. SPX is closing in on that 800 level again. Nasdaq has been weaker and 1500 was easily broken. If the market does not bounce back tomorrow, we could easily see the recent lows (Nasdaq 1300; SPX 750) tested again. VIX closed just below 70, and, above its 10-day MA, although its intraday charts are getting "toppy". We'll likely see the downward momentum carried through in the morning. Then, we'll have to see if the market has any fight left. Not being able to penetrate above the 30-day MA, the charts on the market indices quickly turned bearish again!
Good night and HappyTrading! ™
