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The market opened down and continued to slide all day today. New concerns on GM and the financials kept the bear claws on the market. Financials were particularly weak: PRU -18.31%; WFC -15.94%; JPM -13.99%; PNC -14.02%. Commodity-related sectors reversed yesterday’s gains as speculation on new stimulus package from China did not materialize. Crude turned lower. On the other hand, investors seemed to be flocking to gold again, which closed above $930/ounce.
The Dow was down 281.4 points; SPX lost 30.32 points; Nasdaq fell 54.14 points:
VIX rose above 50. Most sectors were lower. USO (oil) was down 3.8%, while OIH (oil services) lost 6.04%. XLF (financials) sank 9.43%. GLD (gold) and SLV (silver) bounced after 2 weeks of selling. Techs were down also, with BTK (biotechs) losing 4.64%. FXI (Chinese ADRs) fell 5.77%.
SPX
SPX lost 30.32 points to close at 682.55. It once again closed below 700.
Nasdaq
Nasdaq dropped 54.14 points to close at 1299.59, below 1300. The daily MAs and MACD continued to go lower.
Both SPX and Nasdaq penetrated below their respective support levels (SPX 700; Nasdaq 1300). There were simply no buyers one the market today. More worries about the financial and auto companies kept the selling pressure on. We have the job reports tomorrow, which are expected to bring more bad news. The ultrashorts soared again today. SKF (ultrashort financial) jumped $34.97 to close at $242.85. It went as high as $250! This is from $150 just a week ago! FAZ (triple short financial), which traded almost +25% higher in one day, is another popular trading vehicle in this volatile market environment.
It looks like the market is bracing for more downturn from here! Financials just cannot seem to find any stops. GS is still holding up pretty well, and, could finally break down soon. We’ll be looking at puts on GS. Energy stocks are also weak, especially if oil comes back down again. Gold tested $900 and bounced higher. We are already in on GLD calls.
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