Today the DJ saw another triple digit move during the day and another 500+ range day. Since September 15th there have only been three days that have NOT had triple digit moves. Energy and Pharmaceutical was the leading sectors today while Housing, Airlines, and Gold were the weaker performers.
Dollar continues to be bought, Gold breaks its supports, Oil hits $66…Coper down 9%. The trends continue…
Lots of negative news out there and we opened down hug on a gap. The selling has been limited since the open and volume is extremely light.I am not forecasting a predication here but just reading the charts action. If we can these lows rejected with a surge of volume off the bottoms, we may have a chance to have an afternoon rally. If not the buyers continue to be a bidding strike and the odds increase we break thru the downside of the triangle consolidation.
The indexes traded in what is called an inside day. The ranges of the day was contained within the ranges of the previous day. This is a contraction of the volatility that we have been seeing.The DOW traded in a little over 200 point range, yet the day seemed to be quiet and non eventful. This coiling condition will typical lead to a powerful move in one direction or the other, many times giving a false breakout to one side first. Many of these indexes have formed triangle patterns.
A few headlines of note…During the last quarter household net worth lost nearly $2 trillion. Add in concerns about jobs it is easy to see why spending by consumers is falling quickly. Millennium Global Investments was rumored to be liquidating a hedge fund that concentrated in emerging markets. Several projections indicate that 700 hedge funds will close down by the end of the year. One reason is they are so far from their high watermarks, it is not feasible for them to continue to stay in business to earn back their losses, even if their investors are willing to stay invested with them. They are likely to spend the next few years attempting to just get back to even. Getting back to even does not earn them any performance fee’s and thus many are closing shop.
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We continue to make additions and improvements to the site each week as we work thru the initial bugs and re-testing. Thank you all for your comments, suggestions and bug findings! Keep them coming as we work diligently to move forward and bring the site up to full capacity.Starting this week Alex and I will return with selecting our favorite weekly picks. Alex and I like to select our favorite picks from among those submitted by Spikers and trade them in the week that follows. Please keep in mind that we may trade this pick in a different way from the Spiker who recommended it. Please remember that we, along with Spikers and Spectators who post their picks, are not running an advisory service – we share with you our thinking processes. You are responsible for your own picks, and you must always use good money management.In addition to a Spike pick, we may use this email to share our research into the markets with you and include additional charts in our comments.Our favorite picks will be posted as a seperate comment after all spike picks have been submitted.
For the first time in 5 weeks the markets closed positive on a weekly basis. The markets found some upside follow early in the day but gave those gains up in afternoon selling. Traders simply do not want to be long this market overnight, much less a weekend. Oil jumped back above 70 dollars after dipping below 70 yesterday. Only 3 months ago oil was making historic all time highs. It has since dropped near 50% of its value.
The major markets dropped rapidly, as volatility rose to new all time records. The VIX was over 80 during the day. As the day progressed some intraday bottoming action formed and the result was a 400+ up day for the DOW! We were down at one time over 400 points in the DOW and finished up over 400 points. This rally occured after much bad news was announced this morning. This is a sign that sellers are exhausted at these levels.
Oil has fallen over 49% from highs just a few months ago, to finish below $75. The slowdown in the economies of the world is trumping the bail out or rescue plan. The SP-500 was down 90 points and had its worst percentage day loss since 1987.