Right at the open, the market was hit with disappointing news from the World Bank that the global economy may be weaker than it had previously predicted. Within the first 1/2 hour, the Dow stumbled more than 100 points! Commodity sectors continued to slump. Energy and miner stocks were very weak: APA -5.76%, DVN -5.58%, HES -5.17%, RTP -5.9%, X -9.18%, FCX -11.29%, ATI -12.07%. On the tech side, GOOG was down $12.74; BIDU lost $19.58; and, RIMM fell $4.67.
The Dow closed down 200.72 points; SPX slipped 28.19 points; Nasdaq dropped 61.28 points:
XME (metals and mining) led the sectors down with a 8.75% decline. GDX (gold miners) also slipped 6.9%. USO (oil) and UNG (natural gas) were both lower. OIH (oil services) lost 6.51% and XLE (energy) was down 5%. INX2 (internet) sank 4.09%. FXI (Chinese ADRs) fell 2.33%.
SPX
SPX lost 28.19 points to close at 893.04. It closed below the 900 level and below its daily MAs. Its MACD sank.
Nasdaq
Nasdaq tanked 61.28 points to close at 1766.19. It closed below its 30-day MA. Its MACD curved lower.
Both SPX and Nasdaq closed below their respective 30-day MAs. SPX closed below 900! This is a bearish sign. The new, weaker, forecast from the World Bank spooked the investors. The selling was fast and broadly based. VIX jumped back above 30. SKF and SRS (financial and real estate ultrashort ETFs, respectively) both gained more than +10% and are threatening to break above their recent, tightly-bound, trading ranges. This selling could spark a much-anticipated "correction" to the 3-month recovery rally. Below 900, 880 is the next solid support for SPX. Nasdaq is a bit stronger; it has a support at 1750. We started new downside positions today and will continue to monitor the support levels.
Good night and HappyTrading! ™
