It didn’t take much to get selling started this morning. Right from the outset investors sold off much of Friday’s rally. We have though seen this picture before. A big rally after a series of strong down days is sold off. Meanwhile everything from the debt ceiling to infrastructure bills to typical Washington bickering is also consuming investors. Add that to the reports this week which include the important September jobs numbers on Friday. Then throw in the weekend Facebook interview which today is sending big and small tech stocks lower and the day is a perfect storm of “bad news”.
Overall the market is actually handling the bad news well and continues to stay around the 100 day moving average. However the technical indicators for both the SPX and NASDAQ are flashing a number of further warnings and the 100 and 200 day moving averages are no longer rising. Next to the fall of stocks last October to the start of November 2020, this is now the worst pullback for stocks. More downside should be expected which means in spikes higher, buying $SPY put options and/or the SQQQ or SDOW may be trades worth considering.
Here are some afternoon stats and comments on where I think the indexes may be heading.
The VIX Index is higher at $24 but not as high as investors would expect.
Volume is about average but that could increase after 3:00 or at 3:30.
Afternoon Stats And Outlook
New York – S&P
NASDAQ
TSX Composite Index – Canadian Stock Market Outlook
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