Today was another slow day for news. The biggest story was the across-the-board weakness in the S&P 500
which closed below the psychologically important 900 level at 893, down 3.05% for the day.
Gold and crude oil led the commodities stocks lower; some of the biggest losers were Transocean
(CVX), Randgold Resources
(GOLD), and Agnico Eagle Mines
The banks were big losers as well: Bank of America
(BAC) was down 9%, JPMorgan
(JPM) was down 5%, and Wells Fargo
(WFC) was off 6%.
Tech also sold off, including Baidu
(AMZN), and Research in Motion
On today’s Buzz and Banter, Professor Jeff Cooper gave his thoughts on the S&P’s change of character:
“The Weekly Swing chart on the S&P turned down last week for only the third time since the March low.
“The index scored its first down week in 5 weeks despite the late week snapper after last Monday’s 90% down day.
“We are seeing a change in behavior from the prior two weekly turndowns: the S&P is following through to the downside after the initial reflex rally late last week.
“180 degrees down in price from the 950ish high is 888 which is a significant level as it is also 720 degrees up from the 666 March low.”
Click to enlarge
The S&P is now near the important 888 level. If it’s going to get there, the bears will need some help from the Existing Home Sales numbers, out tomorrow at 10:00 a.m. The current consensus is 4.82 million; the whisper number, however, is closer to 4.85 million.
Today on the Buzz and Banter, Professor James Kostohryz gave a preview of this week's economic data: “In terms of fundamentals, tomorrow’s corporate and housing data could give us a bit of a breather. On Wednesday, durable goods could be a very important data point. However, unfortunately, I don’t think that this number can be traded in advance. I feel that the odds of an upside surprise are better than 50%.
"However, the margin of error on this one is too high, and given the risk asymmetry described above, I think that the most prudent thing to do is sit that one out. I will probably go into that number with only my core position. However, in the very short term, I have built up some significant trading leverage as I feel that we may recover somewhat the remainder of today and tomorrow from the 897 level on the S&P.”
Heads up on Turnaround Tuesday. Have a great night, Minyans!
No positions in stocks mentioned.
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