The midday check of the action showed the Dow Jones Industrial Average (DJIA) had bounced back from a 250-point loss. For the most part, a good portion of the bounce held through the afternoon. However, a bout of late-day selling caused the bounce to unravel and we end with the Dow near its worst levels of the session.
Meanwhile, the sector view went from mixed and choppy to decidedly down. The iShares Treasury Bond (TLT) squeaked out a small gain while the rest of the pack was lower. The Broker/Dealer Index (XBD) finished as the weakest group as it dropped more than 6%. The Regional Bank HOLDRS (RKH), Cyclical Index (CYC), Amex Gold Bugs Index (HUI) and Oil & Gas Index (XOI) were also relatively weak.
While today was relatively disappointing, it could have been worse. Earlier I noted that the broad market indices were still holding near their recent lows and that is still the case. The concern, though, goes back to what I discussed on Thursday and the evaporation of rallies.
The immediate bounce off those lows told us that buyers were willing to step in there and this reinforced the mental significance of those levels. Between the losses below, and what was lost Friday, Thursday's 550-point gain for the Dow has been erased. This constant failure/reversal of rallies is not going to help confidence. With that in mind, we head into tomorrow with the indices precariously perched on support. Tomorrow should be interesting...
Chart Courtesy of Thomson Financial
| Index |
Index Value |
Point Change |
Percent Change |
| S&P 500 (SPX) |
850.8 |
-22.5 points |
-2.58 percent |
| Dow Jones Industrial Average (DJIA) |
8273.6 |
-224 points |
-2.63 percent |
| Nasdaq Composite (COMP) |
1482.1 |
-34.8 points |
-2.29 percent |
| Russell 2000 (RUT) |
451.3 |
-5.2 points |
-1.14 percent |
| CBOE Market Volatility Index (VIX) |
69.15 |
2.84 points |
4.3 percent |
Charts Courtesy of Thomson Financial
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