The midday action was weak but, unfortunately, the late-day action was even worse. The S&P 500 (SPX) broke to a new intraday-low in the last hour and closed firmly in negative territory. On a percentage basis, the SPX, Dow Jones Industrial Average (DJIA), Nasdaq Composite (COMP) and Russell 2000 (RUT) all lost around 2%. That leaves us with a drop of 280 points on the DJIA.

Earlier we saw that the SPDR Homebuilders (XHB) was weak and nothing changed on that front. The housing ETF posted a loss that neared 10% on the day. The Broker/Dealer Index (XBD) and Regional Bank HOLDRS (RKH) also showed big losses but those two areas have seen a few massive single-day rallies in the last two weeks. At this point it seems like big moves in the financials are just part of the game. The only pockets of strength were found in gold, oil, bonds and biotech. Though, it is worth pointing out that neither oil-related stocks nor gold-related stocks were able to rally.

In the post below I noted that the SPX was flirting with showing a rejection at resistance. The late-day selloff definitely puts the index below that line. However, I don't think that fact, in and of itself, means a whole lot. From here, the "significant" moves would be either a push back above resistance or a breakdown below the recent lows. A breakdown would be especially troubling but we can discuss that when and if it happens.

On a personal note, I will be out of the office the next couple of days. But fear not, some of my colleagues will stepping in to keep you abreast of the action. However, just don't get too comfortable with them because I will be back on Tuesday...

Have a nice evening!

Chart Courtesy of Thomson Financial

Chart Courtesy of Thomson Financial

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