Stocks Clipped; Maybe Bad News isn't So Good After All

This was a bit of a shakeout. There was no late rally to save the day, nor was there - oddly enough - any talk of tapering by Fed officials.

No, today was just one of those days that the market had a good look in the mirror and didn't like what it was seeing. Smart money is already out of the equity markets, but the dumb money will probably be looking to buy the dip, as has been the modus operandi for the past four-years.

It was mentioned here yesterday that this appeared to be an opportune time to go to cash or go short. That call could not have been more prescient as stocks fell out of bed and continued to roll on the floor, writhing in pain the rest of the session, having the worst two days since mid-April, which, considering where the market has traversed since then, could be only the beginning of a long, deep decline.

Marketeers will blame today's selloff on poor ADP numbers and maybe the ISM Services index, both coming in with disappointing reports, but data has been trending poorly for the past two months (some say four years) and the market is just now beginning to wake up to the reality of the depression being felt across the country and around the world. Business activity has slowed in almost every sector or has not grown at any kind of solid, sustained pace for most of the past six months, all the while equities were going through the roof.

If this is the beginning of a serious correction or the end of the bull and the beginning of a bear market, today and yesterday's action was just a warm-up.

Wall Street may be blind to poor economic data for a long time, but when the selling starts and there's real money to be lost, the traders all act like herd animals, rushing for the quickest way out.

Even though volume was not magnificent, the declines speak for themselves. The Dow Jones Industrials took a 1 1/2 percent hit today and are now three percent from the top, made on May 28.

The A-D line continues to deteriorate, with today's coming in a 4-1 for the losers; new lows exceeded new highs for the first time in months. Keep an eye on that metric for more clues to where this is going.

A June swoon or a hungry bear?

Dow 14,960.59, -216.95 (1.43%)
NASDAQ 3,401.48, -43.78 (1.27%)
S&P 500 1,608.90, -22.48 (1.38%)
NYSE Composite 9,189.21, -130.88 (1.40%)
NASDAQ Volume 1,728,689,625
NYSE Volume 3,620,423,750
Combined NYSE & NASDAQ Advance - Decline: 1369-5151
Combined NYSE & NASDAQ New highs - New lows: 69-108
WTI crude oil: 93.74, +0.43
Gold: 1,398.50, +1.30
Silver: 22.47, +0.063