If you're looking for direction in this market, you're not alone. Following a week in which triple-digit moves on the Dow Jones Industrials were the norm, with the other indices more or less in concert, investors are scratching their heads, backs, bottoms and anything else nearby in almost total confusion.
The Dow was down more than 100 points three days, culminating in the biggest move of the week on Friday (-249.85), and up nearly 200 points on just one day - Thursday - after the government announced the preliminary reading on 3rd quarter GDP at a positive 3.5%. Only Tuesday was tame, with the index up a mere 14 points.
For the week, the Dow lost 260 points, one of the larger weekly declines of the year, but shallow by percentage comparison, at 2.8%. The NASDAQ gave back 109 points, and was the worst performer on a percentage basis, with a loss of 5% for the five days just ended. 43 points were disgorged from the S&P 500, a 4.5% decline. The NYSE Composite was down 327 points, nearly matching the NASDAQ with a 4.7% drop.
The main catalyst for the wild swings in the market seem to have been two-fold. First, the date, October 30, marking the last trading day of the month, also was the final reporting day for many mutual funds, so profits were being locked in with wholesale selling of weak hands. Second, the dollar was very strong against the Euro in particular, and whenever that set-up has been present, stocks have been whacked. The entire rally from March through today has been fueled by a declining dollar, making commodities and US equities more attractive.
Dow 9,712.73, -249.85 (2.51%)
Nasdaq 2,045.11, -52.44 (2.50%)
S&P 500 1,036.18, -29.93 (2.81%)
NYSE Composite 6,739.45, -215.86 (3.10%)
Losers overwhelmed gainers, 5359-1162 (nearly 5-1), and underscoring the lack of direction, new lows scored over new lows by the narrow margin of 3, 89-86. Volume was again above the norm, though reading too much into the volume scenario may be risky. Both of the big down days - Wednesday and Friday - saw increased volume, though it bears notice that Wednesday was the day before the much-feared 3rd quarter GDP report, and Friday, as mentioned above, was the end of the year for many funds. Thus, these outliers may have overtly influenced the general direction and volume of trade.
NYSE Volume 7,883,697,500
Nasdaq Volume 2,512,938,000
As expected with the strong dollar scenario, commodity prices could not be maintained. Oil was slammed the hardest, it being the de facto favorite of the speculative groups, losing $2.87, to $77.00. Gold dipped $6.70, to finish the week at $1,040.40, while silver shed 40 cents, to close at $16.26.
Whether or not the closing figures are some kind of pivot point upon which one can trade one way or another is a matter for the chartists. The NASDAQ made an intra-day double-bottom at 1040, last touched on October 2, at the start of a brisk rally. The Dow is sitting right on its 50-day moving average, while the S&P has crossed over its 50-day MA three times in the last three sessions, is above support at 1019, but broke below the previous support line at 1039 on Friday.
It's a pivot point all right, the question is still which way?
The answer to that is probably more psychological than technical. Traditionally, a strong dollar was good for stocks, though in this situation, the liquidity trade is working the other way. At some point, the leadership of banks, materials and technology will have to give way, though technology will probably still stand up better through whatever short term condition is presented. Longer term, the dollar will decline, but as the Fed hints at raising rates - and then actually does - a change in attitude must attend if stocks are to continue to advance.
There is almost certainly going to be a period of pause, and we are likely in the middle of that right now. Another 4-7% decline on the major indices should be forthcoming while the market sorts out what to do with the absence of easy money. If there is no solution, stocks will continue to decline, at least until people think they're really cheap enough.
Much has been made of the huge amount of cash still sitting out the dance, and this may present those wallflowers with ample opportunity to put some of their money to work. Not a wholesale dive in, but at least sticking a toe in the water would suffice. That could spark another rally before the end of they year, but there's also a very good chance that the highs for 2009 have already been met.
Therefore, heading into next week, pay particular attention to the dollar, financials and basic materials or commodities, and be on the lookout for a divergence from the established trend. If the dollar is higher and stocks do not sell off, look for new leadership in the other sectors. If the dollar trades lower, expect the same trade, which does nobody any good, since we've already determined that it is flawed. A weak dollar cannot support a true recovery.
Best case scenario is another drift lower, or, maybe a swift downdraft for another week before volatility settles down. It doesn't mean that one should stop trading, only that one needs to buy protection and remain nimble.
Friday, October 30, 2009
Thursday, October 29, 2009
Positive GDP Growth Sends Stocks Soaring
All of the selling over the past three to four sessions based on fears that 3rd quarter GDP would come in lower than expected turned out to be dead wrong. even the high-and-mighty analysts at Goldman Sachs, who just yesterday downgraded their estimate to 2.7% growth, were well short of the true number, which came in at 3.5%, topping all but the most-optimistic estimates and sending shorts scrambling to cover and other investors cheering the solid results.
It was the first positive GDP report since in a year and the best quarter since the third quarter of 2007, when the recession actually began (though economists will tell you it was the 4th quarter of 2008, the slowdown was much earlier and was being felt in manufacturing especially. The result was the best one-day gain on the Dow Jones Industrial Average since July 23.
Perhaps more important than the nearly-200-point gain on the Dow were the levels at which the NASDAQ and S&P 500 averages closed, ahead of their 50-day moving averages, which were penetrated to the downside on Wednesday. With a solid base at those levels now intact (conceding that it must hold tomorrow), the major indices are aligned for another assault at the highs of the year, erasing all the bad karma from the meltdown of 2008.
On an even more fascinating historic note, the past two days marked the 80th anniversary of Black Monday and Black Tuesday, two of the worst performing days in the history of the stock market. On Monday, October 28, 1929, stocks fell 38.33 points (-12.82%). The Dow Jones Industrials closed that day at 260.64. The next day, Tuesday, October 29, 1929, the Industrial Average fell an additional 30.57 points (-11.73), closing at 230.07. We have come a long, long way since then, but it's intriguing that none of the financial press seemed willing to even mention the anniversary. To say that stock traders and those who report on such activity are superstitious may be putting it lightly.
Dow 9,962.58, +199.89 (2.05%)
NASDAQ 2,097.55, +37.94 (1.84%)
S&P 500 1,066.11, +23.48 (2.25%)
NYSE Composite 6,955.31, +189.62 (2.80%)
Today, thankfully, was nothing like those days of 80 years past. On this day, advancing issues solidly trounced decliners, 4934-1555. New highs rebounded to retake the upper position, beating new lows narrowly, 74-69, indicating that while we may have made a turn, the jury is still out. Stocks could actually vacillate over the next week or so, though most indications are that the rally is back on, using the solid GDP figure as a backstop.
Volume was not spectacular, but solid, in line with other days of the past two weeks.
NYSE Volume 6,477,558,500
NASDAQ Volume 2,251,900,500
What remains to be seen is where leadership is going to emerge. The 7-month-long rally has been fueled by banking, energy, technology and basic materials, correlating in inverse fashion with the dollar (which has been down precipitously and was priced lower today). At some point, the inverse correlation must come to an end, though the transition is not going to be smooth or particularly painless. Sooner or later, the regimen of easy money policy by the Fed is going to change, though that moment is likely 4-6 months in the future. For the time being, traders will look for new star stocks and other positive notes on the economy. With the holidays quickly approaching, consumer discretionary and retail stocks should receive much of the focus.
It's interesting to note the cross-over play with technology in companies such as Apple (AAPL) and Amazon (AMZN), which will likely benefit from strong sales of their leading products, the iPhone and Kindle, respectively.
Commodities also rallied as the dollar declined, snapping a week of dollar increases. Oil was up sharply, gaining $2.41, to $79.87. Gold was up $16.60, to $1,047.10. Silver gained 42 cents, to $16.66.
With no huge earnings news scheduled for Friday morning, investors will have to contend with readings on personal income and spending at 8:30 am, and a Michigan Sentiment revision at 10:00 am. That will probably be just fine with most. The market has covered a good deal of ground over the past four sessions and traders have to be just a little weary as the week draws to a close.
It was the first positive GDP report since in a year and the best quarter since the third quarter of 2007, when the recession actually began (though economists will tell you it was the 4th quarter of 2008, the slowdown was much earlier and was being felt in manufacturing especially. The result was the best one-day gain on the Dow Jones Industrial Average since July 23.
Perhaps more important than the nearly-200-point gain on the Dow were the levels at which the NASDAQ and S&P 500 averages closed, ahead of their 50-day moving averages, which were penetrated to the downside on Wednesday. With a solid base at those levels now intact (conceding that it must hold tomorrow), the major indices are aligned for another assault at the highs of the year, erasing all the bad karma from the meltdown of 2008.
On an even more fascinating historic note, the past two days marked the 80th anniversary of Black Monday and Black Tuesday, two of the worst performing days in the history of the stock market. On Monday, October 28, 1929, stocks fell 38.33 points (-12.82%). The Dow Jones Industrials closed that day at 260.64. The next day, Tuesday, October 29, 1929, the Industrial Average fell an additional 30.57 points (-11.73), closing at 230.07. We have come a long, long way since then, but it's intriguing that none of the financial press seemed willing to even mention the anniversary. To say that stock traders and those who report on such activity are superstitious may be putting it lightly.
Dow 9,962.58, +199.89 (2.05%)
NASDAQ 2,097.55, +37.94 (1.84%)
S&P 500 1,066.11, +23.48 (2.25%)
NYSE Composite 6,955.31, +189.62 (2.80%)
Today, thankfully, was nothing like those days of 80 years past. On this day, advancing issues solidly trounced decliners, 4934-1555. New highs rebounded to retake the upper position, beating new lows narrowly, 74-69, indicating that while we may have made a turn, the jury is still out. Stocks could actually vacillate over the next week or so, though most indications are that the rally is back on, using the solid GDP figure as a backstop.
Volume was not spectacular, but solid, in line with other days of the past two weeks.
NYSE Volume 6,477,558,500
NASDAQ Volume 2,251,900,500
What remains to be seen is where leadership is going to emerge. The 7-month-long rally has been fueled by banking, energy, technology and basic materials, correlating in inverse fashion with the dollar (which has been down precipitously and was priced lower today). At some point, the inverse correlation must come to an end, though the transition is not going to be smooth or particularly painless. Sooner or later, the regimen of easy money policy by the Fed is going to change, though that moment is likely 4-6 months in the future. For the time being, traders will look for new star stocks and other positive notes on the economy. With the holidays quickly approaching, consumer discretionary and retail stocks should receive much of the focus.
It's interesting to note the cross-over play with technology in companies such as Apple (AAPL) and Amazon (AMZN), which will likely benefit from strong sales of their leading products, the iPhone and Kindle, respectively.
Commodities also rallied as the dollar declined, snapping a week of dollar increases. Oil was up sharply, gaining $2.41, to $79.87. Gold was up $16.60, to $1,047.10. Silver gained 42 cents, to $16.66.
With no huge earnings news scheduled for Friday morning, investors will have to contend with readings on personal income and spending at 8:30 am, and a Michigan Sentiment revision at 10:00 am. That will probably be just fine with most. The market has covered a good deal of ground over the past four sessions and traders have to be just a little weary as the week draws to a close.
Wednesday, October 28, 2009
Fear of the Unknown GDP
There were some good reasons to get out of the market on Wednesday, but one of them was probably not fear of the nation's 3rd quarter GDP coming in at a level lower than expectations.
In the first case, nobody is really sure what the expectations really are, since there are estimates all over the place from a variety of sources, most of them in the 2.5-3.2% range of growth and that's likely where it's going to land. Early in the day, Goldman Sachs lowered their forecast for tomorrow's release, from 3.0% to 2.7%. It will be interesting to see whether Goldman's one-day crystal ball is effective or whether it was some kind of sly ruse to get people to sell on supposed weakness.
In any case, a positive number will no doubt be reported by the government, and that number will be revised twice before being finalized, but it is a very important figure. If the number turns out to be better-than-expected, the market will almost certainly gap up, making everybody who sold in order to get out of the way of the number - released at 8:30 am - look silly. Of course, if it's weak, those same people will appear brilliant.
It's a crap shoot, one way or the other.
In any case, stocks took severe declines into the close on Wednesday, fear of the GDP being the only plausible reason. Earnings for most stocks have been very good this quarter, but the market continues to sell off. A solid GDP reading on Thursday could change all of that. Durable goods orders came in at 1.0%, about what was expected, so that figure was a non-event this morning.
Dow 9,762.69, -119.48 (1.21%)
NASDAQ 2,059.61, -56.48 (2.67%)
S&P 500 1,042.63, -20.78 (1.95%)
NYSE Composite 6,765.69, -166.35 (2.40%)
Some very interesting data came out today from the simplest of simple indicators. Declining issues blasted advancers, 5676-891, a better than 6-1 ratio, and new lows actually outdid new highs, by a score of 94-73. Both of these numbers are more indicative of a market bottom rather than the continuation of a week-long decline, but there are other indicators and the overhang of tomorrow's GDP number with which to deal. Both the S&P and NASDAQ broke through their 50-day moving averages today, key support levels which normally should not be violated.
Volume was elevated today, indicating, again, more of a flushing action than middle-move reactions.
NYSE Volume 7,564,809,500
NASDAQ Volume 2,794,432,000
Of course, much of the selling was the result of a stronger dollar, which is traditionally good for stocks, but, now that so many US corporations do business around the globe, a stronger greenback may not be an advantage in terms of repatriating profits and denominating them in US dollars. Then again, costs will be lowered for labor in foreign countries, so, in a way, it's a wash for many companies.
What it's not a wash for is commodities. With the dollar up nicely again today, oil was lower by $2.09, to $77.46. Gold fell another $4.90, to $1,030.50, and silver dropped 30 cents, to $16.24. If the dollar move continues - and there are plenty of reasons why it should - over the short term (longer term, it's weaker), expect commodities and commodity-related companies and products to price lower. Once again, the ugly head of the severe contraction in credit is inducing a degree of deflation with which nobody wants to deal. However, it's there and it doesn't have to be a game-ender. Lower prices, after all, are good for consumers.
In any case, tomorrow's release of 3rd quarter GDP will be either a boon or a bane for the markets. I'll take a flyer and make a call, especially since Goldman Sachs decided to change their mind so close to the release. At least mine won't move any markets, unless you're foolish enough to trade after hours on my recommendation.
My call is 3rd quarter GDP comes in at +3.2%.
In the first case, nobody is really sure what the expectations really are, since there are estimates all over the place from a variety of sources, most of them in the 2.5-3.2% range of growth and that's likely where it's going to land. Early in the day, Goldman Sachs lowered their forecast for tomorrow's release, from 3.0% to 2.7%. It will be interesting to see whether Goldman's one-day crystal ball is effective or whether it was some kind of sly ruse to get people to sell on supposed weakness.
In any case, a positive number will no doubt be reported by the government, and that number will be revised twice before being finalized, but it is a very important figure. If the number turns out to be better-than-expected, the market will almost certainly gap up, making everybody who sold in order to get out of the way of the number - released at 8:30 am - look silly. Of course, if it's weak, those same people will appear brilliant.
It's a crap shoot, one way or the other.
In any case, stocks took severe declines into the close on Wednesday, fear of the GDP being the only plausible reason. Earnings for most stocks have been very good this quarter, but the market continues to sell off. A solid GDP reading on Thursday could change all of that. Durable goods orders came in at 1.0%, about what was expected, so that figure was a non-event this morning.
Dow 9,762.69, -119.48 (1.21%)
NASDAQ 2,059.61, -56.48 (2.67%)
S&P 500 1,042.63, -20.78 (1.95%)
NYSE Composite 6,765.69, -166.35 (2.40%)
Some very interesting data came out today from the simplest of simple indicators. Declining issues blasted advancers, 5676-891, a better than 6-1 ratio, and new lows actually outdid new highs, by a score of 94-73. Both of these numbers are more indicative of a market bottom rather than the continuation of a week-long decline, but there are other indicators and the overhang of tomorrow's GDP number with which to deal. Both the S&P and NASDAQ broke through their 50-day moving averages today, key support levels which normally should not be violated.
Volume was elevated today, indicating, again, more of a flushing action than middle-move reactions.
NYSE Volume 7,564,809,500
NASDAQ Volume 2,794,432,000
Of course, much of the selling was the result of a stronger dollar, which is traditionally good for stocks, but, now that so many US corporations do business around the globe, a stronger greenback may not be an advantage in terms of repatriating profits and denominating them in US dollars. Then again, costs will be lowered for labor in foreign countries, so, in a way, it's a wash for many companies.
What it's not a wash for is commodities. With the dollar up nicely again today, oil was lower by $2.09, to $77.46. Gold fell another $4.90, to $1,030.50, and silver dropped 30 cents, to $16.24. If the dollar move continues - and there are plenty of reasons why it should - over the short term (longer term, it's weaker), expect commodities and commodity-related companies and products to price lower. Once again, the ugly head of the severe contraction in credit is inducing a degree of deflation with which nobody wants to deal. However, it's there and it doesn't have to be a game-ender. Lower prices, after all, are good for consumers.
In any case, tomorrow's release of 3rd quarter GDP will be either a boon or a bane for the markets. I'll take a flyer and make a call, especially since Goldman Sachs decided to change their mind so close to the release. At least mine won't move any markets, unless you're foolish enough to trade after hours on my recommendation.
My call is 3rd quarter GDP comes in at +3.2%.
Tuesday, October 27, 2009
Mixed Messages
Stocks began the day and finished it in mixed fashion, as the Dow was the only major index to close above the break-even line. Especially hard-hit was the NASDAQ, which suffered from a very downbeat report from Baidu.com (BIDU), China's version of Google, when the company reported third quarter earnings, but guided investors of a revenue shortfall upcoming due to a change in advertising placements. The stock opened down 77 points, but recovered to close only 49 points in the red. Still, the stock took an 11% hit by the end of the trading session.
The Dow was helped along by three components: ExxonMobil (XOM), Chevron (CVX) and IBM (IBM), which accounted for almost all of the smallish upside. The two oil majors were helped by a positive 3rd quarter from British Petroleum (BP), while IBM announced a $5 billion increase to its stock buy-back program.
Dow 9,882.17, +14.21 (0.14%)
NASDAQ 2,116.09, -25.76 (1.20%)
S&P 500 1,063.41, -3.54 (0.33%)
NYSE Composite 6,932.04, -28.05 (0.40%)
The session was overall a weak one, as declining issues beat gainers by a wide margin, 4263-2205. What is of particular interest is the small margin of new highs over new lows (123-71), the worst performance for new highs since that particular metric rolled over back in May. The easy comparisons to last year's stock prices, especially off the monstrous 7-month+ rally, would normally presume a large number of new highs, which was evidenced during the summer and early fall, but the recent pullback has changed the outlook considerably.
Volume on the day was in line with the overall trend of the past two to three weeks.
NYSE Volume 6,203,113,500
NASDAQ Volume 2,405,401,500
Commodities, like stocks, were tied somewhat to the stronger dollar, as gold fell $7.40, to $1,035.40, silver dropped 56 cents, to $16.54, but oil bucked the general trend, gaining 87 cents, to $79.55, though the $80 mark continues to appear to be a led on price. Demand is simply not high enough to support a price over $80, much less in the $70s. Additionally, supply is robust, with nary a shortage anywhere in the world. Price of energy commodities will continue to be pressured by warmer-then-normal weather in the Northern Hemisphere, which is predicted through December.
Investors, through their trading stratagems, are offering a very good insight into how earnings results are being played. With most of the big names already having reported, unless companies are beating both earnings and revenue projections, they are being bid up prior to the release of their reports and quickly sold off. This has all the earmarks that would accompany a market top, and the indices are generally 3% below the heights reached last week.
A 5-8% dip from here would be no surprise, especially with some severe headwinds approaching in terms of 3rd quarter GDP (Thursday), though first September Durable Goods orders before the bell tomorrow, which yesterday I incorrectly said would be reported today (hanks to Yahoo Finance).
The Dow was helped along by three components: ExxonMobil (XOM), Chevron (CVX) and IBM (IBM), which accounted for almost all of the smallish upside. The two oil majors were helped by a positive 3rd quarter from British Petroleum (BP), while IBM announced a $5 billion increase to its stock buy-back program.
Dow 9,882.17, +14.21 (0.14%)
NASDAQ 2,116.09, -25.76 (1.20%)
S&P 500 1,063.41, -3.54 (0.33%)
NYSE Composite 6,932.04, -28.05 (0.40%)
The session was overall a weak one, as declining issues beat gainers by a wide margin, 4263-2205. What is of particular interest is the small margin of new highs over new lows (123-71), the worst performance for new highs since that particular metric rolled over back in May. The easy comparisons to last year's stock prices, especially off the monstrous 7-month+ rally, would normally presume a large number of new highs, which was evidenced during the summer and early fall, but the recent pullback has changed the outlook considerably.
Volume on the day was in line with the overall trend of the past two to three weeks.
NYSE Volume 6,203,113,500
NASDAQ Volume 2,405,401,500
Commodities, like stocks, were tied somewhat to the stronger dollar, as gold fell $7.40, to $1,035.40, silver dropped 56 cents, to $16.54, but oil bucked the general trend, gaining 87 cents, to $79.55, though the $80 mark continues to appear to be a led on price. Demand is simply not high enough to support a price over $80, much less in the $70s. Additionally, supply is robust, with nary a shortage anywhere in the world. Price of energy commodities will continue to be pressured by warmer-then-normal weather in the Northern Hemisphere, which is predicted through December.
Investors, through their trading stratagems, are offering a very good insight into how earnings results are being played. With most of the big names already having reported, unless companies are beating both earnings and revenue projections, they are being bid up prior to the release of their reports and quickly sold off. This has all the earmarks that would accompany a market top, and the indices are generally 3% below the heights reached last week.
A 5-8% dip from here would be no surprise, especially with some severe headwinds approaching in terms of 3rd quarter GDP (Thursday), though first September Durable Goods orders before the bell tomorrow, which yesterday I incorrectly said would be reported today (hanks to Yahoo Finance).
Monday, October 26, 2009
Trend Reversal on Dollar Strength?
As perverse as our economic system and financial trading regimen (the stock market) has become, today's action should have surprised none but the greenest rookie investor. Stocks hit triple tops (at Dow 10,100 and S&P 1100) in the past two weeks, and the reversal has been underway since Friday, when stocks took a nosedive.
Monday's early gains (Dow up nearly 100 points) were erased in one swift movement between 11:15 and 12:10, when stocks went from close to their highs of the day to the lows of the session, conveniently blamed upon strength in the US dollar, which rallied sharply against a basket of currencies. The dollar move was well telegraphed. Being short the dollar was one of the most overcrowded trades seen in the history of the market. Sooner or later, this condition was bound to unwind, and today was probably just the beginning - or, more to the point - just another data point on the way to eventual dollar strength, the demise of gold and the stock market.
Dow 9,867.96, -104.22 (1.05%)
Nasdaq 2,141.85, -12.62 (0.59%)
S&P 500 1,066.95, -12.65 (1.17%)
NYSE Composite 6,960.09, -106.71 (1.51%)
Simple indicators confirmed the oversized downside. Declining issues beat advancers handily, 4796-1687. The bias was evident in the new highs-lows, in which the highs only surpassed the new lows by a score of 262-63, one of the smallest margins in months, especially important against the backdrop of last year's meltdown and easy comparisons to today.
Volume indicated more selling to come, at elevated levels.
NYSE Volume 6,480,251,000
Nasdaq Volume 2,344,048,750
Commodities were a major part of the story, erasing outsize gains from the past few weeks. Oil tumbled $1.82, to $78.68. Gold slid $13.60, to $1,042.80. Silver fell 63 cents, to $17.10. Once again, there is no denying deflationary pressure.
Tomorrow marks a day with more earnings from major companies, though earnings season has quickly become the sideshow as investors await Thursday morning's preliminary release of 3rd quarter GDP from the federal government. Prior to that, though, durable goods orders from September, the Case-Shiller Home Price Index and October consumer confidence numbers will move the markets.
Probably not overtly stated, there is more angst and aggravation with government meddling, especially with Barney Frank and the Fed's attempts to define regulations around "too big to fail" companies, than any financial commentator is willing to admit. The threat of government takeover of individual businesses is a threat the market will not handle kindly.
Monday's early gains (Dow up nearly 100 points) were erased in one swift movement between 11:15 and 12:10, when stocks went from close to their highs of the day to the lows of the session, conveniently blamed upon strength in the US dollar, which rallied sharply against a basket of currencies. The dollar move was well telegraphed. Being short the dollar was one of the most overcrowded trades seen in the history of the market. Sooner or later, this condition was bound to unwind, and today was probably just the beginning - or, more to the point - just another data point on the way to eventual dollar strength, the demise of gold and the stock market.
Dow 9,867.96, -104.22 (1.05%)
Nasdaq 2,141.85, -12.62 (0.59%)
S&P 500 1,066.95, -12.65 (1.17%)
NYSE Composite 6,960.09, -106.71 (1.51%)
Simple indicators confirmed the oversized downside. Declining issues beat advancers handily, 4796-1687. The bias was evident in the new highs-lows, in which the highs only surpassed the new lows by a score of 262-63, one of the smallest margins in months, especially important against the backdrop of last year's meltdown and easy comparisons to today.
Volume indicated more selling to come, at elevated levels.
NYSE Volume 6,480,251,000
Nasdaq Volume 2,344,048,750
Commodities were a major part of the story, erasing outsize gains from the past few weeks. Oil tumbled $1.82, to $78.68. Gold slid $13.60, to $1,042.80. Silver fell 63 cents, to $17.10. Once again, there is no denying deflationary pressure.
Tomorrow marks a day with more earnings from major companies, though earnings season has quickly become the sideshow as investors await Thursday morning's preliminary release of 3rd quarter GDP from the federal government. Prior to that, though, durable goods orders from September, the Case-Shiller Home Price Index and October consumer confidence numbers will move the markets.
Probably not overtly stated, there is more angst and aggravation with government meddling, especially with Barney Frank and the Fed's attempts to define regulations around "too big to fail" companies, than any financial commentator is willing to admit. The threat of government takeover of individual businesses is a threat the market will not handle kindly.
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