Another Distribution Day
The market finished near it's lows today, and volume rose on both exchanges, making for another distribution day. The selling has certainly been nasty, but the market is now deeply oversold.
Brokerage stocks (-2.9%) and materials (-2.6%) were hit hardest, though every sector I follow was down on the day.
It looks like I was a bit early in calling for a snapper in the market today. But I stand by my call, and think the market will finish higher into the end of the week. Measures of investor pessimism spiked today. Witness the CBOE put/call ratio hitting 1.72, or the VXO index spiking +25% intraday, to levels not seen since October 2005.
It is somewhat rare to see such a big spike in these fear indicators this early in a correction. Typically, the indicators spike toward the end of a correction, as investors throw in the towel. As such, I suspect that we should get a pretty good bounce. But since this correction likely needs to put in more time, I will be looking for some sort of retest after said bounce runs its course.