Tuesday, May 30, 2006

I Should Have Stayed In Cleveland

Did you catch that license plate? I woke up in Cleveland this morning well before the market opened. I hopped on a flight to LA with my 2-year old daughter (talk about a long flight!), thinking the market would likely hold up until I landed. Not!

I got to my office with an hour to go, and a sea of red staring me in the face. I pinged a couple of guys to get their takes on what happened, but it was pretty much just same 'ol, same 'ol.

The market got whallped today on higher volume also, making for another distribution day. I was looking for a follow-thru day early this week, but those plans might have to be put on hold. We shall see.

Breadth was awful, and the Hi/Lo index went back into triple digit negative territory (-104) on the NYSE, although it held up far better on the Nasdaq.

Big-caps (SPX) were down -1.6%, the COMP fell -2.1%, and small-caps (RUT) sank -2.5%. Pretty nasty.

Notably, investor anxiety surged. The VIX was up a full 31%! That's a big move. And the CBOE put/call closed at 1.20, another highly elevated reading. The ISE Sentiment Index fell near its 52-week low to 104. Over the weekend, the Market Vane bulls fell back to levels hit last October.

Tough to find a bottom in this market, but the oversold condition and highly bearish sentiment continue to have me looking to add long exposure.


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