Chalk Up A Nice One For The Bears
The bears really had their way with the market today. Spread the rumors that subprime is worse than most people think, and that it will tank the economy. Then sell the futures down hard to knock the market. And voila, a well executed bear raid.
The SPX fell roughly -2.0%, while the small-cap RUT fell -2.6%. Brokers were hit the hardest, falling -4.5% as a group, followed by homebuilders (-3.6%), banks (-3.2%), retailers (-2.4%), and industrials (-2.1%).
The market was so weak, that even oil reversed its gains and fell on the day. It closed below $58. The 10-year yield also fell below 4.50%, which should help liquidity, but not so much today.
So this is the retest. And it feels awful, just like they always do. If you have ever looked back at a good buying opportunity in hindsight and wondered why you didn't buy everything in sight, it's because on days like today, who feels like buying? Answer: No one.