Market Wrap: Bulls Give Up The Ghost
Today was certainly a change in character for the market, at least compared to the last couple of weeks.
The market was starting to show some resilience, in that it was beginning to hang in there despite more bad news coming out on bank write-downs and the economy. But then today, AIG came out with a write-down that was totally expected, and the market got slaughtered.
Looking at the technicals, in one fell swoop it looks like the market went from a setup of benign consolidation to one that looks like a retest of the January lows may be in the cards.
Of course, bearish sentiment is spiking ahead of this, as everyone rushes to buy downside protection in the options market. So what happens if the market doesn't make new lows? I suspect you could then see one heck of a short-covering rally.
But right now the bears are salivating. The financials led the way down today, and you can't have sustainable rallies without the financials participating. Energy stocks also got crushed today, and they had been a standout in terms of leadership.
Two stocks that I don't think are going to new lows right here are GOOG and AAPL, which look like they have bottomed. But there is certainly not many growth stocks leading this market. Let's hope March can usher in a change, and tech can get some mojo back.
long AAPL, GOOG