Groundhog Day or Turnaround Tuesday?
The market is lower again in early trading on no new news, but rather a continuation of concerns out of Europe. It feels like Groundhog Day, with each day playing out surrounding the same news event. Speculation over a Greek default remains high and eurozone officials have said that they will delay disbursement of aid to Greece.
There is no real economic or corporate news this morning to account for the amount of selling pressure we saw in the first hour. Some of it is technical selling after the SPX broke below the 1100 support level that has held since early August.
Asian markets were lower overnight, and Europe is down again today as well. Commodities are also lower, with oil prices down near $77.20 and gold prices lower to $1640.
The 10-year yield was lower in the first hour but has since bounced a tad to 1.80%. Ditto for the VIX which opened higher but has since reversed into the red to a still high 44.72.
Trading comment: Today could either be another groundhog day or it could be a 'turnaround tuesday'. The Russell 2000 was the first index to buck the selling and go green. Then the Nasdaq followed suit and turned positive. As yet, the S&P is still struggling to get out of negative territory. With the market down quite a bit in the last 4 days, we have taken partial profit on one of our index etf hedges. Sentiment is hitting extreme bearish levels, and a bounce seems likely in the near-term. While we are still positioned defensively, we like to trade around our hedges from time to time.
less long RWM