That was nasty! Not really bad in the big picture but for those with a short-term view of the markets, that was a scary little dip today. Canaries are dropping like flies and, to further puree a metaphor, we have a full-fledged flame-out on our Nasdaq engine and the SOX drive is shot!
Well that’s OK, the manual says: "In case of Nasdaq engine failure switch to the Transport drive." What? Down 16 you say? How about the backup Russell engine? Fell apart at 780? OK – time to panic! (just a little).
We did hold our senior index levels today! But when you’re driving with 7 major tracking indices and you have a blowout on on 3 of them, you’d better schedule a pit-stop fast and rotate your positions or you may crash and burn on the next curve!
- The Dow closed at 12,567, it held.
- The transports dropped 16 points, not good but not terrible yet.
- The S&P held 1,425 - BARELY!
- The NYSE 9,125 is precarious at best!
- The Nasdaq failed at 2,443!
- The Russell broke its trendline and closed at 778.
Hard to get enthusiastic isn’t it?
I can forgive the Dow, the S&P and the NYSE – they are dragged down by the commodity sector but the other indexes are supposed to provide some sort of leadership and they have really fallen apart. Blame Bernanke for being a downer this morning, warning congress that "that rising entitlement spending could create a "vicious cycle" of rising debt and interest payments and an eventual fiscal crisis." Not exactly a tune you want to whistle is it?
Oil was no help today, falling so hard, so fast that it made investors think something was wrong with the global economy, despite CPI and PPI evidence to the contrary. IBM’s net was up 11% but it sold off, Apple was up 48% but it sold off, Merrill Lynch was up 68% but they sold off… Hey – I found one! BK’s earnings were up 300% – all the way to $1.79Bn and their stock actually went up: .69! That’s almost 2%!!!