Major Sell-Off In Progress
Courtesy of Joshua M Brown, The Reformed Broker
Today’s follow-through sell-off comes on increased volume and superlatives like “it’s the worst day for the market in three years”, which I believe it is. You have to go back to the late summer / early fall of 2011 to find anything like it.
What started as a Europe thing quickly became an Ebola thing and then we got a slew of tepid US economic data which served as the titular reason for this new leg down. We’ve spoken with a handful of clients so far today about the selling specifically but panic isn’t apparent.
The one positive about this action is that it’s all happening at once. Nobody wants a ten percent correction, but if we get one, wouldn’t we rather have it unfold over the course of a month rather than six months?
Every single reading on the internals / RSI is screaming short-term oversold, but as we’ve seen in darker times, oversold readings can persist for what feels like an eternity.
The Dow is off some 400 points as of this posting and through the 16,000 level. The S&P has erased all of 2014’s gains and is now working on stealing back some of 2013’s. My best guess as to what’s happening now is that the Relentless Bid era is over and we’re adjusting to whatever is to come.
Adjustments are even more painful when they’ve been resisted for so long.
More later.
