Courtesy of Doug Short.
The S&P 500 gapped lower at the open, down 0.27%, and hit its 0.99% intraday low in the opening minutes. The prospect of a government shutdown kept the index in the red, but the selling remained controlled. After spending most of the day in a relatively narrow range, the 500 closed with a trimmed loss of 0.60%. My friend Lance Roberts posted an interesting item today that helps us understand why there is no panic over the probable shutdown. Past shutdowns have not been major market movers.
Today may have been the seventh loss in eight sessions for the index, but the final score for September was a gain of 2.97%, and make that 4.69% for the third quarter.
Here’s an hourly chart since before the September 18th “No Taper” rally (short covering?). The decline has been more or less orderly, and the volume has been unexceptional. The one seeming spike in volume was normal for quarterly quadruple witching options expirations.
Here’s the equivalent snapshot of the 10-year Treasury index. Despite today’s government shutdown angst, the closing yield on the 10-year note was unchanged from Friday’s close.
A daily chart puts the selloff in the context of the two previous declines since late May. The intraday low fell below the 50-day moving average, but the index closed fractionally above this technical benchmark.
The S&P 500 is now up 17.91% for 2013 and 2.55% below the all-time closing high of August 18.
For a better sense of how these declines figure into a larger historical context, here’s a long-term view of secular bull and bear markets in the S&P Composite since 1871.
