Another "Take" On Yesterday's Horrific Day

There’s no way to really try and put lipstick on this pig. With breadth at about 29:4 to the negative, the indices losing an average of 4.16% and the S&P 500 failing the key 800 level (which began to act as resistance as the day wore on), it was undoubtedly a very ugly day. What’s more is that volume slowed considerably as we worked our way into the session, suggesting that we may not be oversold enough yet to generate a really good snap-back rally. Probably the most interesting thing, though – and the one which should really get our attention – is the fact that the Dow closed just 0.31 points above the November low.

There wasn’t any real catalyst to account for the pressure yesterday. The negativity was pervasive, and the only place that investors went looking to hide was precious metals. Perhaps the contrarians will be proven correct and the extreme shift in sentiment means that the weaker hands are finally being washed out. A double bottom in the Dow would certainly make for a good springboard for a nice counter-trend bounce, but as was the case before the Geithner speech, the last several employment reports and any other time when things were about to get interesting, there’s just no way to have an edge. Taking positions at this point is usually akin to nothing more than gambling.

This is obviously one nasty bear market, and trying to fight that fact is pointless. However, some day and from some point level, it will pass.