Although the senior indices tried to hide it for most of the day, they stumbled into the close and more accurately reflected the downright miserable action. We had an OK bounce attempt early but never gained much traction, and then the big-cap momentum stocks were pretty much slaughtered. AMZN, PCLN, GOOG, AAPL, NFLX and others were hit hard as the hot money ran for safety. AAPL is a particularly cheap stock with no one - apparently - left to buy it. Even if Jobs never comes back, one to two years from now, buying today at about $330 will look like an absolute steal....
This was one of those days where it was very easy to take some nasty hits if you hadn't taken defensive steps as stocks weakened last week. These are the days that make you glad that you didn't ignore the poor technical action, even though the market has made that approach look quite foolish far too often.
Though the indices aren't in terrible shape, the average momentum stock, small-cap and commodity play is broken. All three groups have been struggling since the beginning of the month and today helped to cement the fact that they are in a downtrend.
The S&P 500 managed to hold a few cents above the low of earlier this month and is still above the 50-day simple moving average, but that is cold comfort if you were holding any momentum names today.
The market is a bit oversold now, and we'll likely see a bounce attempt soon, but how big will it be and how long will it last? Investors will be just fine.
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