Bears In Control

Next target 1290

On Wednesday morning it looked as if the bulls were trying to draw the line at yesterday's lows and looking to see if they could convince buyers that yesterday was once again a one-day wonder. But futures dropped six points the hour just ahead of the open. We didn't have any major economic data to review before the open, and we were waiting on Existing Home Sales at 10:00 am, although I am pretty sure no one really cares about that data any more.

The session began without a significant gap and moved quickly to put the high of the day on the chart just fourteen minutes into trading. But then the bears once again took control and pushed the equities lower in multiple waves that really got underway in earnest just after 11:00 am. At about 12:20 the SPX bounced off support and soon retested the level and attempted to bounce again. But this was quickly snuffed out before support was briefly violated and the SPX bounced once more. The low of the day was painted at 1:19 and this mid afternoon bounce carried the index almost thirteen points off the lows. The closing hour was even choppier than the rest of session as the index closed with a sell-off and ended at about the middle of the intra-day range.


Volume was once again heavy today and clearly the intraday volume patterns spiked on the downward moves. Looking at the Nightly Breadth Indicators is interesting again last night as several of the indicators are moving upward while the McClellan Oscillator is reaching into oversold territory.


On an interesting note the Agriculture stocks like Agurium, Potash, CF industries, Mosaic and the like painted really nice looking hammers. Unfortunately above my bids. I had mentioned in my post about them yesterday that they had sold off prior to the market fall off a cliff and they may rebound before we put in a bottom to this correction. I am usually never right about this, having finally acknowledged that, I'll be right just this the one time!


Sectors stronger than the SPX for Wednesday:
- Energy -- Outperformed the SPX by +260%.
- Financials -- Outperformed the SPX by +65%.
- Consumer Staples -- Outperformed the SPX by +36%.
- Utilities -- Outperformed the SPX by +38%.
 
Sectors weaker than the SPX for Wednesday:
- Basic Materials -- Underperformed the SPX by -12%.
- Industrials -- Underperformed the SPX by -115%.
- Technology -- Underperformed the SPX by -66%.
- Health Care -- Underperformed the SPX by -36%.
- Consumer Discretionary -- Underperformed the SPX by -86%.