so foul a day

Firstly, the initial subdued reaction (DC tax cuts) exploded into an exaggerated move in the early morning and extended into a gap open.   This was so uncalled for!.   All that could have been expected was a small bump immediately AMC on Monday, but instead this ‘foul’ of running the ES occurred.   What you saw was an immediate sell off/profit taking begin on single stocks at the open that gapped.  Clearly, this was an ES run!.  At about 10-11am,  only 1/10 of the Shadowlisted stocks were above open prices and the writing was on the afternoon wall.  The problem was conviction was not in buying stocks while the broad indicies held most of morning gap and even later in the day when the indicies made it back to near highs of day.  Individual stocks never came close to getting back to their indvidual highs in the afternoon.

What ensued late afternoon was a total mess as traders looked for reasons on the fast sell off.   You can cite about 5 reasons and none of them were really ‘catalytic’, but by this time everyone had noticed their single stocks had done nothing all day and/or succumbed to profit taking.  First ‘big’ excuse to hit was the ‘insider probe’ , which is hogwash in this view.  Market was also dealt a poor auction which made yields soar some more, 10yr over >3.10% became a headwind as some probably saw this a reason to think the equity out of treasuries trade had gone too far, a poor consumer credit #  and the tax package loomed to hit a wall of sorts in passing, plus cash coming out of other banks/SP for a C trade, China hike rumors (which were around since premarket).  These were the things to push the market off the cliff, but it wouldn’t have happened if we didn’t see the profit taking on single stocks instead of conviction come in early.  This was the writing on the wall and now the Bulls are faced with a small defeat it seems if they can't regroup on Wednesday.  One hope (watching for tomorrow) is what we’ve pointed out many times over the past year, if there are a bunch of small catalysts for a beating and not just ‘one’ real one, the market finds a way to reverse the selling.   Entering the week, noted the market was vulnearable to any negative noise on this quiet news week and that is occurring.  Now we have to wait and see where the ‘dip buying' line is.