Those anticipating a ‘reprieve’ from August's selling in a holiday week were quite happy at the gap open to 1081. Unfortunately, that joyous mood didn’t last longer than 20minutes and the next 5+hrs were a drift down and sombre reminder empty trading desks can still do damage. The only question was how low? SPX 1067 (-4 on day) is the answer and a low close for the month is achieved. The SPX is off at least 25+pts now off DJIM’s benchmark 20ma, that’s a long ways off thinking about being too long (oversized in lots and /or positions) as 1057 is the next zone area support. As noted heading into the week, stay slim and trim despite the idea of a beach week trading environment. Today was just ugly, if you just look at the fact that this market couldn’t hold a cheap gap and went on to finish at days low and month low, you get a simple ugly day. The selling is again reminiscent of the action since the August 11th big down day, first clue of profit taking was Friday the 13th, this day had very late day selling and here we are again today in the morning and end of day with the same selling. Simply, the market can’t hold it’s liquor you can say (small volume or not). Traders want some of their previous summer gains back, something discussed here last week and will take off positions on any up move. As slow as today was and on par for slowest day of year, it didn’t stop a last 30min volume push (SPY notably). If the market participants think the market can outduel the macro side by “may bid” type M&A rumors like today, it’s mistaken. This goes back to what was noted last week that all the M&A hoopla will take a step back off Initial claims etc, if bad!.
Only a dozen or less stocks ended green off our DJIM list as the tape was ‘safety’ biased. The names noted yesterday, safe in our terms in an unpredictable market were some of the only green names on today’s board…FTNT, HANS, GMCR.
Anyways, market should find some footing/bounce some before Friday's Bernanke address, if 1050's are re-visited.