Yesterday, once again, belonged to the bears.
But in the closing minutes, sellers overwhelmed buyers, and every major index closed in the red.
- Dow Jones -0.4%
- Nasdaq -1.4%
- S&P 500 -0.8%
- Russell 2000 -2.3%
Blame the banks…
Higher Interest Rates
- Bank of England … +0.5% to 2.25%
- Norges Bank (Norway) … +0.5 to 2.25%
- Bank of Indonesia … +0.5 to 4.25%
- Hong Kong Monetary Authority … +.75 to 3.50%
- Swiss National Bank … +0.75 to 0.50%
- (ending its negative rate for the first time since 2015)
- Japan broke the trend leaving its rate unchanged at -0.1%
10 of 11 sectors closed the day red.
The lone winner…
- Healthcare (XLV) +0.5%
It’s worth noting that people will spend money on their health regardless of economic conditions.
To quote a friend, “Cancer is always a hot sector.”
The day’s biggest losers…
- Industrials (XLI) -1.5%
- Financials (XLF) -1.7%
- Consumer Discretionary (XLY) -2.3%
How low can we go?
Today we’re pulling out a chart that shows the number of stocks trading below their 200-day moving average.
After yesterday’s selling, the market is closing in on 20% … A level that has been breached only four times in the past 20 years and never maintained.
Our other indicators say a turn is near.
- The VIX remains stubbornly low.
- RSI levels are now oversold for all four major indexes.
- The Put-to-Call Ratio also points to oversold conditions
We’re looking to buy into a retest of June’s lows.
We’ve not sold a single share of stock this week.
October is only 6 trading days away.
On the other side of October are the mid-term elections … Once those are behind us, we’ll be looking for blue skies.
We maintain a major Q4 rally is likely in store.
*SLNG on watch
*TNK support at $29
FENC support at $7.50
SAVA on watch
DCPH support at $18
RVNC support at $25
FREY support at $14.50
^SGML support at $25
CANO support at $7.50
NAT support at $3.35