Ouch! What was that?
As I said in the comments this morning, the second Paulson’s testimony began I knew we were doomed. You cannot discuss the US economy in any kind of detail without sending investors running for the doors. Add to that the ridiculous party positioning that makes a mockery of the whole thing and it’s amazing we only dropped 120 points.
The SOX were the poster boys for a false recovery, dropping 2 week’s worth of gains in just one day:
http://stockcharts.com/gallery/?sox
The Nasdaq came to a halt right at the critical 2,100 mark, below which we may test last year’s lows again. The S&P failed the 1,250 mark so severely that I’m willing to bet the 200 dma is heading there (which means at least a couple of weeks below that mark).
Tomorrow the Dow will test 10,900, all it will take is one wrong word from the Fed and we could be looking at a 200 point drop!
Oil held strong but gold got a huge rejection off of $595 mid-day, giving up 2% in 4 hours of trading. The drop was an American engineered event as it began the moment the European exchanges closed and, had I been there, I would have been buying gold at the close but ready to get out if we blow the $580 mark.
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The S&P and the NYSE both kept us out of mistakes today – this is why I pick tracking indicators, it helps to have a good objective rule to keep you from throwing cash around!
Our gold plays gapped up today – lucky for us because that was the peak for the day. Even MRB took a plunge at the close to $2.96.
EBAY was such a disaster that I crossed them off my watch list, giving up the full 5% today and only saved by the bell.
I’m very pleased to have gotten out of JNJ at $1.20, even though it went lower as they had a big jump in the AH for reasons that are not clear yet.
I cheated and picked GM $27.50 puts up for $1 but I got out at $2 as I had to leave and didn’t want to leave it unattended (even though I hopefully talked someone out of buying it at the 5% mark). The $27.50 puts finished the day at $2.25!
INTC was another disaster after a strong open. If it can’t hold $18 tomorrow the Nasdaq is doomed!
I felt very right about getting out of XOM $57.50s at $2.75 (up 55%) although the oil sector singlehandedly held up the markets.
