Brett Steenbarger "Making Sense of the Current Market Weakness"
Excerpt: "I’m going to postpone my first "Introduction to Trading" [mentioned yesterday] post to offer a bit of perspective on the current market weakness. The indicator reviews of late have indicated a stalling out of the market bounce since mid-July, with negative dollar flows into stocks and more evidence of sector rotation than actual sector trending. With Monday’s reversal, we’ve seen a steady selling sentiment hit the stock market, taking us to multi-week price lows. Here are a few thoughts on the market action:
* Fear Goes Up – I mentioned a little while ago that the VIX had broken to the upside and that readership of this blog, which seems to swell during periods of market weakness, was more consistent with levels we see at market tops than bottoms. Well, on Thursday, the number of visits to the blog swelled by 40%…
* This is a Global Affair – The striking feature of the recent weakness is that it is associated with a strong U.S. dollar (the dollar index is up about 10% from its July low) and weak commodities…
* Keep An Eye on Participation to the Downside..."
Full article here.
