After rallying an additional 80 points the past week or so, the market finally gave up up some serious gains today. It peaked right in the middle of it’s resistance area at 864. Financials were the big losers today led to the downside by GS which gave up nearly 15 points despite doing a good job of beating its numbers.
Most of the major indexes dropped considerably, with Dow giving up 1.7%, the SPX -2%, and the Russell 2000 slightly over 3%. The SOX held up relatively well dropping only a slight .24%. Think this may change based on INTC’s release after hours tonight. Though the earnings were okay after heavy revisions down, the outlook was not pretty and INTC was down about .50 in after hours trading. This could weigh on the sector in tomorrows trading.
As stated earlier, financials, after being the leaders in the recent up move, took a pounding, coming in for some serious profit taking. It’s notable that SKF was up almost 10% today and FAZ nearly 20%. In other markets oil was slightly lower, as were the precious metals while the dollar was mixed, though it seems to be rallying some here overnite. Don’t forget we have the Beige Book release tomorrow after lunch. Usually good for some fireworks.
Where do we go from here. I think we’re in for a small pullback and have drawn some natural support levels seen on the chart below. I ‘ve also included the most recent video from Market Club which shows possible fibonacci retracement levels. If you noticed the VIX today, was down slightly, even as market dropped. Hmmmm
Positions in stocks mentioned – long FAZ, SKF