Market Montage

A nice reversal here in the closing 90 minutes to get the S&P 500 back into "the box" of upper 1350s to low 1390s.  As I stated in an earlier piece, some sectors are nearly washed out and even within the context of an intermediate term move down would be prone to some bouncing.  Hence pressing shorts after such a sharp move down posted some risk.  The market had fallen from 1415 to 1350 in a week.  Granted in latter 2008 and early 2009 that was "just a typical day" but it's a sharp move down in a short amount of time in a normal context.

So we'll see how long this sustains.

When they eventually bounce, the breathless financial media will be giddy… but these are simply getting to a point of very oversold in the near term.  Hence, prone for dead cat bounce action.  Unfortunately a few of these (semis, industrials) are groups you want leading an advance – not being at the end of the line in terms of sector strength. …

Ummmm, at this time only Green Mountain Coffee (GMCR) and Pandora (P) are green out of a multitude of watch lists I keep.  So I think it is safe to say we are going to have a 90% downside day unless Jon Hilsenrath breaks in with a QE3 story this afternoon.

The "triple bottom" at 1357 obviously broke and we're quickly seeing the S&P 500 at 1350ish.  As noted earlier, 1340 is a key support and with today being the first day of real panic (a lot of stocks with good fundamentals down 4 to 7%) it starts to get dangerous  for shorts the more we go down in straight line.  Keep in mind the S&P 500 was 1415 a week ago.

This is the third attempt at the S&P 1357/1358 level.  Silicon and carbon based life forms have their focus on it.  But while we bounced smartly on a 'double bottom' from this level a few weeks ago, 'triple bottoms' rarely hold.  Next level of support of this breaks is the 1340 from early March.  Seatbelts on…

In the end the stock market is a market of stocks.  We talk about the averages a lot because frankly people have measured that 70% of a typical stock's movement is dependent on the overall market.  Put another way, it is very difficult to be a trout and swim against the current.   The past few weeks I have seen more blow ups than the entire first 3+ months of 2012.   Yesterday an analyst mentioned a price cut for mattress firm Tempur Pedic (TPX) and the stock fell 20% at worst levels.  Also, unlike January 2012 earnings misses are being punished horribly.  Even earnings beats with weaker than expected revenue growth are being hammered.  Today's examples will be Rackspace Holdings (RAX) and Fossil (FOSL).  Last, companies who ARE beating estimates are in many cases not holding their gap ups – I will point to LinkedIn (LNKD) which jumped from 110 range to upper teens/120ish on earnings and has given it all back.   …