Ok, since I posted that song earlier today, “Free Falling” by Tom Petty, I got it stuck in my head! (Please come to the blogsite to see the music video.)
Crazy day!! The Dow was at one point down almost 450 points!! Nasdaq was down more than 80 points!! SPX was down more than 50 points!! VIX (the volatility index) was over 23!! What does this kind of big movements remind you of? That’s right, the 1990s!! I am “happy” to say that I think the “fun” is just getting started!! But, we’ll have to get through some of this volatility first.
We had great earnings news last night!! And, this morning we were hit with more bad news from the housing and financial sectors.
XLF (ETF for the financial sector) just couldn’t get a stop!
It is piercing through one support after another. How low is it going to go? GS lost another 8 points today (closing at 195.12) and was trading below 190 at one time!
XOM also put on added pressure when it missed its earnings estimates this morning! XOM lost 4.56 points today! Both USO (-2.12%) and OIH (-2.32%) were also down today.
And, the ones with good earnings news still closed up big time (see AAPL, BIDU, FFIV, WFR, POT, CMI)!!
The major indices, however, don’t look too good!
The major indices are now some good distance below their recent highs. As of today’s close:
SPX is off -4.7%
Nasdaq is off -4.6%
Dow is off -3.9%
So, where are we going from here? I think we could see more volatility. And, the major indices could slide some more. Here are some immediate support levels, if the markets were to fall further:
Nasdaq 2550-2575 (it did go below 2575 today)
Dow 13200-13400 (it did go below 13400 today)
On 8/7, there’s another FOMC meeting to determine the interest rates. Could all these sudden housing and credit bad news be a maneuver to pressure the Feds to actually “lower” the interest rates? I guess we’ll have to patiently wait until then to find out! Recently, gold has rallied a bit, but, it is releasing some pressure with the stock market this week. We should also keep an eye on the gold price between now and 8/7 for any indications!
Good night and HappyTrading! ™