Commodities and related sectors just cannot seem to find a bottom. The market experienced another broad-based selloff! Metals, coals, fertilizers, and energy stocks all recorded huge losses. Metals: X -12.94%; CLF -11.59%; RTP -8.09%. Coals: MEE -19.38%; BTU -8.81%; ACI -7.6%; CNX -9.4%. Fertilizers: MOS -11.88%; POT -8.52%; CF -12.05%. Energy: UPL -9.31%; DVN -8.11%; HK -16.73%; CLR -17.82%; HES -9.59%!
Financials were weak also. But, LEH stood out with a 45% drop today! Mounting concerns over the survival of LEH pressured the investors to run for the exits. On Thursday last week, one of our members, Bagger Vance, was loading up on LEH puts:
Bagger Vance September 4, 2008 9:55 AM
i think the LEH situation is awful here, and I loaded up on some BK type puts….oct 10 and 5 puts, 79 cents and 19 cents respectively…
The Oct 10 puts closed at $4.25 today and Oct 5 puts closed at $1.42, +438% and +647%, respectively.
OptionDragon also made some great trades today:
You can find their market comments in our Trading Room, and, you can subscribe to their private trades and email alerts here: OptionDragon; Bagger Vance.
The Dow ended down 280.01 points; SPX lost 43.28 points; Nasdaq tumbled 59.95 points:
Most sectors were down. VIX jumped to close above 25! GDX (gold miners) lost 9.18% while GLD (gold) fell 3.01%. USO (oil) and UNG (natural gas) continued their downward slide, losing 4.17% and 1.97%, respectively. XLF (financials) dropped 6.39% and HGX (housing) stumbled 6.9%. XLE (energy) gave up 6.92%. XME (metals and mining) slipped 8.82%. FXI (Chinese ADRs) lost 5.25%.
SPX
SPX gave back 43.28 points to close at 1224.51. It closed below the 1240 level. Its daily MAs curved down and the MACD went lower.
Nasdaq
Nasdaq tumbled 59.95 points to close at 2209.81. Its daily MAs and MACD continued to move downward.
The market is in a horribly messy condition! Commodities continue to get hammered. Many of the stock names mentioned above have lost about 50% of their value since July this year! VIX jumped to 25.47 and can shoot up to 30 from here. After the market, FDX raised its 1Q outlook as fuel costs have gone down. FDX shares jumped nearly +5% in AH trading. TXN also provided financial forecasts that inspired investors; its shares traded up +5.25%. Although most sectors still look weak, we should see some bounces tomorrow. Some of these commodity-related stocks have really taken a beating, and, could get some near-term bounces. But, be very careful, VIX could be on a breakout run to 30.
Good night and HappyTrading! ™
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