For the past couple of weeks, the market had been worried about the debt ceiling. After Congress dragged out its debate on the issue until the deadline date, the market now has something else to think about. Yesterday, the ISM number came out much lower than expected and the market immediately sold off. We cashed out most of our long positions and picked up some trades on the downside. In the Trading Room, I cautioned our members not to add to the long side:
August 1, 2011 6:53 AM
not to eager to add longs this morning. downward momentum may need sometime to turn...
Today, after the Senate passed the bill to raise the debt ceiling, the market continued to push lower. Even the recent leaders gave in: GOOG was down more than $14, or 2.37%; AMZN lost 4.35%; the almighty AAPL was down 2%; high-flying PCLN chopped off $20; ISRG, which soared above $415 after earnings, is now back to $382!
Here are some earnings movers: HLF traded as high as $63.35, a new all-time high, after reporting yet another stellar quarter last night; it got dragged back to $58.7 with the market, still up +5.69% for the day. If the market bounces tomorrow, HLF should see above $60 again. PCS got hammered today, losing more than 36%, after missing its earnings estimates. Its competitor, LEAP, got the "short" end of the stick, traded in sympanthy with PCS, down 21%! JCOM was able to show some green in a sea of red, popping up +12.7% after market with a strong quarterly report and a raise in its 2011 outlook.
The Dow was down 265.87 points; SPX dropped 32.89 points; Nasdaq tumbled 75.37 points:
Most sectors were down. OIH (oil services) fell 3.08%. XME (metals and mining) lost 2.9%. XLE (energy) was down 2.78%. Both SOXX (semiconductors) and FDN (internet) dropped more than 3%. Money went into GLD (gold) and SLV (silver), as gold recorded a new all-time high, trading near $1660/ounce!
SPX dropped 32.89 points to close at 1254.05. Its daily MAs and MACD curved down.
Nasdaq tumbled 75.37 points to close at 2669.24. Its 30-day MA was flat, but, the MACD sank.
VIX was down most of the day, but, closed higher by the close. SPX closed below 1260, where it found support in June. Nasdaq finished above the June low, which was about 2600. This market is now very nervous and it seems to be difficult to entice buyers to commit. We may see some bounces tomorrow, but, with the unemployment rate coming on Friday, the market should still be cautious. ADP data tomorrow could give another glimpse into Friday's jobs report. Gold has broken out to a new all-time high. Silver on the other hand is lagging. I think we'll see SLV above $40 again soon!
Good night and HappyTrading! ™