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Market Tumbles On Weak Commodities!

|Includes: AKAM, APA, BTU, CNX, Diamond Offshore Drilling Inc. (DO), FSLR, MEE, NOV, WLT

When the market falls, it falls fast!  The dollar continued to glide higher, as investors sell off stocks in the commodity sectors.  Oil fell to $77/barrel and gold dropped below $1030/ounce.  Miners were extremely weak, led by coal names.  Yesterday, MEE reported earnings that beat the estimates, but, revenue was on the soft side.  In a selling market environment today, MEE shares closed down 8.46%.  CNX lost 4.89% and BTU was down 6.02%.  Oil services were also down substantially:  DO -3.44%, APA -4.39%, NOV -3.99%, RIG -4.14%.

After the market, FSLR delivered earnings with revenue below the estimates.  Its shares were down more than 15% in after-hours trading.  AKAM, on the other hand, beat the estimates with its earnings and outlook.  Its shares jumped +9.23% after the report.

The Dow finished the day down 119.48 points; SPX stumbled 20.78 points; Nasdaq tanked 56.48 points:

The miners led the market in its decline.  XME (metals and mining) was down 5.47% while GDX (gold miners) lost 5.85%.  Both USO (oil) and UNG (natural gas) traded lower, -2.78% and -4.34%, respectively.  OIH (oil services) fell 4.41%.  XLF (financials) dropped 3.1% and HGX (housing) slipped 4.81%.  SOXX (semiconductors) was down 2.8%.  FXI (Chinese ADRs) slid 3.81%.

SPX

SPX fell 20.78 points to close at 1042.63.  It closed below the 1050 level.  The MACD curved down.

Nasdaq

Nasdaq tumbled 56.48 points to close at 2059.61.  Its daily MAs started to turn lower.  Its MACD was down as well.

Since August, for the past 3 months, the market has been consolidating at the end of the month.  The drop has been quick.  But, this fall was particularly sharp, going from new breakout highs back to below the support levels in September, which were SPX 1050 and Nasdaq 2100.  Asian markets followed the US down this evening.  VIX found some resistance at 25 yesterday, but, pierced through today.  In our Trading Room this morning, I commented:

October 28, 2009 8:36 AM
VIX
seems like it could hit 28 from here, although intraday charts are really toppy...

VIX closed at 27.91 today.  Tomorrow, we'll get both the GDP and jobs data, which would likely help determine the direction for the market for the rest of the year.  If the market does not snap back up right away, the market would lose the momentum of its recent uptrend, in which case, SPX could easily test 1000 by the year's end.  We will should see some bounces tomorrow, but, the question is will the bounces last and be strong enough to overturn this week's sharp fall.

Good night and HappyTrading! ™