There isn’t much to like about the market today, even on a day that the company that tells lets you choose to do just that completed the most talked about IPO in history. The market cracked below further support levels after struggling to stay near the break line thru much of the morning. The S&P500 broke psychological support at 1,300 and USO (the ETF that tracks oil) broke to another lower low. All of this as the VIX again rose to its highest level of the year, and finished up every day this week.
Friday seemed to be the explanation point bears were looking for as it capped what was the markets worst week of 2012 and worst overall since November. Oil has now closed lower 3 weeks in a row, something it hasn’t done since May 2010. The VIX meanwhile has closed higher 6 out of the last 8 weeks, something it didn’t even manage to do during the crash happy days of August and September. In addition, the last 4 days all saw the VIX go red at some point, only to finish the day in the green telling us there is a lot of demand for volatility protection on any dips lately.
We’ve been saying for the last couple of days that we’ve been due for a bounce and at times the market has almost done just that. However, now we have to question why the hell there hasn’t been any type of bounce? Each technical support level has just given way to the next one and so on and so forth, making it very difficult to place any bullish bets even though we’ve corrected 13% off of the 2012 highs.
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