We’re taking two key points away from today’s action in the market:
1.) While the indexes finished lower (and the Dow for the 5th straight session), they finished well off the lows suggesting this dip is starting to be viewed as a buying opportunity
2.) The market showed just how vulnerable it is, reminding traders that it still has the ability to sell of 2% in a matter of a couple of hours
The current state of the market is likely to bring on a lot of contrasting conclusions which will make for a good tug-o-war between the bulls and bears. Chief among these are the breakdowns to new lows we saw in momentum stocks like CMG and CRM today. However, while both ultimately finished lower on the day, they did cut their losses in 1/2. CMG was more fortunate than CRM though as it rose back above the key $400 level while CRM stayed trapped below the critical $147.50 mark.
Then we have the VIX, which flashed some very bearish signals as it streaked to its highest point since April 10th, rising 10% at its high. By the end of the day though, the VIX wasn’t even up more than 1%. Bears will boast how quickly and rather easily the VIX was able to move higher, certainly a sight that created discomfort for bulls. However, those same bulls will talk about how it was just as easy for the VIX to give up all of its gains, something bears definitely would have preferred not happen.
Of course we couldn’t leave this space without addressing oil, which again sold off today. If you’re looking for a silver lining here its that oil held above its low from yesterday. In addition, oil has now traded lower 5 days in a row, and the last that happened, it marked a bottom for the black goo. Essentially washing out any of that silver though is the action in copper, which up until today hadn’t fell victim to the overall weakness in the market. Today though, copper closed back below the $3.70 mark, the first time it has done so this month.
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