Thursday, September 22, 2011

Stocks plunge worldwide

     A dour outlook from Fed chairman Ben Bernanke and slowing growth in China are contributing to a worldwide market selloff this morning.   US stocks are down 300 pts at the open.

     Yesterday's Fed statement offered a bleak assessment of the prospects of future economic growth in the US and said there are "significant downside risks to the economic outlook."  Markets sold off 284 pts after yesterdays Fed statement.

     Also, Chinese Flash PMI which is the purchasing manager's index, a measure or manufacturing output, declined to 49.4, the lowest in two months.  This is adding to fears that global economic growth is cooling.

     US Markets opened 300 pts lower with the SNP down 31 to 1135 and the NASDAQ off 66.  Oil cratered tumbling over 6% to 81 and change.  Gold fell sharply off almost 4% or 70 dollars down to 1737.70.  Meanwhile US 10 year yields hit a new 60 year low at 1.77%

     Foreign markets were down with the Hang Seng Index trading down 900 points or 5% and the Nikkei down 180.  European stocks as you can imagine are tanking as well with the French, German and British bourses all down 4% or more.

     Across South America, the Brazilian Bovespa is down 3.5% and the Argentina Merval is down 4.3%.

     It looks like we could be starting the next leg down in the selloff.  We still haven't broken down through support so I won't add any shorts until we do.  The bulls need to make a stand soon if they want to hold this bottom.  Interestingly enough, small cap stocks are outperforming today in a horrible tape which could mean we get a bounce from the lows.

Stocks I'm Watching
     IWM- The Russell 2000 small cap index is outperforming today in a brutal tape.  It is down 1% less than the Dow.  I watch the small caps for signs or risk taking and risk aversion.  Usually on a bad tape, the small caps underperform.  I'm taking this as a signal that we could bounce back from here and am adding a long.

     AAPL- Apple is also performing well today in a bad tape.  It seems to be a safe haven in this market environment.  AAPL is down only half as much as the DOW.  I will probably buy my AAPL back today.

     MCD- McDonalds is also performing well today down about half as much as the DOW.  MCD is a great place to hide out in this market.

     CAT- Caterpillar has been performing horribly lately.  It has completely broken down from support around 80 dollars.  This is a bad sign for global growth.  CAT is down over 10% in the last 2 days! 

     NFLX- NFLX is up today!  This is mildly surprising to me as today is a risk off day and NFLX short is a risk on trade.  NFLX is up 1%. 

     FCX- Freeport McMoran Copper and Gold has been getting absolutely obliterated lately on slowing global growth.  The breakdown in this name is a strong signal about slowing global growth.  It is down 9% today and 15% in two days.

Market Recap
     Well it was a pretty bad day for my trading account.  I sold my gold long for a 6 percent loss and I tried to trade AAPL today unsucessfully.  I bought AAPL in the early going and got stopped out when it dropped past 400 later in the day losing about 2 pct.  Today's action was brutal.  I don't understand this market right now.  I don't see how we can be down 500 pts on basically no news and when Greece was going to hell last week we were rallying!  Emergent Markets were down 6-9% today!  FCX was down 12%!  What the hell!  There was no news to justify that kind of action.  I know global growth was slowing but so did everybody else I thought.  China's PMI wasn't that bad last night! You would have thought Greece went belly up today based on the price action. 
    
    With that being said, I am now 100% cash in my trading account.  It looks like the market wants to break down from here.  EM's have already started the second leg down, it's just a matter of time for the US markets I believe.  Call me crazy but on day's like this I like to buy for my long term portfolio so I picked up a small amount of emerging markets stock today.  It's probably a mistake trying to bottom feed here but I don't see the justification for the kind of move we had today so I'll pick up some on the cheap. 

Disclaimer: Nothing in this blog should be construed as a recommendation to buy or sell any securities! Please do your own due dilligence before buying any stocks or bonds!

27 comments:

  1. What concerns me the most is the Bovespa(and Merval) but none of them are actually big or have a big worldwide impact.

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  2. @Hasidic Plumber

    That concerns me as well. I have been watching the EM's and they have been performing horribly. I think the Brazil market is down like 30% this year.

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  3. I need to invest in a hard hat. The sky really is F'n falling.

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  4. I guess.. most of this is just expected, isn't it? :/

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  5. @D4

    well the market is acting as if it's unexpected.

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  6. most of this will probably don't happend

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  7. This is sad to see. Hopefully stocks will rise again soon, it would be a shame to see them continue this plummet.

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  8. AAPL- Apple is also performing well today in a bad tape. It seems to be a safe haven in this market environment. AAPL is down only half as much as the DOW. I will probably buy my AAPL back today.

    good job apple keep it up, I'm sure its ganna jump even higher after the iOS5 and the iPhone 5

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  9. I love the way you track those stocks here on blog! :)

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  10. Your trackings are really useful, maybe after a few months we can check the archive out and see how things went right/wrong.

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  11. I wouldn't bet on aapl at the moment with its loss of jobs Im still waiting to see if the new guy can recreate his vision or plow it into the ground

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  12. I heard we're already in a double dip.

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  13. I dont see how Apple does it, no one I know has Mac sh*t, and only a couple have iPhones.

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  14. Unrelated but what's your opinion on FOREX trading?

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  15. This is why I only buy stocks in Toilets. It's good when they plunge.

    Ba dum TSS!

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  16. @dwei

    I don't know anything about forex trading. I have never done it before. From what I hear it's risky because you can use a lot of leverage. Perhaps you could ask my friend the Chartographer. This guy has more knowledge than me.

    http://swingtrading101.blogspot.com/

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  17. Crazy day, today dollar up. I won money :)

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  18. @mochileiro

    Nice one man! I got to get me some greebacks too!

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  19. like the rest of the world, this is doing great dmg here in mexico

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  20. You'd think Netflix would go down due to all of those price increases O.O

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  21. @Natural One : Apple does it by overcharging for their stuff =D Also, going largely for the customer base who are more likely to not give a crap about performance or price vs style

    I'm still equal parts giddy from worry and enjoying the chaos.

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  22. We have to think and learn how to invest well

    Thanks for sharing!

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  23. great post
    ps : "imagini,, means = images , photos etc in Romanian . :D

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  24. wth is happening with the stock rating today

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  25. oh boy stocks are really going to hell aren't they.

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