MARKET CRAPS OUT: Thursday: May 20, 2010
Just last Friday I wrote:
“But during these highly volatile markets it is important to remember that when they sell off they sell off with a vengeance and when they buy them they run them up, way too far, way too fast.”
I don’t think my sentiments could be better illustrated than by today’s frenzied sell-off. Whatever tomorrow brings I would highly recommend for those of you traders with a short term trading mentality, that if they sell off early tomorrow that you should back up the truck and load up. Technically, the market is extremely oversold and late tomorrow and early next week I would expect a retracing of the recent selling as there are many upside gaps to be filled.
As crude as this may sound, it is like taking a laxative and finally, completely cleaning out your system. Well the market [excuse the pun] really crapped out today.
By the close, the Dow Jones Industrial Average (DJIA – 10,068.01) was holding onto the 10,000 level for dear life, having dropped 376.4 points, or 3.6%. As a result of today’s decline, the Dow ended below its 200-day moving average for the first time since July 14, 2009.
The S&P 500 Index (SPX – 1,071.59) gave up 43.5 points, or 3.9% and finished beneath support at its own 200-day moving average for the first time in nearly a year.
Finally, the Nasdaq Composite (COMP – 2,204.01) fared the worst of the major indexes, falling 94.4 points, or 4.1%, by the close.
