That's a selloff!
My last post was on 2/16. Since then the Nasdaq did in fact make an new multi year high as did the NYSE, marginally. But, upon returning to the office today from a nice vacation I note that I should have stayed away. What a day.
There was an inability for the exchange to properly calculate the Dow index and that seemed to lead to a 200 point plunge in a matter of minutes. Prices recovered but that was small consolation. On the NYSE 2,921 stocks declined, 458 advanced. On the NASDAQ it was worse than 10:1. On both exchanges, the up:down volume was at extreme levels. Up volume was a mere 1% of the total on the NYSE, 4% on the NASDAQ. Don't recall ever seeing it like that. So extreme was the day in general that it would suggest an end to the correction. While bull market corrections tend to be short and sharp, just like this one, my experience is that corrections last more than one day. But at the same time this one was a 3-4% affair and that's a lot for one day.
The fly in the ointment is overseas. We wanted a global economy? Now we have one and the markets are more interrelated than ever. China got whacked for 9% as did the Shanhai index. Argentina, Brazil, Mexico & Chile lost 7%, 6%, 6%, and 5%, respectively. China is the key emerging market and if that continues to tumble then it will ripple through the rest of the world. Since speculative excesses have been huge there, further declines in China would not surprise me.
Back to our markets, oil and gold fell so that tends to not hurt equities. And US govt's rallied quite sharply so that decline in rates could help.
My take is that this correction for the US markets is closer to the end price-wise than the beginning but may take more time to grind along and reduce the speculation somewhat. There are some terrific buys - GS down 7% today, 10% in a week, JWN down 8% today, 15% in a week - to name a few. Declines like this are usually a great time to add to positions or to trade relative losers for relative winners. When the snap back comes, you'll be glad you did...
Please remember that different types of investments involve varying degrees of risk, and that past performance may not be indicative of future results. Therefore, it should not be assumed that future performance of any specific investment or investment strategy (including the investments and/or investment strategies recommended or undertaken by Geller Capital Management, LLC) will be profitable. Please remember to contact Geller Capital Management, LLC if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you want to impose, add, or to modify any reasonable restrictions to our investment advisory services. A copy of our current written disclosure statement discussing our advisory services and fees continues to remain available for your review upon request.
There was an inability for the exchange to properly calculate the Dow index and that seemed to lead to a 200 point plunge in a matter of minutes. Prices recovered but that was small consolation. On the NYSE 2,921 stocks declined, 458 advanced. On the NASDAQ it was worse than 10:1. On both exchanges, the up:down volume was at extreme levels. Up volume was a mere 1% of the total on the NYSE, 4% on the NASDAQ. Don't recall ever seeing it like that. So extreme was the day in general that it would suggest an end to the correction. While bull market corrections tend to be short and sharp, just like this one, my experience is that corrections last more than one day. But at the same time this one was a 3-4% affair and that's a lot for one day.
The fly in the ointment is overseas. We wanted a global economy? Now we have one and the markets are more interrelated than ever. China got whacked for 9% as did the Shanhai index. Argentina, Brazil, Mexico & Chile lost 7%, 6%, 6%, and 5%, respectively. China is the key emerging market and if that continues to tumble then it will ripple through the rest of the world. Since speculative excesses have been huge there, further declines in China would not surprise me.
Back to our markets, oil and gold fell so that tends to not hurt equities. And US govt's rallied quite sharply so that decline in rates could help.
My take is that this correction for the US markets is closer to the end price-wise than the beginning but may take more time to grind along and reduce the speculation somewhat. There are some terrific buys - GS down 7% today, 10% in a week, JWN down 8% today, 15% in a week - to name a few. Declines like this are usually a great time to add to positions or to trade relative losers for relative winners. When the snap back comes, you'll be glad you did...
Please remember that different types of investments involve varying degrees of risk, and that past performance may not be indicative of future results. Therefore, it should not be assumed that future performance of any specific investment or investment strategy (including the investments and/or investment strategies recommended or undertaken by Geller Capital Management, LLC) will be profitable. Please remember to contact Geller Capital Management, LLC if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you want to impose, add, or to modify any reasonable restrictions to our investment advisory services. A copy of our current written disclosure statement discussing our advisory services and fees continues to remain available for your review upon request.
posted by David Geller at 6:07 PM
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