Market Action, February 23 2009 - S&P 500 Down 15% in 10 Days
After news of a possible investment in Citigroup by the federal government spiked the market higher on the open, investors immediately hit the bid and ground the market lower throughout the day.
The selling was relentless as stocks were given little time to breath. All day, the sell orders overwhelmed the market as buyers stepped aside. Stocks tried to rally around 2pm but were banged down into the close.
Today had the feel of a program methodically swamping the market with sell orders. Someone is liquidating, and wants or needs out now.
The general tone is one of exhaustion and exasperation. People are generally worn out and resigned to the bear mauling. Several investors whom I spoke with today said they just wanted to chuck it all aside and walk away. The negativity is pervasive and overwhelming.
The S&P 500 is sitting right on support.
As is the New York Composite
The Nasdaq is still above support.
While the Industrials have broken through and hit new lows.
About the only good news is that this sell-off is occurring on lower volume than the sell-offs in October and November.
I am amazed that the action has been so horrible. I am not surprised that the market has fallen - remember, Running of the Bulls was short going into the sell-off. However, historically, bear markets are usually accompanied by violent bear market rallies.
For example, there were 40%-50% gains off near-term bottoms in stocks after the collapse of the tech bubble in 2000-2002. Even after the market crash in 1929, stocks rallied nearly 50% into 1930. But though stocks have undergone one of the most brutal sell-offs ever, such a rally has yet to occur.
I still believe that a significant bear market rally is coming. Whether the market will bounce off 740 on the S&P 500 or 540 however, I have no idea. I keep thinking a rally will happen soon, given the unremitting negativity I am hearing, but I thought the same thing two weeks ago when the market was 15% higher.
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