Stocks fell again on Wednesday, and that's the 7th negative day in a row for the S&P 500. The losses are not huge, but they are adding up. The Dow lost 77-points but is still only about 3.5% off of its all-time high. The election uncertainty is taking it's toll and while there are sellers out there, it seems to be a lack of buyers that is keeping stocks down.
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The Fed didn't have much to add except that now investors are putting the odds of a December rate hike at about 70%. Not exactly what investors want to hear in a sluggish economy with stock prices falling.
I was actually away from my office yesterday and didn't watch the action so I don't have much of a feel for what happened so I will make this short, but it doesn't take a genius to see that stocks were down, they are in a short-term downtrend now, but the Dow and S&P are trying to hold above the important 200-day EMA. The small caps continue to get hammered.
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The SPY (S&P 500 / C-Fund) slid another 0.6% yesterday and it is still floating just above the 200-day EMA. A bounce here would seem likely, even if it is just a temporary relief rally, but the question is, with the election less than a week away, will anyone be buying into the market beforehand?
The more volatile DWCPF (S-fund) has already fallen below its 200-day EMA and yesterday's losses filled a very tiny gap just above 1030 but that probably wasn't technically significant - although there is a big gap down near 990 that has got to get your attention. I'm not saying that will get filled any time soon, but if we're turning the tide into a more bearish market it could be heading in that direction over the following weeks.
Thanks for reading. We'll see you back here tomorrow.
Tom Crowley
Posted daily at www.tsptalk.com/comments.php
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