A rough day following the recent run-up in prices, which largely went unchallenged. Dow fell 283, decliners over advancers 4-1 & NAZ pulled back 45. NYSE volume was 1.65B, a little higher than a former average around 1½B. The VIX (volatility index) rose 2.22 to 23.53, very high. It seemed like everything went down (4-1) but banks took the lead plunging 20 or 6.7% on the Bloomberg-S&P Financial Index. Another way to look at it was it lost 25% of its recent run-up from the lows. Bank of America (BAC) after gaining 15 from its low in the last week was down 2.80 to 30.64 (shown in the right widget). Banks were clearly overbought but gloomy news on housing & autos (from Ford) brought on more selling today bringing heady markets back to reality. These industries are going thru a severe recession.
Oil rose 1 to 125½ on the usual assortment of news/rumors. But the idea that there is less driving in the US is getting more attention among traders. MLPs pulled back. The Alerian MLP index dropped almost 3 (1%) to 264s, flirting with 262, the 52 week low reached last week. Following up on my prior discussion on MLPs, a report from TradingMarkets Research gives very good insights on how these companies keep slipping in the face of optimism about oil & gas. However, I still like them because of high yields which are largely not taxed.
Today's reality check will probably continue tomorrow.
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