9:00am (EST)
The bulls and bears each had their 15 minutes of fame on Tuesday but it was the grizzlies who got the better of Wall Street.
Following a 3-day weekend, the bears were back in the driver’s seat as they won their 3rd straight session as more concerns from overseas helped drag the market lower. Of course, the global reaction on the U.S. jobs front from last Friday had a lingering affect to start yesterday’s trading but more protests in Italy and the nation’s pending austerity measures also caused some nervousness.
Futures were already pointing towards a nasty open and we knew once the market started trading our downside targets would be tested. In fact, with futures spiraling out of control before the bell on Europe’s selloff, the NYSE actually invoked Rule 48 which could have led to a delayed open or “reopening” on a halt. This is usually done to speed up and help facilitate trading during highly volatile days. However, things went smooth so the story was never really mentioned by the talking heads.
The Dow easily took out the 11,000 level at the start of trading and fell to a low of 10,932, down 306 points, within 15 minutes. The blue-chips surged to the upside in the final 15 minutes of trading which helped cut the losses to less than half but the index still fell 100 points, or 0.9%, to end at 11,139. We mentioned strong support at 10,800 which remains support if 11K doesn’t hold while 11,200 then 11,350 are near-term resistance levels.
Side Note: The Financial stocks got hammered and have backed off their recent highs. Two blue-chippers, Bank of America (BAC, $6.99, down $0.26) and JPMorgan Chase (JPM, $33.44, down $1.19), each fell aver 3% and are either getting “attractive” again -or- there is more damage to be done. We are trying to get BAC into our Weekly Wrap portfolio for $5 (or less) but still don’t see the rush to add the stock. However, it’s great for day trading…
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