1:10pm (EST)
The bulls are putting up a small fight today as the market has bounced off its lows but the bears look to be in control again today. The Dow is currently down 39 points and is trading at 10,350 after touching a low of 10,297. The S&P 500 is lower by 5 ticks and is at 1,110 while the Nasdaq is off by 15 points to 2,250.
We spent a lot of time this morning talking about the current market conditions out here and in the Members Area. We figured we would see a little selling pressure at the open but we still remain optimistic that the bulls will make one last hoorah before the bears try to take us even lower.
One thing we want to point out is that we said last Friday we could get a 5%-10% correction. Well, if you take the Dow’s high of 10,763 on Tuesday and its current levels you get a 4% correction.
We also said we didn’t expect February to be a very good month for the market so our hope is that we get some kind of bounce next week. Normally when the CBOE Volatility Index (VIX 22.82, up 55) makes this kind of sharp reversal we know something is going on. The VIX was at 17-ish on Wednesday and has jumped over 30% in two days.
The VIX measures “fear” on Wall Street and is one indicator we like to follow to try and get a read on the market. High readings mean that Wall Street is nervous and bearish. A low reading indicates calm and the Street is bullish.
If the VIX is at 30 or more then it means the market is nervous. If the VIX is under 20, the market is confident. Well, at 17 the market was real confident which is why we said the market could be topping out.
We know things have not been good for the bulls over the last few days and the Financial stocks continue to get roped. Goldman Sachs (GS, $157.84, down $3.03) is down another 2% and will continue to be volatile from here on out. However, all things are pointing towards some type of relief rally next week before the bulls hand over the car keys.
A couple of earnings to watch for Monday will be Halliburton’s (HAL, $31.74, down $0.79) in the morning and Apple’s (AAPL, $203.90, down $4.17) numbers after the bell.
We will be back Sunday night with the Weekly Wrap and a fresh outlook on what companies will be making news next week.
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