Selling continued on Monday lead by the Russell 2000 and NASDAQ Composite indexes. CAT earnings release and subsequent move helped the Dow Jones Industrial Average from losing further steam. Volume ended the day lower across the board despite the plunge to new lows during lunch time. VIX jumped once again, but it finished well off its high after an intraday rally. We remain on shaky ground as plenty of growth names took it on the chin today a clear sign there is some panic in the market. Whether it is the Federal Reserve or China something has spooked market pundits and perhaps investors too. We are simply going to go with the flow and after being quite long since July. We expect to give back some gains as picking exact tops in the market is simply foolish. We are certainly in neutral mode here and if selling continues we’ll follow the market.
Ben Bernanke’s last Federal Reserve meeting kicks off tomorrow and it will be interesting to see how history will treat him. It is safe to say many do not speak glowingly about Alan Greenspan. Mr. Bernanke’s legacy will likely be defined 5-10 years from now when we know the true outcome of the massive quantitative easing program he lead after the collapse of the housing market. Let’s take a moment to remind everyone it was the housing collapse Bernanke did not see that lead to the massive bond buying program. Wednesday we’ll say good-bye and with that many participants are hoping the reaction to whatever the Fed says will be like 12/18.
On the earnings front AAPL reported earnings after the bell. At the moment a few minutes after the release the stock is trading lower by 3 percent. A pretty sharp drop for a large cap stock and it will not help out the NASDAQ tomorrow morning. Perhaps this headline is a catalyst:
*APPLE SEES 2Q REV. $42B-$44B, EST. $46.10B
Revenue guidance was not up to snuff and while it may be the reason the action right now is not a good one.
Not a great way to start the week and with some “headline risk” later this week anything is possible. Stick with the process and keep pushing forward.
