It isn't often that the bears manage to generate downside momentum, but they were able to continue pressure for a second day. The selling actually picked up a bit with breadth of 2,100 advancers to 4,650 decliners. Precious-metals stocks were clobbered but financial stocks outperformed as worries about higher interest rates kicked in again.
Negative reactions to central bank concerns never seem to last for long and what is particularly ironic today is that the IMF cut growth estimates for the U.S. economy. Once again, we are in the situation where the Fed seems to have a more optimistic forecast than the market does.
Technically, the indices are still in fairly good shape. They are holding the September lows but the wedging action into the 50-day simple moving average of the S&P 500 at 2168 is not pretty. The bears have an opportunity here but they have squandered such chances many times before.
Interestingly, there was some good performance in a number of key stocks I've discussed recently, including Weibo (WB) , Acacia Communications (ACIA) , Momo (MOMO) , TPI Composites (TPIC) , Sina (SINA) and Etsy (ETSY) .
When there are pockets of momentum such as these, it shows there is still a speculative appetite. However, if this shifts it can turn ugly very quickly.
The bears won the day but the bulls still have the edge.
Have a good evening. I'll see you tomorrow.