With a big gap down and a very gloomy sentiment conditions were good for a snapback attempt but the bounce faded at mid-day as trapped longs flipped into the strength and sent the indices back to the lows. Selling into strength has been the markets biggest problem lately and it tends to feed on itself as bulls grow increasingly frustrated with a market that can't find any upward momentum.
The odds favor some positive action in the days surrounding the Thanksgiving holiday but to say that the buyers are skittish would be an understatement. Fundamentals simply do not matter right now. Good earnings news is aggressively sold as we saw with Kohl's (KSS) today and valuations are irrelevant.
Traders are typically optimistic about some good "holiday" trading opportunities around Thanksgiving and it may be good that they are not feeling so upbeat this time. The positive nature of the day before Thanksgiving is well known but the bulls couldn't even manage some upside into the close.
There are some signs of bottoming action as names like Nvidia (NVDA) and Facebook (FB) finally managed to bounce but breadth was around 1,325 gainers to 5,900 decliners and there were nearly 1,000 stocks hitting new 12-month lows. That may give us some extreme negativity but there sure are many badly broken stocks.
Technically the S&P 500 tested its October closing lows. That is something the textbooks look for to help determine a bottom but there isn't any guarantee that low will hold from here.
Stay cautious, don't be in a rush to buy into the teeth of a decline and wait for stock picking to start working. The good news is that eventually this action is going to lead to some great opportunities.
Have a good evening. I'll see you tomorrow.