Stock Market Viewpoint

Stock Market Viewpoint
Reading the Tea Leaves...

Tuesday, August 27, 2013

Market Becoming Sensitive To Any Bad News

Stock Market Technical Analysis Blog

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In the market today we had a big gap down as the channel push downs I focused on yesterday followed through.  The drop was amplified by Syria worries.  This really isn't a fluke though because as the market enters its middle stage of a correction it becomes very sensitive to any bad news that hit the headlines.  Currently there is a list of worrying situations that will probably take turns appearing in the daily headlines:
  • deteriorating breadth and other market internals
  • worsening economy because of consumers pulling back exemplified by the dire outlooks in the Walmart, Target, and Macys earnings reports
  • new home sales plummeting because of the spike in interest rates
  • worries about the Syria situation
  • the approaching debt ceiling fight
  • worries of tapering beginning in the fall
  • sudden rush to gold instead of equities
  • AAPL finding resistance at the 500 level when earlier in the year this level was a support
  • heightened fear of a flash crash because of HFT reaching the 75% level

The stock market's heightened sensitivity to bad news is one of the biggest reasons to get out of stocks immediately when the VIX gets to the 12.00 level, as I called out on my 8/2 blog, thereby, preventing yourself from exposure to anything the news media decides to put in the headlines that day.

Trade well my friends


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