Morning Report – February 4, 2014
I doubt if many saw the extent of yesterday’s selloff coming. It was one of those days where fear of loss engulfed the market, and when the prior day’s low of 4068 on the NASDAQ Comp was broken, the floodgates seemed to open. The catalyst was the ISM report which was weaker than expected, and a market that was priced for perfection saw traders and institutions running for the narrow exit simultaneously.
The COMP closed down 2.61% for the day at 5.67% of its daily range. The carnage was worse in the small cap stocks with the SP 600 down 3% and the RUT down 3.2%, but the SP 400, the Mid Cap stocks were hit the worst, down 3.6% and closed at 1.34% of its daily range. The COMP is hovering around the critical support level of 4000 and closed at 3996.96. In spite of the terrible day, none of the indexes have reached the minor correction level of -8%. The DJI is closest to entering that territory at -7.3%. This is where the major indexes stand since the beginning of the year. The VIX is up 56.3%! Read full report