Jerry Samet
03-12-2020, 06:25 PM
The bottom really fell out today. Fear about the spread of the coronavirus caused a wave of selling as more workplaces and public events shut down. The major averages gapped lower at the open and trading halts kicked in after just a few minutes. All the major averages closed at or very near the bottom of their intraday trading ranges as nobody wanted to buy. The losses were pretty evenly divided with the COMPQ and the NDX losing 9.47% and 9.27% respectively. The SPX fell 9.51% The INDU declined 9.99% for its worst percentage loss since the 1987 crash. Volume was much higher across the board. It gained 32.01% on the New York and 23.10% on the Nasd. This shows that large institutional players were selling stocks heavily. Leading stocks were hard hit as well with the leaders index falling 11.20%. The index closed low in its trading range on huge volume. The selloff continued today as the market has not been overwhelmed with the policy responses proposed so far. The decline today took all the markets well into bear market territory. There was forced selling all over the place today as all asset classes saw large losses. The margin calls going out must be huge so people are selling any position they can get a decent bid on. It is amazing that we have had a significant bear market in sixteen trading sessions. Right now it is hard to see a bottom as the severity and duration of the declining will be determined by the course of the virus. That we can’t know now. I don’t think we can see a really meaningful bottom until we see some light at the end of the tunnel of this whole mess. Jerry