Stock Market Rebound Amid a Worldwide Selloff

By: PhilStockWorld

Courtesy of Doug Short: World markets were in selloff mode before the US market opened. The had Nikkei plunged 2.63%, the Hang Seng 2.20% and the EURO STOXX 50 was down approximately 1.25%, the level it closed at a few hours later. The S&P 500 opened fractionally higher and rose to a narrow 3-point trading range that lasted from late morning until the final 30 minutes of the day. The 0.78% intraday high at 1 PM was essentially reduced by half at the close bell, a gain for the day of 0.38%.

The yield on the 10-year note closed at 2.82%, down 6 bps from Monday’s 2.88% close, which was the interim high since the historic closing low of 1.43% on July 25th of last year.

Here’s a 10-minute look at the week so far. I’ve highlighted today’s 50-day moving average, which, coincidentally enough, was near the top of that narrow 4-hour trading struggle.

A daily chart gives a better look at the 50-day price MA over time. We also see that today’s battle at the key moving average didn’t trigger a significant surge in trading volume. While the volume was a bit higher than yesterday, it was still 14% below its 50-day MA (compared to -21% yesterday).

The S&P 500 is now up 15.86% for 2013 and 3.35% below the all-time closing high of August 2.

For a better sense of how these declines figure into a larger historical context, here’s a long-term view of secular bull and bear markets in the S&P Composite since 1871.

- Phil

www.philstockworld.com

Philip R. Davis is a founder of Phil's Stock World (www.philstockworld.com), a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders. Mr. Davis is a serial entrepreneur, having founded software company Accu-Title, a real estate title insurance software solution, and is also the President of the Delphi Consulting Corp., an M&A consulting firm that helps large and small companies obtain funding and close deals. He was also the founder of Accu-Search, a property data corporation that was sold to DataTrace in 2004 and Personality Plus, a precursor to eHarmony.com. Phil was a former editor of a UMass/Amherst humor magazine and it shows in his writing -- which is filled with colorful commentary along with very specific ideas on stock option purchases (Phil rarely holds actual stocks). Visit: Phil's Stock World (www.philstockworld.com)

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