Stock Market Selloff Accelerates

By: PhilStockWorld

Today the S&P 500 logged its 11th decline in the 14 sessions since the index hit its all-time high on September 18th, and today’s was the biggest decline — a loss of 1.23%. The index opened fractionally lower and bounced to its 0.04% intraday high in the first 30 minutes of trading. Selling then dropped the 500 to the vicinity of -1.0% as the President began his live address shortly after 2 PM (full text here). Despite his rigid stance and stern warnings about a potential default, the index traded sideways until the final hour, when a head fake to the upside was followed by a slide to its -1.23% close.Stock Market Selloff Accelerates

Here is a 5-minute chart of the day with a bit of yesterday afternoon for context.

Here is a two-hour chart since late August illustrating the march to the all-time high and the subsequent stages of selling. I’ve highlighted three phases: 1) the modest 2.53% decline from the high to the end of September, 2) the relative stability of the first four days of shutdown, and 3) the 2.07% slump so far this week.

Interestingly enough, today’s 2.66% closing yield on the 10-year note is the same as the close at the end of the first day of the shutdown.

Here is a daily chart of the S&P 500. Volume was 13% above its 50-day moving average. Yesterday it was 13% below the MA.

The S&P 500 is now up 16.07% for 2013 and 4.06% below the all-time closing high of September 18.

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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