Stock Market Rally Pauses as Markets Watch the Crisis in Ukraine

By: PhilStockWorld

Courtesy of Doug Short: Today’s major economic news, the Personal Income and Outlays for January and ISM Manufacturing, was of little interest to the market, which was exclusively focused on the crisis in Ukraine. Before the US markets opened, most Asian indexes had closed lower, and the selloff in Europe was worse. The EURO STOXX 50 index subsequently closed with a 3.02% loss. The S&P 500 opened lower and sold off to its -1.35% intraday low at lunchtime. Some buying during the afternoon trimmed the closing loss to 0.74%.

The yield on the 10-year note closed at 2.60%, down 6 bps from Friday’s close. The interim high was 3.04% at the end of 2013.

Here is a snapshot of today with a bit of Friday afternoon for context.

As we can readily see on a daily chart, today’s decline was much smaller than some of the selloffs during the January drawdown, and volume was relatively light.

Here is an updated look at the S&P 500 drawdowns (percent off highs) since the market bottom on March 9, 2009. I’ve highlighted the declines in excess of 5%. We’ve now reset the series.

The S&P 500 is now down 0.14% for 2014.

Here is a longer perspective, starting with the all-time high prior to the Great Recession.

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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