It Is Groundhog Day…Again

Like Bill Murray it feels like a bad Groundhog’s Day again as markets moved right back down in volatile, what I believe, is a descending spiral.

For bulls, just when you think markets are ready for a big time rally, (nearly 400 points higher just last Friday), bears moved back in taking charge once again. I further projected on just last week Thursday we could expect a counter trend rally in the S&P from 1902 to 1956. We hit 1940 on Friday and have fallen once again to close at 1904.

There wasn’t much in the way of economic data on Turnaround Tuesday but the focus remained on crude oil (down) and China (down). Crude oil fell sharply on the news that not much is going to happen with OPEC and others regarding lessening output. China meanwhile is dramatically increasing policies to forestall the inevitable—an economic collapse. Bloomberg details some of their market interference here and here.

Other news perhaps flying below the radar is the seriously weak state of the retail industry as featured in this article. And, what the hell and not to pile-on the bad news but the next linked article features a rundown of contemplated layoffs for the tech sector. Naturally, this doesn’t include other industries. And, it’s always good to remember layoffs are potentially good news for those companies unless you work there.

I’ve already provided too much negative homework, so let’s just go straight to the winners and losers this day.

Market sectors moving higher included: Volatility (VIX), Treasury Bonds (TLT), Utilities (XLU) and little else.

Market sectors moving lower included: Everything else.

Below is the heat map from Finviz reflecting those ETF market sectors moving higher (green) and falling (red). Dependent on the day (green) may mean leveraged inverse or leveraged short (red).

Volume rose on selling and breadth per the WSJ was quite negative.