Last week’s selling was relentless, with every rally failing quickly, followed by selling. Even the 1.8% gain in the S&P 500 last Thursday was not enough to stimulate more buying, and it dropped back 1.7% on Friday. Worst-hit was the Dow Jones Transportation Average, losing 4.53% for the week.

The S&P 500 did not do much better last week, as it was down 3.94%, just slightly worse than the 3.59% drop in the Nasdaq 100, as several of the tech giants were hit with heavy selling after they reported earnings.

Tom Aspray – ViperReport.com

As the table indicates, even the Dow Jones Utilities lost 2.22% for the week, and is now just barely higher for the year. The Utilities Sector Select (XLU) currently has a yield of 3.4%, well above the yield on the 10-Year T-Note. Only the Nasdaq 100 is showing a decent YTD gain of 7.13%, in spite of the fact that it is down over 10% this month.

Tom Aspray – ViperReport.com

So far in the October, the S&P 500 is down 255 points (-8.7%), but the month is not over yet. The monthly chart of the S&P 500 shows that it is still above the rising 20-month EMA at 2621. Despite the severity of this performance, historically, this does not make the list of the Top Five worst monthly performances in the S&P 500.

That award goes to Oct. 1987 (1987-10), when the S&P was down 21.78%. The chart goes back to 1998 when the S&P 500 was down 14.58% in August. The current situation looks the most like 1998, when the S&P eventually rebounded to make new highs by the end of the year. In October 2008, during the last bear market, the S&P lost 16.94%. The declines in 1973 and 1974 occurred after the stock market had already completed a bull market top.

According to the latest survey from the American Association of Individual Investors (AAII), investors are getting more nervous, but still, 28% are bullish, down 6 points for the week.The bearish% has risen to 41%, also a change of 6 points. Long term readers may remember that the bullish% has frequently been significantly lower at major corrections lows.

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