Here’s a good article from perhaps the last noteworthy bear still standing. Could it be that he called the top? . The week certainly was not a happy one for momentum investors or even the buy-and-hold crowd. The thing is, we’ve seen sell offs of this magnitude many times before only to have stocks come roaring back on the power of credit and hope. The VXO fear gage rose over 25% while stocks lost about 2.5%. While that’s nothing to sneeze at, it’s not really that big of a move.
Monday, stocks in Asia fell a rather moderate 0.5% while the Nikkei sunk 1.7% to take it well below the 15,000 mark. In Europe and the U.S., fear was stronger with stocks dropping 1.3% and 1% on low moderate volume and the VXO moving up another 6% to close at 14.25.
Tuesday, stocks showed little change in Asia and fell slightly in Europe. In the U.S., stocks rose 0.5% on low volume. Gold rose about 1% to again to retake the 1300 level while precious metals miners gained about 2%. Wednesday stocks in Asia closed nearly unchanged. They rose Europe 0.4% and 1% in the U.S. on low volume. The VXO plummeted nearly 10% to close at 12.64 as the minutes from the latest FOMC meeting cheered bulls. It was a day for turkey stocks as Facebook rose 7.25% and IBM rose 1.7%.
Thursday, stocks in Asia rose 0.5% while in Europe stocks fell the same amount. In the U.S., stocks were down 1.8% on low moderate volume as the VXO crashed 23% to close at 15.55. Friday, stocks fell in Asia 0.9%, in Europe 1.4%, and in the U.S. 0.8% on moderate volume. The VXO continued its descent — dropping another 10% to close at 17.19. Notably, the NASDAQ closed ticking just below the 4000 mark as the Dow and S&P dropped to within striking range of major round-number levels.