Market Smackdown Into Turkey Day

Ouch, nobody wanted to be holding anything going into Turkey Day. Once again, it was all about European headlines; specifically the German debt auction that wasn't as strong as usual. Domestically, we had a deluge of data. In summary, the data was ok, not great, not horrible, just middle of the road.

The market didn't fair too well closing down >-2%. Volume was light once again and all 4 of the major indices (S&P, DOW, NASDAQ, RUSSELL) remain below their lower Bollinger Bands reflecting a very oversold condition in the short term. All 4 closed on major chart support after the beatdown today.

I have been surprised at the magnitude of the decline but it has not been panic selling. The VIX has not exploded higher during the last 6 days straight down for the market which indicates the lack of panic selling - this is a good thing. Volume has also been light with such a pullback - another sign of non-panic selling.

I have actually been selling way OTM put spreads into this decline. In fact, I opened another one today on the Russell 2k (the Fill Report is contained in the Portfolio Update sent only to subscribers). Mind you, my spreads are WAY OTM so I am not too worried at this point. A bounce, even if only the dead-cat variety, will happen shortly and that will tell the tale of whether the selling is over and we run into the end of the year or not.

Happy Thanksgiving everyone!!!!

Navigate wisely and stay profitable, my friends. Happy trading!

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