I think we all suspected that the S&P’s return was driven by a small number of stocks but, only four? See PIMCO’s piece here:
From Ben’s piece on the oil market:
“Today’s wild ride in crude saw price plunge below the 29.00 handle in the lead March contract, trading to a new contract low at 27.56. ”
From Futures Magazine today:
“Last Friday, January 15, 2016, the SPX broke below its Aug. 24, 2015 low, which is equivalent to a major sell signal if price closes the month below that level.
Last week, The Dow Jones Industrial Average slumped 511 points, or 3.1%, to 15,866, while the S&P 500 slid 64 points, or 3.4%, to 1,856.34, led by the financials, technology and energy sectors. The Nasdaq Composite tumbled 190 points, or 4.1%, to 4,424.35.”
A couple excerpts from Friday’s Mr. TopStep’s morning Opening Print:
“China continues to dominate the news headlines and the algorithmic and HFT trading programs have done a great job of exploiting the price action in the S&P futures. For the second time this week the Chinese government shutdown it’s main stock index, the Shanghai Composite down two days in a row, down ‘limit’ at -7% each day. Yesterday the Chinese announced that they would be removing the circuit breaker and after the S&P futures fell sharply overnight down to 1930 there was more than a 30 handle rally back up to 1969.00 but quickly reversed when crude oil fell to a new low. The VIX never sold off as the S&P futures rallied and after the rally the ESH15 sold off all the way back down to 1932.50 around 1:30 CT. It was a wild day of ups and down and it doesn’t feel like the jump in volatility is going to subside anytime soon.”
“China caused several letdowns in 2015 of which the S&P recovered fairly quickly after. While we understand the gravity of the problem and the overall weakness in the stock market, we cannot rule out some type of bounce. One of the things that I cannot abandon is how resilient the US stock markets and the S&P 500 has been as a whole. As money moves out of an overseas market it has to go somewhere, right now the S&P 500 is still the best place to put your money especially after big decline when everyone gets bearish. I still don’t feel overly negative or overly positive about either direction. It’s just too early in the year and there is just too much volatility.”
As always, a good read. Click here for full piece.