December 29, 2012 at 11:11 AM EST
Here’s why yesterday’s market action was ugly!
Saturday, December 29, 11:00 a.m. After holding up so impressively over recent weeks as the new year and all its potential problems approached, the market finally showed some fear yesterday. The Dow closed down 158 points, or 1.2%. The S&P 500 closed down 1.1%. The Nasdaq closed down 0.9%. A 1% move isn’t much as [...]

Saturday, December 29, 11:00 a.m.

After holding up so impressively over recent weeks as the new year and all its potential problems approached, the market finally showed some fear yesterday.

The Dow closed down 158 points, or 1.2%. The S&P 500 closed down 1.1%. The Nasdaq closed down 0.9%.

A 1% move isn’t much as volatility goes. It was more the sudden dive at the close, with no typical attempt by the big firms to mitigate the decline going into the weekend.

Perhaps it was only institutions closing out positions before leaving for the holiday-shortened week with so many uncertainties coming over the next few days. It didn’t seem to be a wholesale bailout as trading volume on the day was very low at just 0.5 billion shares traded on the NYSE.

However, after the cash market closed there was a worrisome big further plunge in the futures market, with S&P 500 futures plunging another 1.5%. Of course, that can change significantly before the market opens Monday morning. But still.

Fear even finally began to show up in the VIX Index (aka the Fear Index) yesterday.

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Yesterday’s plunge shows up on the long-term charts as only a minor blip. But could the arrival of fear be the beginning of something more serious?

122912g

It will depend on politicians in Washington, and that is a legitimately scary situation.  

To read my weekend newspaper column click here: It’s Only A Fiscal Slope Not A Cliff!

Subscribers to Street Smart Report: There are important intermediate and short-term charts and recommendations in the ‘premium content’ area of this morning’s blog. (The next issue of the newsletter will be out on Thursday).

Yesterday in the U.S. Market.

A nervous and negative day from the open on continuing concerns about the fiscal cliff talks. Volume remained light, with only 0.5 billion shares traded on the NYSE.

The Dow closed down 158 points, or1.2%. The rest of the market was not quite as negative.

The Dow closed down 158 points, or 1.2%. The S&P 500 also closed down 1.1%. The NYSE Composite closed down 1.0%. The Nasdaq closed down 0.9%. The Nasdaq 100 closed down 1.0%. The Russell 2000 closed down 0.6%. The DJ Transportation Avg. closed down 0.8%. The DJ Utilities Avg closed down 0.9%.

Gold closed down $7 an ounce at $1,655.

Oil closed up $0.13 a barrel at $91.00 a barrel.

The U.S. dollar etf UUP closed up 0.1%.

The U.S. Treasury bond etf TLT closed up 0.6%.

Asian Markets closed up in their last session of the week.

The Asia Dow closed up 0.6% Thursday night (Friday in Asia).

Among individual markets:

Australia closed up 0.5%. China closed up 1.5%. Hong Kong closed up 0.2%. India closed up 0.6%. Indonesia closed up 0.8%. Japan closed up 0.7%. Malaysia closed up 0.5%. New Zealand closed up 0.4%. South Korea closed up 0.5%. Singapore closed up 0.3%. Taiwan closed up 0.7%. Thailand closed down 0.4%.

Yesterday in European Markets.

European markets closed down. The London FTSE closed down 0.5%. The German DAX closed down 0.6%. France’s CAC closed down 1.5%. Italy closed down 0.8%. Spain closed down 1.8%. Greece closed down 1.2%.

Global markets for the week.

An ugly week in the U.S., and fractionally negative in Europe, but the favorable season rally continued in Asia.


THIS WEEK (December 28)
DJIA12938- 1.9%
S&P 5001402- 2.0%
NYSE8316- 1.5%
NASDAQ2960- 2.0%
NASD 1002606- 2.2%
Russ 2000832- 1.9%
DJTransprts5220- 2.2%
DJ Utilities446- 2.4%
XOI Oils1,216- 2.9%
Gold bull.1,655unchgd
GoldStcks160.6+ 0.2%
Canada12316- 0.6%
London5925- 0.2%
Germany7612- 0.3%
France3620- 1.1%
Hong Kong22666+ 0.7%
Japan10395+ 4.6%
Australia4685+ 1.1%
S. Korea1997- 0.9%
India19444+ 1.1%
Indonesia4316+ 1.6%
Brazil60952- 0.1%
Mexico43720+ 0.2%
China2338+ 3.7%
LAST WEEK (December 21)
DJIA13190+ 0.4%
S&P 5001430+ 1.2%
NYSE8443+ 1.3%
NASDAQ3021+ 1.7%
NASD 1002664+ 1.4%
Russ 2000848+ 2.9%
DJTransprts5340+ 3.0%
DJ Utilities458+ 1.5%
XOI Oils1,252+ 1.2%
Gold bull.1,655- 2.4%
GoldStcks160- 2.7%
Canada12385+ 0.7%
London5939+ 0.3%
Germany7636+ 0.5%
France3661+ 0.5%
Hong Kong22506- 0.4%
Japan9940+ 2.1%
Australia4635+ 0.9%
S. Korea1980- 0.8%
India19242- 0.4%
Indonesia4250- 1.4%
Brazil61007+ 2.4%
Mexico43621+ 1.3%
China2254+ 0.1%
PREVIOUS WEEK (December 14)
DJIA13135- 0.1%
S&P 5001413- 0.3%
NYSE8333+ 0.2%
NASDAQ2971- 0.2%
NASD 1002628- 0.4%
Russ 2000823+ 0.2%
DJTransprts5186+ 1.1%
DJ Utilities451- 0.6%
XOI Oils1,237+ 1.0%
Gold bull.1,695- 0.5%
GoldStcks164+ 1.6%
Canada12296+ 1.1%
London5921+ 0.1%
Germany7596+ 1.0%
France3643+ 1.0%
Hong Kong22605+ 1.9%
Japan9737+ 2.2%
Australia4595+ 0.9%
S. Korea1957+ 1.9%
India19317- 0.5%
Indonesia4308+ 0.4%
Brazil59604+ 1.9%
Mexico43050+ 0.6%
China2252+ 4.4%

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Next week’s Economic Reports:

In spite of it being another holiday-shortened week, there will be a number of potential market-moving economic reports including the ISM Mfg Index, Construction Spending, the minutes of the Fed’s last FOMC meeting, and culminating with ‘The Big One’ on Friday, the Labor Department’s monthly employment report for December. To see the full list click here, and look at the left side of the page it takes you to.

To read my weekend newspaper column click here: It’s Only A Fiscal Slope Not A Cliff!

NOTE: There will be no blog post next Tuesday, New Year’s Day! The next blog post will be on Thursday morning, and the next issue of the newsletter will be out on Thursday afternoon.

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