More Selling...so what is next ?

From the opening minutes the market was under pressure. Stocks opened lower and continued their decline throughout the day. The market made a serious of lower lows throughout the day and finally bottomed during the last hour. During the last 45 minutes stocks managed to pare back some of the earlier losses but all of the major averages closed solidly in the red.

The Dow closed down 129.91 points and the S&P was down 1.68 %. (- 1.54 % and - 1.68 %)

Not much happened today on the economic front. The only report released was the weekly jobless claim report. A total of 631 thsd people filed for first time unemployment benefits last year. The consensus forecast had been for a total filing of about 625 thsd...so the number was slightly larger than expected.

You know my take on the weekly jobless claim number...by itself it is to volatile and lacks in its ability to offer a deep insight as to what is going on in the economy. So...my take is the same as it has been the week before. The US economy is shedding jobs at a rather alarming rate and as such the current situation is just not good. Continued claims around 600 thsd are to big of a number as to leave anybody under the illusion that things are getting better in corporate USA.

Perhaps the best news of the day was that losses were pared back during the final hour. This at least suggest that we are not getting ready for a full fledged major sell off. Any decline should as such be somewhat orderly.

As I mentioned yesterday...I am now short / bearish stocks and expect further losses. Only a close above 8600 would change my opinion.

We bounced off the lows from last week...at least temporarily slowing the decline. A brake through the lows from last week would signal that further losses are likely and we should then see at least 7950 in the Dow.

Tomorrow's trading session should be a bit more subdued. The Memorial Holiday weekend is coming up and activity levels should fall back for tomorrow.

Let's see what happens,

Steve Benger