Buyers, Don’t be Shaken by the Sell-off

 (Photo credit: guccio@文房具社)

Kansas City, sept.26, stock trade .- Positive consumer confidence numbers before the bell led to a strong opening. But it was not to last as weakness in crude oil and a criticism of recent stimulus efforts from a Fed official turned the advance into the worst day for the S&P 500 in three months. A better-than-expected rise in July home prices held back some early selling, but end-of-quarter profit-taking and more European uncertainty probably had a negative impact.

At Tuesday’s close, the Dow Jones Industrial Average lost 101 points at 13,458, the S&P 500 fell 15 points to 1,442, and the Nasdaq was off 43 points at 3,118. The NYSE traded 755 million shares and the Nasdaq crossed 458 million. Decliners exceeded advancers by about 2.7-to-1 on both exchanges, but more importantly, an imbalance of selling volume at 9-to-1 signified moderately heavy institutional selling.

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The chart of the CBOE Volatility Index (VIX), also known as the fear index, shows that investors have moved from the slumber of complacency to wide-awake concern. With a rise in the index of 12% in just three days, traders are now alerted that a deeper correction could follow. ... Continue to read.

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