Stocks defied higher ticks in the futures market this morning by selling off sharply from the open. The damage, as usual, was focused in the tech arena. The Nasdaq 100 slipped about a percent on the session, with components such as Apple, Applied Materials, Dell, eBay, and Research in Motion all feeling the pinch. The broader S&P 500 only lost about a half percent. It is interesting to note that as heavy as the action has felt recently, the SPX is less than 10 points off its high. If some selling pressure could come in and push this index down through 1400, it would be very encouraging for us bears. The big question in this process is at what point does everyone start trying to get out ahead of everyone else? In the meantime, we continue to have to be very selective in our trades.
Energy and precious metals threw us some nasty curves with nice pops that melted down as the session wore on. Oil was initially a percent higher, but continuing liquidation in this sector drove it to a loss of equal magnitude. Metals more or less followed oil's lead. In the early going, with silver surging over the $13 mark and shares of Newmont Mining appearing to bust out of a basing pattern, I chose to enter a long position on NEM for a break out move. The trade failed, and I was stopped out mid-way through the day.
With the reversals, these commodities leave themselves open to some nasty capitulative selling, and I plan to tread very lightly in coming days.