It was a very ugly start to the new quarter. I wish it was an April Fool’s joke. Unfortunately, it appears that with headlines getting worse and worse, we are likely destined to test the lows we saw a couple of weeks ago. I’ve mentioned, that to find some foundation after a move like the one we’ve had, the previous lows have to be tested. They may or may not be tested, and they may or may not hold if we get there. But, the main idea here is that it is likely to take some time to sort all of this out. Indeed, we have no idea how long the country will be shut down. Until that becomes more clear, traders are simply trading in the dark.
As for today, as I mentioned, it wasn’t pretty. By the close, the Dow Jones Industrial Average was down 973 points to close at 20,943. The S&P 500 was down 114 points to finish the day at 2,470. Gold was up $5 to trade at $1,602 per ounce, while oil was up $.23 to trade at $20.71 per barrel WTI.
The good news today is that bonds, gold and oil all traded up a bit. When we were in the melt down/liquidation phase everything was going down together. It makes sense that treasury bonds would be bought while stocks were being sold today. So, at least the mechanics are working as they should (albeit with a little help from the Fed). Unfortunately, market participants just didn’t want to buy stocks today. Let’s see what tomorrow has in store.
Have a nice evening everyone.