Gold and oil are down today as well.
At the end of the day, look for all of this to be connected to some exogenous event in the news. People get paid to make that stuff up. Be skeptical. As weird as it seems, the market moves to its own rhythms, and the invisible hand belongs to Fibonacci. 1190.68 is within a point of 1189.78, the .786 retracement of the drop from the 8/17 intraday high of 1208.47. What's so special about .786? It's the square root of .618, the golden ratio. Why should that number have any significance? Beats me. But when there is a steep retracement, beyond the .618 level, that is a pretty typical stopping place. I only observe and report. More at the end of the day. It should be very interesting.
Update: Not so interesting after all
Gold rebounded and wound up positive for the day. Oil gyrated and wound up slightly negative.
I'm taking the SP500 low of 1155.47 at 12:53 to be the end of the low level impulse wave (1) that started with the early morning slide from 1190.68. Since then the index has bumped its head against 1166-1167 four times, and bounced back down each time. This is a very messy looking wave (2) which might have ended with the last bump at 3:21 this afternoon. On the 5 day interactive chart at Yahoo Finance, MACD peaked early yesterday morning, made a lower peak at today's early top, and has slumped badly since. I'll wait till tomorrow to post a chart here.
Evidently a lack of newsworthy events allowed stocks to slide today - as if it takes good news to buoy them up, and Bernanke's impending speech tomorrow will be the savior of equities - or not. With a hurricane out there, Libya toppling, Europe extending the bans on short sales, and Harrisburg, PA in the red, this strikes me as a failure of imagination.
Nevertheless, “Headlines are making stocks jump quite precipitously,” said Sal Arnuk, co-manager of trading at Themis Trading. “However, the real action will be watching Bernanke tomorrow.” Investors are looking ahead to Fed Chairman Ben Bernanke's Jackson Hole speech on Friday, in hopes that he may announce some form of monetary policy to help support the U.S. economy.
Yeah. Well, good luck with that.
Update 2: News is what does it, fer sure!
Zemsky expects to see more big swings as long as the fear of recession hangs over the market. "People are trying to adjust their positions to news," he said. "Once it's clear where the economy is headed, I think things will calm down."