As assumed yesterday, it looks like yesterday's late day 'rally' was just short covering and nothing else. This morning futures are taking back all those gains from the last 30 minutes or so, and the S&P 500 looks set to open below that very strong support of 1120. Hence we will be out of the 100 or so point range that the S&P 500 has been in for over 2 months.
While the action has been horrid since The Bernank gave us his Twist Wednesday afternoon, we are not quite at extreme oversold levels yet. The percent of S&P 500 stocks below their 50 day moving average is also at an oversold levels, but we've seen some cases where it can get worse.
The action this afternoon will be interesting because I will be interested to see whom wants least to own positions over the weekend - bulls or bears. Also it will be interesting to see if this 1100 level holds as we are selling off on the same news each day, so we'll see when the market gets fatigued from reacting to the same data points. Also we should begin to hear all sorts of rumors of interventions and bailouts... which is why its very difficult to be a bear.
Yesterday a reader commented a coal company I have not looked at in a while - Alpha Natural Resources (ANR). I was shocked by the stock price (from $60 to $20 since May!), as I tend to focus on relative strength so the whole commodity complex has not been showing up in my stock screens the past few months. This type of name is almost all the way back to March 2009 lows!
And it's not the only one. So clearly the cyclical type of stocks are singing a very different tune than the Chipotles or Amazons. The divergence is stark.