Stock Market Stampede

It finally broke. It finally happened. I figured it was coming when I heard of bears covering there shorts because they were getting so frustrated. I honestly did not think it would happen today. I figured the market would sit right atop 1360 waiting for the jobs number. Well it broke and broke hard. Despite the stock market sell off credit spreads also gapped out. It was an ugly day.

Despite the sell off volume was not that high showing a lack of panic selling. Volume was 1.3 million on the big board which was strong compared the last few weeks but low compared to some other major sell offs. The VIX spiked hard and I still say this was the tell tell sign on Tuesday when the market screamed higher and the VIX did not fall that things were turning.

The market is realizing that the commodities crumbling is not really a good thing and unlike the decline in previous markets there is not a sector that is picking up the slack. It used to be while the market moved down 200 points at least ag or energy or metals were up. Now you don't have anything helping out the indexes creating a meltdown of massive proportions. This has the potential of really snowballing but like every other time something happens to catch it. The worry of course is that is being beaten into the brain as a conditioning mechanism that will cause investors to enter right at the wrong time.

The U.S. has a ways to catch up as the international markets have been selling off for four weeks Also small caps have outperformed like champs. This can't continue either. What is unclear is how financials will perform. I am not sure they lead the market lower this time around though they got slaughtered today.

The jobs number is tomorrow and the conspiracy theorist in me makes me think it will be much better than reality leading right up to the election. We shall see. Either way we finally broke and I don't think we are headed back to 1300 anytime soon in the S&P.