GLOBAL STOCKS AND COMMODITIES FALL HARD -- SILVER LOSES 6% -- A LOT OF SUPPORT LEVELS WERE BROKEN -- AUSTRALIAN DOLLAR IS HARDEST HIT FOREIGN CURRENCY -- TREASURIES RISE WHILE CORPORATES FALL -- S&P 500 BREAKS CHART SUPPORT
COMMODITIES FALL HARD AS WELL ... Stocks and commodities both fell pretty hard today all around the world. Chart 1 shows the Commodities Tracking Fund (DBC) falling more than 2% to end back below its 50-day average. All commodity groups fell. The day's worst drop was seen in silver. Chart 2 shows Silver iShares (SLV) tumbling more than 6% on rising volume. Part of the commodity selling came from a stronger dollar. Most foreign currencies fell. The hardest hit was the Australian Dollar. Chart 3 shows XAD falling 1.6% to end below its 50-day line. That chart is similar to that of EAFE iShares (Chart 4) and Emerging Market iShares (Chart 5). Both broke their 50-day lines as well. Treasuries were the day's only winners. High yield bonds tumbled with stocks.
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Chart 1
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Chart 2
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Chart 3
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Chart 4
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Chart 5
TREASURIES RISE WHILE CORPORATES FALL ... Treasury bonds rose today as shown in Chart 6. Chart 7, however, shows Investment Grade Corporates (LQD) falling below its 50-day line on heavier volume. Chart 8 shows High Yield iShares (HYG) falling back below its 200-day line. That makes sense since high yield (junk) bonds trade more like stocks than bonds.
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Chart 6
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Chart 7
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Chart 8
STOCK INDEXES BREAKDOWN -- QQQ IS HARDEST HIT... Chart 9 shows today's drop in the S&P 500 breaking the lower support line in a "triangle" formation. That turns the short-term trend down. A test of its 50-day line is next. The hardest hit index was the Power Shares QQQ Trust (which mimics the Nasdaq 100). Chart 10 shows the QQQ falling below both moving average lines in rising volume. A 4% drop in the Semiconductor (SOX) Index was a big reason for that. From a charting standpoint, that appears to have ended the October rally. [Please see today's earlier message on longer-term stock market indicators that remain in negative alignment].
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Chart 9
