Markets began the week with a whimper with the Nasdaq and S&P 500 dropping by 1.6% and 1.78%. Both benchmarks undercut their 50 day SMAs and have lost ground for 4 consecutive sessions. All of the last 4 days have finished in the lower half of the intraday trading ranges, a bearish sign. Looking back at the beginning of 2014 both aforementioned indexes fell for the first 3 sessions of the year, and many prognosticators like to evaluate the first 5 trading days of January to give them clues as to where the averages may be headed. No sector was immune from the pain Monday with all major groups finishing in the red. The worst of the lot was energy, which did not surprisingly find a bid at the very round 50 handle. The group was torpedoed by better than 4% to the downside, and as we hear incessantly how this is a favorable development for the US consumer, it also speaks volumes to the fragility of the world economy. The “Black Gold” commodity is not the only one giving conformation as to the softness abroad especially with Europe and China. Steel and copper are throwing up red flags as well. Names like X and STLD are lower by 45 and 27% from their recent 52 week highs. FCX lost 6% Monday and is lower by 43% from highs made back last July. Moves like these speak volumes and buckle your seat belts as 2015 is looking to be a wild ride.
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