Stock Market Renewed Selling on Russia Sanctions Showdown

By: PhilStockWorld

Courtesy of Doug Short: From a market perspective, this morning’s plunge in new jobless claims was trumped by mounting tensions over sanctions against Russia and Putin’s sanction reprisal. The S&P 500 hit its 0.45% intraday high moments after the open. It then sold off in a couple of waves to its -0.81% intraday low shortly after 3 PM. Some buying in the final hour trimmed the day’s loss to -0.56%.

The yield on the 10-year Note closed at 2.43%, down 6 bps from yesterday’s close — the lowest since June 2013.

Here is a 15-minute chart of the past five sessions. The S&P 500 is up 3.31% year-to-date and down 3.94% from its record close on July 24th.

Here is a snapshot of the VIX volatility index back to December 2012. I’ve highlighted the 20 level, a round number traditionally associated with increased anxiety. There have been four VIX peaks over this timeframe. The recent intraday high of 17.57 occurred on August 1st.

Today’s volume was moderate as the index closed below its 100-day price moving average.

A Perspective on Drawdowns

The chart below incorporates a percent-off-high calculation to illustrate the drawdowns greater than 5% since the trough in 2009.

For a longer-term perspective, here is a pair of charts based on daily closes starting with the all-time high prior to the Great Recession.

- Phil

www.philstockworld.com

Philip R. Davis is a founder of Phil's Stock World (www.philstockworld.com), a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders. Mr. Davis is a serial entrepreneur, having founded software company Accu-Title, a real estate title insurance software solution, and is also the President of the Delphi Consulting Corp., an M&A consulting firm that helps large and small companies obtain funding and close deals. He was also the founder of Accu-Search, a property data corporation that was sold to DataTrace in 2004 and Personality Plus, a precursor to eHarmony.com. Phil was a former editor of a UMass/Amherst humor magazine and it shows in his writing -- which is filled with colorful commentary along with very specific ideas on stock option purchases (Phil rarely holds actual stocks). Visit: Phil's Stock World (www.philstockworld.com)

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