We had a total breakdown of the high-multiple leaders as well as a failed move higher in the morning. After the bell, internal memo from Hewlett Packard CEO seem to indicate a very tough 3rd quarter is on the way. This helped to explain the strong selling in technology today. The HPQ drop after the bell has dragged the SPY below the $133 support level. It is also possible the U.S. reaching its debt limit today prompted more selling as well. When high multiples stocks roll over, it is rarely a one day event. The late April gap for the QQQ is around 56.50.
One the bright side, the S&P 500 managed to hold a few cents above the low of earlier this month and is still above the 50-day simple moving average. The iShares Silver Trust also had one of the lowest trading volume days in almost a month. Are the sellers running out of inventory selling silver? The move lower today hurt the long call positions, is it time that the put premium gets a reduction on a bounce? Unleaded gas futures dropped almost 50-cents in the last 4 sessions and may help corporate profits and consumers in the coming quarter if the trend continues. Despite the negatives, we may want to consider nibbling opportunities into middle of the week, starting with turn around Tuesday?
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