A sharp intraday reversal with about 90 minutes to go took as off the highs. We also have the IWM within 10pts of the 2007 high and the DOW notching a new 2011 high. Breadth was sold with banks taking the lead after lagging for the past week. The sore spot was chips and technology with Apple acting poorly in particular and there was plenty of chatter about crude oil hitting $108 a barrel. In addition to oil, there is increased talk that quantitative easing is going to come to an end and interest rates will start to rise from the recovering jobs market and growing inflation pressure. Despite the laundry list of negatives, the market has exhibited remarkable strength as it pulled off another V-shaped bounce recouping nearly all the losses in two weeks. Will we get mutual fund Monday or a 2-3% pullback early next week to buy?
Item of interest: Scottrade launched 15 new commission free ETF products yesterday and liquidity was a big unanticipated problem. Investors placed market orders to sell the new products. The Focus Morningstar Healthcare ETF, FHC, traded as high as $25.33, fell as low as $0.60, while the Focus Real Estate ETF, FRL, dropped from $25.50 to $1.48. How can this happen with new flash-crash rules in place? Isn’t there a 10% circus breaker or does it not applies to ETFs?
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