Monday, October 27, 2008

Rally fails as stocks slide 3% at the close

After spending most of the day in positive territory, stocks in New York fell sharply at the close and ended down across the board. The Dow lost 200 points and ended the day at 8175 while the S&P closed at 848. While today's session did not retest the Oct 10 lows, it was somewhat noteworthy in that it was the lowest close yet. The negative mood followed mostly bearish global trading as Indian markets fell over 2%. The Nifty continued to probe the downside getting as low as 2252 intraday before closing at 2524. The Sensex similarly dipped below 8000 before rallying to finish at 8509.

In the end, my call for a retest today was overstated, although the day did end up negative. I am maintaining my basic position here that a significant retest is imminent and may come as soon as tomorrow, although I am not holding my breath on it. We may well see a close below 8000 and an intraday retest of 7773. I think the retest of the 2002-03 lows may have to wait until Friday or perhaps next week. And indeed, there is a chance they may not come at this time at all. Look for Indian markets to retest their intraday lows by Friday and into next week.