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SPX Snapshot: Italian Election Torpedoes Market

  • Written by Syndicated Publisher No Comments Comments
    February 26, 2013

    The US indexes rose at the open on optimism from Europe, with all eyes on the big vote in Italy. The benchmark S&P 500 hit its intraday high about 30 minutes into trading and then began pulling back as post-election concerns began circulating. The index appeared to stabilize later in the morning around the opening price, but the afternoon witnessed an accelerating sell-off to the worst daily decline since 2.37% swan-dive the day after the US Presidential election. The index closed at its intraday low, probably not a good sign for tomorrow, off 1.83%.

    Here is a 5-minute chart of today’s rollover. The index tried to steady itself at the 1510 level, then the 1505 level. 1500 offered zero support.

     

     

    Here is a daily chart with callouts highlighting today’s selloff with the November 7th selloff following the November 6th Presidential election. The index is now about 11 points (about 0.75%) above its 50-day moving average.

     

     

    The S&P 500 is now up 4.32% for 2013 and 2.81% below the interim closing high of February 19, 2013.

    From a longer-term perspective, the index is 119.9% above the March 2009 closing low and 4.9% below the nominal all-time high of October 2007.

     

     

     

     

    For a better sense of how these declines figure into a larger historical context, here’s a long-term view of secular bull and bear markets in the S&P Composite since 1871.

    Images: Flickr (licence attribution)

    About The Author

    My original dshort.com website was launched in February 2005 using a domain name based on my real name, Doug Short. I’m a formerly retired first wave boomer with a Ph.D. in English from Duke. Now my website has been acquired byAdvisor Perspectives, where I have been appointed the Vice President of Research.

    My first career was a faculty position at North Carolina State University, where I achieved the rank of Full Professor in 1983. During the early ’80s I got hooked on academic uses of microcomputers for research and instruction. In 1983, I co-directed the Sixth International Conference on Computers and the Humanities. An IBM executive who attended the conference made me a job offer I couldn’t refuse.

    Thus began my new career as a Higher Education Consultant for IBM — an ambassador for Information Technology to major universities around the country. After 12 years with Big Blue, I grew tired of the constant travel and left for a series of IT management positions in the Research Triangle area of North Carolina. I concluded my IT career managing the group responsible for email and research databases at GlaxoSmithKline until my retirement in 2006.

    Contrary to what many visitors assume based on my last name, I’m not a bearish short seller. It’s true that some of my content has been a bit pessimistic in recent years. But I believe this is a result of economic realities and not a personal bias. For the record, my efforts to educate others about bear markets date from November 2007, as this Motley Fool article attests.
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