The S&P 500 Closes Below Its 200-DMA

Today was an unpleasant day for the stock market. The S&P 500 dropped 1.65% to close at 1,874.74. This was the worst three-day slide in three years. This is also the first time in nearly two years that the index has closed below its 200-day moving average. Historically, the stock market has performed much better when it’s above the 200-DMA than it has when it’s below it. This was the S&P 500’s lowest close since May 20. All told, the index is now 6.8% below its BABA high.

Shortly after 2 pm, the market was flat for the day, but then things fell apart, especially in the final trading hour of the day. The price of oil fell to a four-year low. With that, shares of energy stocks felt more pain. The dollar fell and gold rallied. Airline stocks have been getting clobbered which is probably related to Ebola fears. The VIX exploded 16% today to close at 24.64.

Bloomberg notes that futures prices indicate that there’s now a 46% chance the Fed will raise rates by their September 2015 meeting. That’s down from 55% on October 10. The price of oil fell today to $88.89 per barrel. That’s the lowest since November 2010. At least the bond market wasn’t harmed as it was closed today for Columbus Day.

Here’s a minute-by-minute chart of today’s market:

Here’s a look at airline stocks compared with the S&P 500:

Posted by Eddy Elfenbein on October 13th, 2014 at 6:07 pm

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