The Path of the Bear

4:35 pm : The best monthly jobs report in four years couldn't keep sellers from sending stocks to their fourth straight loss, which contributed to the stock market's worst weekly performance in one year.

Despite persistent weakness overseas amid continued contagion concerns, stocks managed to attract some modest support as some speculated that a rebound may be in order after the stock market sank some 6% during the course of the three previous sessions. The worst of that loss came Thursday, when the Dow's intraday drop of almost 1000 points was blamed on the failure of computerized trades and electronic networks. In response, both the NYSE and Nasdaq cancelled trades from a 20 minute time block that saw prices greater than or less than 60% away from the consolidated last print price.

However, stocks were unable to sustain the early bid. News that nonfarm payrolls for April surged 290,000, the largest increase since March 2006, couldn't even secure support for stocks.

As an aside, the headline unemployment rate climbed to 9.9% from 9.7% as a result of workers re-entering the workforce.

With sellers reaffirming control, stocks were unable to make anything more than a few upward charges, each of which proved fruitless in the face of resistance.

Heavy volume to the downside made for widespread weakness. As such, nearly 90% of the names in the S&P 500 logged losses and declining share volume on represented 85% of the NYSE's total trading volume, which surpassed 2 billion shares for the second straight session. Volume on the NYSE has not broken 2 billion shares in back-to-back sessions in more than one year. What's more, neither of those two sessions have been options expirations sessions.

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Anonymous said…
Do you think the market still has downside?