And I actually asked if we had hit bottom yesterday! Yesterday seemed like a big move, but it was nothing! Today's markets set records with a huge drop on huge volume. SPX lost $60 to close at $1200 while the RUT closed at $727 for a loss of $46. Trading volume hit record highs for this year with 5.4 billion shares of the S&P 500 stocks trading; volume was up 32% on the NYSE and was up 26% on NASDAQ. The day began with a flat unemployment claims report; initial claims were essentially flat at 400k (down from 401k last week). Continuing claims were up ten thousand at 3.7 million. European economic concerns appeared to be ruling the day, although it didn't appear that we had any really new news to drive this sell-off. To me, that was the most puzzling aspect of this trading day. The concerns one would have listed several weeks ago have not changed. Even more surprising, gold even sold off a bit, so it didn't appear that traders were moving from equities into that safe haven. Similarly, the bond markets didn't see flocks of buyers either. Traders appear to be simply moving to cash. Normally, we expect the stock market to be a measure of expectations for corporate earnings; so far in this earnings season, companies have been generally beating their estimates and painting reasonably favorable futures. But that doesn't seem to be enough.

Everyone is now focused on tomorrow's jobs report. Even before this huge sell-off, no one was expecting a large number. At this point, it isn't clear that even a positive surprise in the jobs report would turn this market around. On the other hand, when you see such a huge move downward, there is often a reflexive bounce the following day as traders buy the bargains. But there was no sign of that happening as the trading closed today; in fact, the selling accelerated into the close. My RUT 670/680 put spreads are being squeezed; if this sell-off continues, I will be closing and rolling spreads. Everyone will be glued to the futures as the jobs report hits the wires tomorrow morning.