Full Market Recap (6 Charts) – Earnings Season Kicks Off with Largest Losses YTD

Reminder: Earnings season starts today with Alcoa (AA) having kicked things off after the close. Don’t be caught by surprise when your stocks report earnings, read my post 5 Easy Steps to Navigate Earnings Season Better Than the Pros.

The market had its first significant down session in quite some time, with the news outlets citing everything from China to Europe to the US debt as the primary cause. First up, a look at the intraday movement (screenshot from my thinkorswim by TD Ameritrade account):

And here are some interesting tidbits from around the blogoshpere regarding today’s action.

From Zero Hedge:

Five down days in a row (first time in 5 months) for the S&P 500 (cash) and it has broken its 50DMA for the first time since 12/20/11.

NYSE volume run-rate is its highest of the year for a non-OPEX day

From Bespoke:

Following today’s sell-off in the equity market, there are now 226 stocks in the S&P 500 that are currently in oversold territory (more than one standard deviation below 50-day moving average). On a percentage basis, this works out to 45.2% of the stocks in the index. The last time there were more oversold stocks in the S&P 500 was back on October 4th.

Unless the market stages a significant last hour comeback, the S&P 500 is set to decline more than 1% on back to back trading days for the first time since 11/16 and 11/17.

From Reuters:

The selloff in U.S. stocks accelerated on Tuesday, as the Dow and S&P 500 dropped for a fifth day, with the pullback coming on the cusp of earnings season. The slide marked the S&P 500’s worst day since December 8. The declines were the largest losses this year in terms of both points and percentage drops for each of the three major U.S. stock indexes.

As far as looking ahead, what we do know is that the big upswing that began late last year ended officially yesterday and there is much more risk for further downside action moving forward, especially if earnings season fails to impress. Raising stops and perhaps some cash at this time is worth a consideration, even more so if/when we see an oversold pull back.

Stay frosty out there.

And last but not least here’s two good charts I liked of Apple (AAPL) and Gold (GLD) from Dan Zanger’s newsletter last night. Note it does not include today’s action. When factored in for Apple, the stock for now continues to hold its primary uptrend.

Click to enlarge

Click to enlarge

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