Market went down on comparatively lower volume. In a thinly traded, holiday week, negative news flow exaggerates moves. Plus once market entered correction phase, any negative news acts as a further catalyst for dip buyers to stand aside. Attempts at bounce intra day were not successful and this lead to the market closing near lows. In a bullish market all negative news is discounted, in correction phase all bearish news has exaggerated response. Lowe's and Citibank have been in down trend for long and news from or about them is hardly a surprise. The retail and finance sectors were in down trend for months before the news about the mortgage turmoil hit the markets.
The widespread selling and no bounce and hint of panic in fact is very good as it again sets us up for a possible reflex bounce. Markets on downside seldom go down straight. Most of the things I monitor are again showing possible reflex bounce developing. The Market Monitor readings on multiple items are at levels where such bounce is possibility. The negative sentiment is pervasive. The usual suspects and bearish crowd who have been predicting doom and gloom for many years day in and day out are dancing in the street, saying we told you so.There is almost a competition amongst the bearish pundits to paint even more extreme and dire scenarios. That is the kind of scenario which offers the best chance for a bounce.
That is the speculators take on this market at this level. When the risk is high rewards are high.
Speculation: The process of selecting investments with higher risk in order to profit from an anticipated price movement.