Yesterday, the market started out with a hangover from last week by dropping over 1% at the opening on reports of slower manufacturing numbers in China. The Euro hitting a 4-year low against the dollar did not help the cause for a rebound.
Meanwhile, positive manufacturing and construction spending reports here in the U.S. seemed to put a floor under the selling, and the markets spent most of the day clawing back and briefly dipping into positive territory.
The last 90 minutes of trading, as we’ve seen quite a bit over the past few weeks, turned the rebound into a win for the bears as the major indexes headed straight down and closed near the lows for the day.
Weighing heavy on sentiment was the Attorney General’s announcement late in the day that the government was launching criminal and civil probes into the oil spill. That pretty much eliminated any upward bias by turning another rebound day into a losing proposition.
Our domestic Trend Tracking Index (TTI) slumped as well and moved to within +0.49% of breaking its long-term trend line to the downside. A couple more of these down days will certainly push the TTI into bear market territory where it will join the international index (currently at -4.52%), which signaled a sell back on 5/7/10.
Once that happens, bear market funds/ETFs will certainly become a consideration again. However, right now it’s too early to be concerned about that, and we will have to wait and see how things turn out before making any other investment decisions.