Before the Open (Oct 13)

Good morning. Happy Monday. Hope you had a great weekend.
The Asian/Pacific market closed mostly down. Taiwan dropped 2.8%, followed by Malaysia (down 2.4%) and Indonesia and New Zealand (about 1%). Australia, South Korea and Singapore dropped 0.6 – 0.7%. Europe, which was down a bunch in early trading, is currently mostly up. Austria is up 2%, followed by Russia (up 1.7%), Norway (up 0.9%), Germany, Spain and Italy (up about 0.6% each) and Prague and Greece (up about 0.5% each). Futures here in the States were down a bunch during the night but now point towards an up open for the cash market.

The dollar is down. Oil is down, copper up. Gold is up, silver is down.
The market got clobbered last week. It was the biggest down week in a long time and a week that broke many support levels. The character and personality of the market changed. There was massive movement, massive swings, huge intraday ranges, big gaps, big trends, sudden reversals, huge volatility. You name it, it happened. The market suddenly woke up. It had been trending down for a couple weeks, but the selling pressure was pretty tame. Yeah there were some days of moderate or semi intense selling pressure, but for the most part, it was business as usual. Then, out of nowhere, something changed. Ranges that typically take all day to form took place in the opening 30 minutes. Gains and losses that would take a week or longer to accomplish were taking place daily. A quiet market turned into the wild wild west. Day traders who had become accustomed to risking a point for the possibility of making 5 found themselves risking 5 in order to make 25. This type of movement hasn’t taken place since the financial crisis.
By several technical measures, the market is oversold enough to bounce, but when the directional movement gets so intense, the technicals matter less than sentiment. If there investors are panicking or forced to sell due to margin calls, the technicals won’t matter – at least for a couple days.
Short term anything goes. We know that…especially within a downtrend. Heck, we got two V-bottoms in a 5-day period. But overall, the trend is down. I expect lower prices even if/when the market bounces. In fact a bounce would set the table for some really nice shorts. The S&P is only 5-6% off its high. Dropping another 5-6% is very doable. I don’t see a crash coming, but more downside, yeah. More after the open.
PremarketStock headlines from barchart.com…
NetScout Systems (NTCT -4.18%) will acquire Danaher’s Communications business (DHR -1.25%) for $2.6 billion.
AB InBev (BUD +1.18%) has studied a potential deal to acquire PepsiCo (PEP +1.15%), according to Bloomberg.
CSX (CSX -2.57%) was approached by Canadian Pacific (CP -4.96%) on a possible merger, according to WSJ.
Deere (DE -0.21%) reported Sep US/Canada utility tractor sales were up more than 28%.
General Electric ({=GE) could rally 25% over the next 12-18 month due to its industrial earnings, according to Barron’s.
Micron shares (MU -9.30%) look more attractive, according to Barron’s, due to the recent 18% dip.
Earnings and Economic Numbers from seekingalpha.com…
Today’s economic calendar:
none
Notable earnings before today’s open: none
Notable earnings after today’s close: none
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers