BEHIND THE MONEY: China, AIG a Couple 'Tells' for the Tape Today
Fast Money's Guy Adami likes to use so-called tells to guide his investment strategy. Here are a few tells he and the team are watching today.
Will we follow China again with a big sell-off? On August 17, the Shanghai Index fell 6 percent. When our own market opened, volatility exploded (the VIX jumped 17%) and the S&P 500 ended the day down more than 2 percent. Many credible market pundits, including David Rosenberg of Gluskin Sheff & Assoc., say that China is the leading indicator for the rest of the globe and we will inevitably follow them down the tubes (the Shanghai index is already in a bear market).
But so far today, U.S. stocks are holding up pretty well, despite an even bigger drop in the Shanghai. This is a good tell that maybe China's fate isn't necessarily ours.
The other tell are the "Dash for Trash" stocks that captured the imagination of day traders everywhere last week. Despite analysts' predictions that they are worth zero, AIG , Fannie Mae and Freddie Mac put together monster rallies. They are all down today in a bad tell for the market. The Fast Money team is worried that maybe the rally in those "trash" names last week was the kind of speculative blow-off you see at the top of bull markets.
We'll see which tell is telling the real story tonight.
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