This was the kind of close that makes traders want to rip their screens off their table and throw them against the wall. For the record, here's what happened:
1) there was a very sudden, rapid spike in selling about 4 minutes prior to the close. This appeared to be a liquidation, particularly in certain commodity stocks like Schlumberger, which went from $45 to $43 in literally a few minutes, and in financials. Citigroupwent from $12 to $11.73, a 12-year low.
2) prior to about 3:56 ET, the volume was below average for what we have seen for the past two months. For example, we were on track to do about 5 billion shares for trading in all NYSE-listed stocks, but there have been many days where volume was 8-10 billion shares. We ended with 5.5 b shares, a significant spike considering it came in a few minutes.
3) the problem throughout the day was different: there was no aggression on the part of buyers, even though selling pressure was light (up until about 3:56).
- Merrill Lynch Advisors Are "Insulted" By Retention Packages
Bottom line: despite the fact that government programs like the Corporate Paper Funding Facility and the capital infusion into banks has now become real, buyers are still not motivated—and little bomblets of liquidation still lurk out there.
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