It was bound to happen: after the Tuesday "winning" streak was lost 8 days ago on the 21st unlucky week, it was the turn of the "BTFD mentality" that had prevented a 3-day losing streak in the Dow Jones since December. And while today's selling was still somewhat contained, it did not prevent the DJIA from closing below the psychological 15,000 support level, driven according to some, by the breach in the 200DMA of the USD index.
It was not a good day for Treasurys either which continued their slump, and also closed a the lows of the day:
The DXY's breach of the 200 DMA today was highlighted by some as the selling catalyst.
Perhaps most notable is that the number of companies hitting 52 week lows surged to the highest since October 2011, or just as the world was imploding on fears of a European dissolution and the market needed a global coordinated central bank intervention to preserve it.
Away from the DJIA, things weren't any better for the Nikkei futures either which while bouncing off the intraday lows, still closed just above 13,000 driven by a violent short squeeze in the USDJPY in the usual 3:30 pm block, which however had no impact on the Emini which closed at its lows of the day if still just above the 50DMA. Look for the 1600 in the S&P to be next downside support level of significance in the overnight futures trading session.
Curiously, there was no macro events, and no notable news to push this sell off which began alongside the start of trading following a rout in the dollar which as noted broke the 200 DMA early, and which never let up until the closing bell.
But perhaps what is most troubling for the bulls, and what in the past has provided a material bounce catalyst, is that as we showed yesterday the level of shorts at this potential BTFD opportunity is far less than at other previous inflection fulcrum points. And absent someone stepping in to arrest the bloodletting, there is a lot of downside from here.
