Below is a mega-diary -- along with some news analysis -- of the financial markets. Some of the writing is from my blog (insert shameless plug here).
What started this was another drop-off in world markets.
From the WSJ:
Asian stocks dropped sharply across the region, with Japanese shares declining for the fifth session in a row, while Hong Kong retreated 4%.
Japan's Nikkei 225 Index fell 3.34% to 16642.25, extending a slide for a fifth day that was sparked by last week's plunge in Chinese and U.S. stock markets. Exporters were hit hardest on the yen's recent rally. Since climbing to its highest in nearly seven years last Monday, the index has slid 1573.10 points, or 8.64%, over the last five trading sessions.
The rest of the region and Europe was just as ugly.
Markets in Hong Kong, Australia, the Philippines, Malaysia, India and South Korea all fell sharply Monday, continuing their declines from last week, when a 9 percent plunge in Chinese stocks on Tuesday triggered cascading selloffs on Wall Street and other global markets.
European markets also opened lower Monday, with Britain's benchmark FTSE 100 down 1.5 percent in early trading, France's CAC 40 sliding 1.8 percent and Germany's DAX sinking 2.1 percent.
With the markets closed the SPYs lost .9% the QQQQs lost .97% and the IWNs lost 2.12%. Clearly people are getting out of small caps.
With the charts below, notice
1.) All the markets had a downward bias
2.) Traders dumped stock at the end of the day, indicating a lack of confidence about the overnight situation
3.) The increased volume at the end of the day.
Here is a 5-year chart of the SPYs, QQQQs and IWNs in a weekly format. Notice three things.
1.) We are still in an uptrend.
2.) Just eyeballing the charts, we would have to move at least 4% (after today's close) more to the downside before we moved into secular bear market territory.
3.) Volume really spiked last week. That could indicate the beginning of at least a short-term correction.