1. Love it when markets demonstrate notions we talk about in class. During our discussion of diversification, we spoke about correlations going to 1 in times of crisis and look what happens in world markets yesterday. And Cramer has a story about not fighting the correlations! (Not sure if you can read it, but here‘s the link).
2. Technical levels of 1120 on the S&P is the August closing low, which got as far as 1100 intraday. These beckon, the obvious expectation is a Monday swoon to bring back reminiscences of 1987’s Black Monday and then a reversal. Which probably means that something else will happen. Some of this panic has to be the 9-11 related “credible threat” in NYC.
3. Too early to think about nibbling, but it is worth looking to see if any stocks are at levels near those August lows or even below past crisis lows. TAN, the solar ETF whose main component is First Solar is really trashed. The latter stock has been cut in half this year. Coal and steel stocks, MT, NUE, X are down too but not enough. Many more stocks are closer to highs. Despite correlations, all stocks don’t usually top or bottom at the same time.