S&P 500 Snapshot: Down for the Day and Month with a Bit of Drama

July 31, 2014

by Doug Short

US equity markets ended the month with a selloff. The S&P 500 and the Dow both posted their first monthly declines since January. The popular press has a grab-bag of explanations, most notably Argentina's default, the chess match against Russia, and concerns that a Fed rate hike might come sooner than expected. The S&P 500 opened at its -0.25% intraday high and sold off in a couple of waves to its -2.00% close at its intraday low. The 1.79% daily trading range was at the 97th percentile for the year, and the daily decline was the fourth worst of 2014. The VIX volatility index was up 27.16%, by far its biggest jump of the year.

Interestingly enough, despite some morning volatility in the 10-year note yield index, the Treasury put the official closing yield at 2.58%, up a mere 1 bp from the previous close. It is now 14 bps above its interim closing low of May 28th.

Here is a 15-minute chart of the past five sessions. The S&P 500 is up 4.45% year-to-date.

We can see on a YTD daily chart that the index plunged dramatically below its 50-day moving average -- something that happened once before this year, back in January. Volume was 37% above its 50-day moving average.

For a longer-term perspective, here is a pair of charts based on daily closes starting with the all-time high prior to the Great Recession.

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