Quite an ugly close, Russell 2000 leading the way down

As mentioned in yesterday evening's post, the Russell 2000 has the weakest chart of the major indexes and it outperformed today; unfortunately it outperformed to the downside, with a 2.5% drop. The rest of the indexes weren't much better with losses in the 2.1-2.3% range.

NASDAQ has already fallen all the way from the 50 day to 200 day moving average in 1 session; whereas SP500 broke its 200 day moving average today with it's bad close. Only the DOW is more than marginally over its 200 day. So the technical damage continues. In 'normal' times, I don't focus so much on the averages, but these are obviously not typical days....

With the market ending on the lows of the day, generally this not bode well for the next morning. I sold a bit of the hedges (short ETFs) into the close, but only a bit. The fund was down 1.4% today despite almost being 1/3 in cash by mid day and >10% short at mid day. That speaks to the damage in individual names. Going to remain patient and apply cash judiciously with the assumption we have some more weakness ahead.

Even good old McDermott (MDR) which was the only infrastructure name up all day, went a bit negative at day end. I am glad I exited much of that Aluminum Corp of China (ACH) on the spike yesterday as it fell >8% today, as did iShares Xinhau China 25 (FXI). Might present a nice trading opportunity in the coming week(s).

Long MDR, ACH in fund; no personal position