The sell-off accelerated as many traders realized that it was impossible not to forecast a recession. While that is hard to believe, it seems that reality had not fully sunk in. The trouble started the night before as Alcoa announced major lay-offs of some 13,500 employees, which was followed by earnings warnings from Intel and Time Warner.
Crude oil plunged as falling demand caused oil inventories to rise. ADP’s payroll survey put down any remaining bullish hopes for the day as December’s whopping losses of 693,000 wrapped up one the worst years in history. This will not bode well for Friday’s jobs report, which also may turn out worse than expected.
It was a day of no positives as now India got rocked by its own version of the Enron debacle. As was to be expected, our Trend Tracking Indexes (TTIs) slipped and are confirming their position in bear market territory:
Domestic TTI: -8.44%
International TTI: -18.17%
I can still see more upside potential as part of a bear market rebound, but I still believe it’s better to stay away from any outright long or short positions.