The market rallied last Friday right into the close. It was an amazing one-way move on fairly light volume. These types of gains are easier to retrace than a rally day with very high volume and different levels of distribution.
Friday’s move reminds me of the newly minted 21 year old who can enjoy an adult beverage without the scorning looks of friends and family when he was 20. It’s party time, he says! Often, however, the party lasts too long for the newbie, and a next day hangover is inevitable. That happened in the market today. Oh sure, there is always a straggler who can go longer than the rest, like the Nasdaq today, but he too may feel it soon.
The Dow closed down at -157.13. Will it continue Tuesday, or will new friends light the party candle again? We will find out soon enough.