In China, the selling continued on Tuesday, and the Shanghai Composite closed down an additional 1.7%, having fallen 8.5% on Monday. The Chinese government continues to respond with direct intervention, causing the western financial world to do a giant collective face-palm. In order to halt the slide, Chinese regulatory authorities today announced a crackdown on short-selling. Short selling is almost universally considered a stabilizing force in US markets, and the situation in China shows why: short selling would have slowed the market’s crazy rise, and when the market turned, short sellers would have stepped in to take profits, cushioning the fall.
For the most part, US markets appear to be shaking off the news from China today. Major indices are mixed, but the price of oil is falling yet again, with West Texas Intermediate now trading for $47.44 per barrel.
At present, stocks are up. The S&P 500 is up 0.17%, the DJIA is up 0.08% and the NASDAQ is up 0.17%.
Here are your Tuesday morning market metrics. The industries showing strength today include Building Products, Air Freight & Logistics and Metals & Mining. The industries showing weakness today include Internet & Catalog Retail, Multiline Retail and Internet Software & Services.
The VIX is down 0.58% to 15.51 after closing yesterday at 15.60. The most active options this morning is iShares Russell 2000 (IWM) with 11,101 September expiring $127 calls changing hands. The total put-call volume ratio is 1.09 (229,361/210,071). NYSE Adv/Dec 1,520/1,335. NASDAQ Adv/Dec 976/1,331.
Julian Close became a stockbroker in 1995. In his 20 years of market experience, he has seen all market conditions and written about every aspect of investing. Julian has also written extensively on corporate best practices and even written reports for the United Nations. He graduated from Davidson College in 1993 and received a Master of Arts in Teaching from Mary Baldwin College in 2011. You can follow Julian’s daily hedged options trades and his unfolding market commentary via twitter: @JulianClose_MIC.