Equity markets stage a strong rebound into the close led by oil company stocks. The Dow was down 177 points; that’s 223 points off the low of the session. Stocks continue to struggle for leadership that can at least put the brakes on the current market slide. There’s no doubt the oil space could lead a bounce; however, crude and crude-related stocks would have to rally in tandem and take out key resistance points ($34.00 is a key test) at some point.

Meanwhile, the shellacking in tech stocks is something to marvel, bringing back memories of 2000 and 2001.  However, these are not Pets.com and other hot stocks with prospectuses written on napkins.  I guess market purists are saying that this is the revenge of the generally accepted accounting principles (GAAP).  Even if you think accounting that does not make for allowances is the best way to go, there has to be a downside to the drubbing in most tech names.

Today, we get the JOLTS report; this week, Janet Yellen testifies to the House and Senate committees, as there will be ample opportunities for insight and direction.

While the Fed remains wedded to the notion of four-rate hikes this year, betting on negative interest rates in the United States, it has spiked this year.  It wouldn’t be novel considering the rates in Germany, but it would be a devastating blow to the credibility of the Fed.

I received an email yesterday asking what a broken stock is.

Broken Stocks is typically when trading is well-below fundamentals (using a number of valuation metrics) where the charts have been obliterated.  They are rudderless ships that collapse in a heap, even when there is only good news.  They crush through technical support and rollover brokerage upgrades as steamrollers.  There is no stopping them on the downside where magnetic pull is enhanced considerably.

Today’s Session

Each morning we wake up to find out what country’s stock market crumbled overnight, and the winner this morning (drumroll)…Japan.  The land of the Rising Sun now sports a ten-year bond that has sunk to a negative yield.

In addition, crude oil is under pressure after beginning stronger, but the IEA sees demand “easing back considerably” this year to 1.2 million barrels a day from 1.6 MB/D last year.

Stocks set to open much lower, gold will spurt higher, but most cash will move to the sidelines and US treasuries (the TLT hedge is up nicely).  Let’s hold off on forcing the issue.  The market is oversold, but that means nothing at the moment.