The market had by far its worst day of 2012 with the Dow falling more than 200 points. Stocks had been on a relentless charge in 2012, with indices hardly even testing their 10-day moving averages, but today's sell-off is a reminder of how quickly gains can disappear. Downside action over the past three days in the S&P, most of which came today, erased nearly all of February's methodical gains.
The catalyst for the sell-off was renewed fears about a Greek debt default. Parameters of the deal had been almost entirely finalized, but now questions persist about whether bondholders will follow through with the planned debt restructuring. Financials were among the hardest hit stocks due to exposure to the European debt crisis. The Financial Sector SPDR ETF (XLF) fell 2.5%.
While the Greece fears will be pointed to as the main cause for the correction, such a pull-back was due in this tape. Bulls had been spoiled by the low volume, monotonous climb of the market. The market had shown resilience at every sign of trouble this year, but finally succumbed after closing below its 10-day moving average yesterday.
The question now is, how deep will the correction be? In the Daily Recap video above, we examine those levels that active traders will be looking to start buying back stock aggressively.
*DISCLOSURES: Scott Redler is long AAPL, LVS.
