A Rough Finish

Selling accelerated heading into the final half-hour of trading. The S&P 500 index dropped from a loss of about 2.2% to more than 2.8% at the close. The PowerShares DB Crude Oil Double Short (DTO - commentary - Trade Now) benefited from an even larger percentage drop in oil prices and had gains of more than 7%.

Long-bond prices were higher in the early part of the day, but gains there were fading until the selloff sent investors back into safe havens. The ProShares Ultra Short 20-Plus Year Treasury (TBT - commentary - Trade Now) was down about 0.7%.

The catalyst for the losses was the bad unemployment report combined with low volume, something I've been warning about this week. Traders are looking to exit, since they'll miss two trading days before U.S. markets open again on Monday. Japan, Hong Kong and Singapore were off by 0.6% to 1.4% today, and those markets are likely to fall again tomorrow, following today's employment news.

A correction has been waiting to happen for two months: the rally flatlined in May and has looked increasingly weak, but we've also seen selloffs like this get erased. A slightly negative sign is that gold, oil and stocks are all moving to the downside. Most deflationary arguments include a falling gold price, and investors should pay close attention to the metal's direction.

Two winners today were the countertrend assets of 2008: the U.S. dollar and Japanese yen; each gained less than 1%. A standout performance came by way of iPath Nickel (JJN - commentary - Trade Now), up 2.5%.

At the time of publication, Dion had no positions in securities mentioned.

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Know What You Own: In Thursday's trading, the most active stocks include Bank of America (BAC - commentary - Trade Now), the S&P Depositary Receipts (SPY - commentary - Trade Now), the Financial Bear 3X (FAZ - commentary - Trade Now), PowerShares QQQ (QQQQ - commentary - Trade Now), the Financial Bull 3X (FAS - commentary - Trade Now), Ford (F - commentary - Trade Now) and Citigroup (C - commentary - Trade Now).

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Don Dion is the publisher of the Fidelity Independent Adviser family of newsletters, which provides to a broad range of investors his commentary on the financial markets, with a specific emphasis on mutual funds and exchange-traded funds. With more than 100,000 subscribers in the U.S. and 29 other countries, Fidelity Independent Adviser publishes six monthly newsletters and three weekly newsletters. Its flagship publication, Fidelity Independent Adviser, has been published monthly for 11 years and reaches 40,000 subscribers.

Dion is also president and founder of Dion Money Management, a fee-based investment advisory firm to affluent individuals, families and nonprofit organizations, where he is responsible for setting investment policy, creating custom portfolios and overseeing the performance of client accounts. Founded in 1996 and based in Williamstown, Mass., Dion Money Management manages assets for clients in 49 states and 11 countries. Dion is a licensed attorney in Massachusetts and Maine and has more than 25 years' experience working in the financial markets, having founded and run two publicly traded companies before establishing Dion Money Management.