OK, you folks know how this goes:
- another one of *those* days with every sector and index down
- all-time record volume on the downside vs. lower volume rallies
- moving averages broken all over the place
- March trendlines broken again
- subprime & credit woes
- financials looking like death
- T2108 under 20 (closed at 18.86)
- my blog getting tons of hits from people searching for a list of inverse (bear) ETFs and the uptick rule changes… (please don’t initiate shorts right here!)
That last item has me concerned for people’s financial well being once again, just like on June 7th. That day I got a lot of similar search hits and I expressed my concern about people chasing the market down. Sure enough the market turned on a dime and brought pain to the late-coming bears. I’m not saying that we can’t go lower here , just that the risk/reward in the short term is better to the upside. Just like I wouldn’t be rushing to buy after the fifth day of a rally I certainly won’t initiate shorts with the S&P down 4.5% in 5 days. On to the charts…
Some may have thought I was crazy last week when I was talking about the indices moving toward the bottom of their their channels. Well, here we are — the Nasdaq actually broke under its channel today. Note that it’s also back under it’s June highs. Bulls have to be a little concerned about what’s now a failed breakout, the break of the 50-day moving average and the March uptrend.
The Nasdaq-100 / QQQQ was notably stronger than the rest of the market today. The Qs actually went green early in the day. With names like RIMM, AMZN (disclosure: I’m long AAPL in my long term account) and AAPL in that index it’s no wonder that it’s showing relative strength. The question is can it hold firm or will the rest of the market drag it down. If things get really bad and, say, some hedge funds start blowing up everything will get sold.
The S&P clawed its way back in the last hour to close just shy of the June intraday low. I still consider it range-bound as long as it’s above 1480.
The Dow (which I ignore) is also approaching the June lows.
The Russell 2000 gave up the fiddy last week and the 200-day moving average today.
And another look at the financials. Here’s the Broker/Dealer Index ($XBD):
and the Banking Index ($BKX):
I’ll post some individual stocks over the weekend. Be careful out there!
A few downgrades today. I almost hate to flip the Russell’s long-term trend to to down but it is what it is.
|Trend||Nasdaq||S&P 500||Russell 2000|
(+) Indicates an upward reclassification today
(-) Indicates a downward reclassification today
Lat Indicates a Lateral trend
*** I’m simply using the indices’ relations to their 200, 50 and 10-day moving averages to tell me the long, intermediate and short-term trends, respectively.