This morning when I said I didn’t think the Freddie & Fannie relief rally would last very long I didn’t think the gains would all evaporate today but they did just that. The S&P 500, Nasdaq and Russell 200 are all beneath their Friday closing levels. I’m right back to where I was on Thursday night, looking in the sectors which haven’t been (fully) hit yet for short candidates.
It really felt like some fund(s) was(were) puking up stocks today. All day I saw huge percentage losers (> 5% down) streaming across my scanner. A good portion of them were energy, commodities and financial stocks which have been sliding for weeks and are making new 2008 lows if not 52-week lows. Many of those charts are showing selling begetting more selling — a good portion of which is probably forced selling. At the end of the day a full 42% of the stocks in my “tradable” universe (stocks that pass a volume, price & volatility filter) were down more than 5%. Here are some of the biggest losers from my universe of stocks:
The Nasdaq, and especially the Nasdaq-100, are leading the way down. The Nasdaq closed below the July closing low but is still above the July intraday low. On-Balance Volume says that that intraday low will be toast. I guess we’ll see shortly if it’s correct.
QQQQ has shot past the July lows and is now *just* 3% away from the 2008 lows.
The S&P 500 is just 0.79% above its 2008 closing low.
And the broader market is finally weighing on the small caps. The Russell 2000 broke its 50 and 200-day moving averages today. I don’t think we can get a good chance at a bottom until this group joins the party and there’s nowhere left to hide.
Almost everything is down once again.
| Trend | Nasdaq | S&P 500 | Russell 2000 |
|---|---|---|---|
| Long-Term | Down | Down | Down(-) |
| Intermediate | Down | Down(-) | Lat(-) |
| Short-term | Down | Down(-) | Down(-) |
(+) 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.
Thanks Mike for the awesome TA. I knew it was bad today but did not realize so many stocks were down such huge percentages..do you think this could be the climaxing to the bottom we are waiting for?? TIA
should I sell my oct.Q’s puts at the juoly lows,do you think the bounce will be long term?
Janet,
My guess is that we’re still not near a capitulative bottom. I’m keeping an eye on T2108, which is still close to 40. Once it’s near 20 I think it’ll be time to start covering shorts.
I wish I could answer that Angelo.
Mike,
I was wondering if you’ve noticed an increase of hits to your webpage from searches for bearish etf’s etc… Seemed to be a pretty good indicator of a bottom last time…
Thanks,
James
I sure have James. They’ve been running VERY high on each gap down open we’ve had the last several days.