It was another one of those days where every sector of the market was down — gold couldn’t even lift today! And of course the selling came on increasing volume. That’s been par for the course for months on end. There was plenty of technical damage done today. The S&P and Nasdaq broke their July uptrends and their 200-day moving averages. The moving average breaks put us back in bear territory. On top of that, the Nasdaq also broke its 50-day moving average today. Those moving averages were already positioned bearishly, with the 50 under the 200 and having price back under both just confirms what the averages were telling us.
Having said that, things aren’t terrible (yet). I still see the indices as range-bound. It’s just that now we seem to be in for a retest of the bottoms of those ranges. We will need to take out the July lows in order to break the ranges. There’s no immediate danger of that happening despite the drag that Cisco (CSCO) is having in the after-hours session thanks to their earnings and guidance. Absent peace and prosperity breaking out overnight I expect the S&P 500 to gap under its 50-day moving average in the morning.
Lots of downgrades today
| Trend | Nasdaq | S&P 500 | Russell 2000 |
|---|---|---|---|
| Long-Term | Down(-) | Down(-) | Down(-) |
| Intermediate | Down(-) | Lat(-) | Down(-) |
| 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.
