February 19, 2008 Stock Market Recap

This was a good day to fade the opening gaps on the indices as the early gains evaporated in the face of $100 oil and a rally in gold. Too bad I got impatient with my gap fade trade and covered with only 2/3 of a gap fill around 11:30. The action today fit perfectly within what the market’s been doing the last few weeks. The indices closed right in the center of triangles they’ve been building. The good news is that those triangles are closing on themselves quickly, so they’ll have to be broken soon. Unfortunately, that doesn’t mean that the indices won’t remain range-bound. I imagine we’ll need some real news — good or bad — to break the market out of its sideways march. Maybe tomorrow’s reports, the CPI and/or the FOMC Minutes, will do the trick…

Trend Table
Trend Nasdaq S&P 500 Russell 2000
Primary Down Down Down
Intermediate Down Down Down
Short-term Down(-) Lat Lat

(+) 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.


  1. Posted by Sam on February 20, 2008 at 2:45 am

    After today’s market reversal, it will take a miracle tomorrow to prevent tonight’s 2/19 report of the KKR/KFN billion $ commercial paper repayment delay, along with tonight’s minus 447pt/minus 3.25% Nikkei drop, from pushing the rest of our stock indices down to their last visible means of support at their 14 month horizontal lines now down only 1-3%.

    A bad day tomorrow 2/20 can take us through those supports on our way, for some indices, to the Jan lows down another 5% plus, and for weaker indices down to lower 2008 lows in an emerging bear market downtrend – but if you’re not looking for these break points you won’t see them.

  2. Posted by Jay on February 20, 2008 at 7:24 pm

    Well, there does not seem to be much conviction behind todays miracle…. When will we see volume?

  3. Posted by Sam on February 21, 2008 at 5:34 pm

    Breaking the last remaining year long support lines down 2%-4% at DJIA 12000, NYA 8800 and RUT 675 should show conviction with volume on the downside.