***** TA Update (intra-day) *****
The markets had a brief rally just after the opening, but market internals turned negative, dragging down the Nasdaq first, and then the Dow.
The Nasdaq has that gap at 1975, and as discussed in last night's TA class and Stocktimers meeting on AOL, this index needed a pretty strong opening and day today (and strong market internals) in order to avoid or at least delay that gap from filling soon. Today's action increases the odds that 1975 will fill within the next few days, and then we shall evaluate the technicals to see if we retest 1934 and trade into the 1800's. We did get the 1941 gap fill finally last week.
The Nasdaq has resistance now at 2090, 2130, and 2190, and a weak close would likely prevent the index from reaching the 2 higher resistance levels. If we close below the opening at 2078, there is a very good chance we will trade lower this week and fill that gap at 1975 at a minimum, and may retest the prior low of 1934 (from which we made a modest key reversal from the gap fill at 1941, which now appears to be very temporary).
If the generals (e.g. IBM, NVDA) and strong relative strength sectors(e.g. medical/healthcare,biotechs,insurance/banks, REITS/homebuilders) can finally capitulate, then I would be encouraged to go long from a swing and position trading standpoint, as that would be one of the last pieces of the puzzles for making a bottom (a classic selling climax would be fantastic technically but late bear mkt bottoms often don't have a true climax). That does not mean we could not have a retest in the late Summer or Fall, but it could represent a very good tradeable bottom. It might indeed be the bottom for many stocks if not the indices.
For today, the Nasdaq TRIN is a negative 2.14, with a/d at a critical 14/19 (near the criterion), and up/down volume 2/7, on light volume of 800M shares, projecting out to around 1.5.-1.7B shares. Stocks can decline on low volume days, and if we are going to have declining volume this Summer, then there is a historically a downward bias.
The NYSE TRIN is a negative 1.49, which is in line with the more volatile Nasdaq reading of 2.14. Up/down volume is worse than 2/3, on overall volume of 550M shares. The Dow turned negative in the last hour after having rallied a bit, and the 10,500 area has provided some resistance as expected.
The a/d and TRIN are to be watched very closely during the mid-day, to see if any countertrend rallies can gather real momentum or if they will fail and cause a weak close. |
