On considering some charts...
Lets go out on a limb and call this a major market meltdown, or at least tech meltdown, until proven wrong. Conditions couldn't be better with many stocks failing their test of highs or pulling right back into them after brief excursions into the sun. Besides, what's one more kick at the can, only to be proven wrong by the mighty Nasdaq? Maybe this time...
Looks like I was a day early in calling the swing high... amazing what a little bit of just ok eco news can do with this psycho market. However, I do believe that today's stunning reversal on the SP futures, SPX, NDX and COMPX bears watching (no pun intended).
- Last Oct the Nasdaq gapped up and never looked back. I do not think the same conditions are in place now. So, consider this a look back... follow through will be telling in the next couple of days.
- SOX are certainly strong (were?) and I view them as the one key group to watch. If they break down big, it may be time to batten down the hatches. Myself, moved highfliers all to cash and are readying the *big* sell key in futures. None of this namby pamby hedging. Mind you, I won't short the market outright unless the market tells me to. I'm not out to make a statement, just some money.
- New highs on the nas failed to confirm the COMPX - understandably they are contracting today and lows ticking up. Seems to confirm the "one last jump up" scenario I've been cooking up here.
- Cumulative volume on the Nas flattened as a result of today, and that's a first in about 10 days. What follows this flattening is likely key.
- Looks like VIX has confirmed a swing high. I bet if it weren't for the eco news excuse earlier this week, the Nas would not have had its last lunge and VIX would have confirmed right away
- BKX continues to suck.
- And surprise surprise surprise, TYX sticks above the long term trend line dating back to Oct 98.
Lets watch the SOX generals and key index support levels. Best case - sideways and narrow range day Thursday, followed by more selling roughly in size, or worse, than today (Wednesday).
With the INDU and SPX already in motion... it will be interesting to see what happens if tech falls apart. Rotation? Exit? How many John Q Public know anything about value? Nah, they will just sell and sit on cash. All at once. With predictable results. (If the hackers don't disable their web sites first! Ok, they won't sell all at once because they have been conditioned not to!)
LOL!
Market breadth Feb 9 2000
Some interesting trend lines dating to Oct 18 1999 and Oct 1998 coming into view on the NYA and SPX. 'Course the Nasdaq is so far off of its trend lines, its too scary to contemplate them visiting them soon. Or is it? ;)
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