T/A--Stockcharts + S&P:"Market Summary" + "NASDAQ Could Fall Further"
Arthur Hill's Market Summary, 10/6/00
stockcharts.com
Paul Cherney, S&P: "NASDAQ Could Fall Further"
personalwealth.com
-------------------------------------------------------------------------------------------------------
Edited for emphasis and ease of reading.
>>> Friday October 06, 2000 (4:42 pm ET)
NASDAQ Could Fall Further
By Paul Cherney, S&P Market Analyst
NEW YORK, Oct. 06 (Standard & Poor's) - In Friday's session, the NASDAQ printed a low of 3314.91, just inside one of the zones of projected downside risk 3318-3248, but the volume lacked conviction, or should I say, "the volume lacked capitulation."
The NASDAQ's preliminary total volume figure for Friday was only 1.8 billion shares. The market probably needs to generate a day of 2.2 billion shares.
As of 3:30 pm EDT on Friday:
...the CBOE's Put/Call ratios offered readings which were only modestly suggestive that a low could be near,
...Total Put/Call was 0.71,
...Equity Only was 0.58.
I don't consider either of these readings high enough to constitute capitulation levels.
You do not need excessive P/C ratios to mark a bottom, but when you see an end of day:
...Total Put/Call ratio greater than .90, and
...Equity Only P/C ratio greater than 0.75,
it sure offers a multitude of market observers a sign that most of the sellers have probably already sold.
This helps people rationalize that the low is already in, and the more people who are convinced that the low is in, the more potential money there is to fuel a leg higher.
On Monday, the bond market will be closed for the bank holiday celebrating Columbus Day, so there could be slightly thinner participation in the equity markets.
The NASDAQ is testing an area of resistance in the 3346-3379 level, due to the stairstep decline during Friday's session, the index has stacked resistances: the next resistance is 3382-3408 then 3411-3432.
Immediate support is in the 3333-3314 area, but there is still risk to print all the way down to 3239.<<< |
