HARD TO GET OPTIMISTIC, BUT BRIEF SNAPBACK DUE
By Harry Boxer, The Technical Trader (www.thetechtrader.com)
The pattern has been remarkably similar for three days. The market opens mixed, goes down in the morning, sideways mid-day, drops in the afternoon. On Friday at least we had a late rally; today we did not, as all indices closed at the lows for the day going away.
The Nasdaq 100 closed at a new 4 1/2–year low, making a nominal new low below the July 24th low. The S&P 500 and Dow are still pretty far from those lows and could be setting up potential positive divergences.
Short-term, technicals are getting oversold, and we may be due for a snapback, but it’s hard to get optimistic in a market like this. Today, Nasdaq wasn’t able to do anything more than 8-10 point rallies all day, which is very feeble.
The selling pressure continued on Monday and the technicals certainly bore that out. With the Dow down 269 1/2 and the S&P 500 down nearly 30, the advance-declines on New York were about 790 up and 2450 down. Up/down volume was about 8-1 negative; it had been a lot worse earlier, about 11 or 12 to 1.
On Nasdaq, where the Composite dropped 42, the 100 dropped 35, and the SOX index dropped a horrendous 17 1/2, near 6%, the advance-declines were 9 1/2 to 24. Declining volume over advancing volume was about 9 to 1, a very poor day.
During the day the VIX and VXN moved sharply higher again. The VIX closed at 49.31, up almost 4. The VXN closed at 67.52, up over 2, and they’re getting back to the levels where we were a couple of weeks ago when we temporarily bottomed and then rallied sharply.
So perhaps over the next day or so we’ll get a more meaningful market rally. I was expecting the market to rally today and I was very surprised & disappointed that it didn’t.
A review of my personal board showed all stocks were down except for little OVTI, up 11 cents today. Everything else was down, led by QLogic, down 2 1/2, but no other stocks were down as much as 2.
The leading losers were IBM down 1.89, Qualcomm down 1.80 to a new 52-week low, eBay down 1.50, and Brocade down 1.67, a big percentage loss there.
So the bear market continues and we’re getting lower lows on the Nasdaq 100. In just four days, it’s down nearly 14% or about 135 points, so with any luck I expect at least a snapback rally at some point tomorrow morning.
Good trading!
Harry |
