NEARING THE BOTTOM OF THE DOWN CHANNELS
Closing Technical Market Comments
Tue Sep 3rd 2002
thetechtrader.com
By Harry Boxer, The Technical Trader (www.thetechtrader.com)
September started out about as bad as the bulls could have feared. This month is already a historically poor month for markets, but since we’ve been in a bear market for 2 ½ years and down so much this year as well, it was anticipated by some that perhaps Sept. might have been a decent month. However, at least for today the pullback and retest we’ve been going through for the last six days continued with a vengeance on Monday.
The indices gapped down sharply at the opening and never got any rally going at all. It continued making lower lows and/or drifting sideways all day, and in the last hour broke support intraday and closed at the lows for the day going away, down 356 on the Dow, 38 on the S&P 500, 51 on the Comp, and 43 on the Nasdaq 100. The SOX Index was down a hefty 5% today, 15 1/2 points.
The technicals were very negative, almost climactic. Advance-declines were 740 up, 2510 down on New York, and 809 to 2544 on Nasdaq. But up/down volume was even worse, with 11 to 1 negative on New York, or 1.12 billion down and only 102 million up. Total volume was about 1 ¼ billion. As you can see it was more than a 90% down day, which is getting very climactic.
On Nasdaq the figures were even worse, with 1 1/4 billion shares down and only 84 million shares up, or about 15 to 1 negative. That’s about as climactic as we’ve seen in a long time. Total volume there was about 1 1/3 billion.
Of special note today, the VIX and VXN were up sharply, noting a sharp rise in fear in the markets. The VIX was pushing 44 at the close, up over 8 points on the day, and the VXN was up nearly 4, near 59. That’s signaling a bit of panic setting in.
A review of my personal board showed a 100% down day, which I only see normally near important lows or selling climaxes. Those stocks were led on the downside by IBM down more than 3, Microsoft 2, eBay 2, Amgen down 2, and several others down a point or more. The market leaders clearly led the market down today.
Unfortunately, since short-term support was violated this morning on the Nasdaq 100 from the August 14 low, there’s a solid chance we may see another 20-30 points down tomorrow morning on the NDX, but I believe at that point we’re going to have a turnaround rebound rally.
We’re also getting close to the bottom of the 7 day down channels off the recent highs so I’ll be looking to see if the market can right itself tomorrow and give us a decent rebound rally, but the current slide has been vicious and we may eventually at least retest the July-August lows.
Good trading!
Harry
Don, I did not have to search long to find this fairly positive vision of tomorrow. The VIX is now stretched over 10% above the 10 day moving average indicating that Mr. Boxer's short term vision of the future could be correct.
Check the pink line. That is the 10 day exponential moving average for the VIX at 36.39. The Vix closed over 20% above that level at 43.86:
stockcharts.com[h,a]daclyyay[pb50,200!d20,2!c20!c10][vc60][iUb14!Uk14!La12,26,9]&pref=G
Look at that chart and tell me if you see the VIX over 20% above or below the 10 day EMA at any other time the last 6 months?
RtS |
