EXREMELY OVERSOLD
Closing Technical Market Comments
Tue Sep 24th 2002
thetechtrader.com
By Harry Boxer, The Technical Trader (www.thetechtrader.com)
Today was extremely volatile with the market was all over the place. They started out with a gap down, and then the market immediately rallied sharply, going to the morning highs very quickly, inside of an hour. They then came down steadily on a retest into the lunch hour that took the S&P 500 and Dow to new lows, but the Nasdaq held very nicely substantially above the earlier low.
Then they had another swing up into the Fed announcement. No action was taken and at which point the market sold off sharply, but it held intraday technical support. As a result, they rallied even more sharply, taking out the Nasdaq highs but not the S&P 500 and Dow highs. Finally, once again late in the day when they failed to break out the market sold off rather sharply. Just a little bounce at the close prevented the S&P 500 and the Dow from closing at the lows for the day.
Net on the day, the Dow was down another 189, getting closer to the 7532 low we had in July. The S&P 500 was down 14 ½, but the Nasdaq 100 remarkably was up a quarter today, managing to get into the plus column with the help of the SOX Index, up 3.31. The Composite was only down 3.
It seems that the Nasdaq is telegraphing that it’s trying to bottom by being firm in the face of a bad Dow and S&P 500 decline today. It has led this market down & may very well lead it back up. So we’ll see if that’s of any consequence over the next day or so. We still may see lower prices and test lower levels before we’re done, but I think we’re getting real close. he NYSE McClellan Oscillator today closed at an extremely oversold -212 and that may result in a nice rally tomorrow.
A review of the technicals showed 22 ½ down to 9 ¾ up on New York, about 5 to 3 negative on Nasdaq. The up/down volume was positive on Nasdaq by 8-7, but negative by about 4-1 on New York. Total volume was about 1 2/3 billion on New York and a similar amount on Nasdaq. So volume was not light.
It was a fairly heavy day, and the market had several volatile swings back and forth, but despite the volatility, the indices managed to contain themselves within a 25-point range on the Nasdaq 100 and within about a 10-12 point range on the S&P 500.
Many stocks on my board were actually up small fractions today. There was one outstanding winner, Amgen up more than 2 points, and one big loser, IBM down 3.62.Only Emulex, down 1.05, and OVTI, which got slammed on big volume to 6 today, down 2 points, were the only other point-plus changes today.
Reviewing the overall chart patterns, the indices are now down near the lower end of the intermediate down-channels on the S&P 500 and the Nasdaq 100 and may technically rebound, as a result. However, the more key factor is that we’ve remained below the July lows on the Nasdaq 100 for two days and have not been able to get back through 855-60 resistance, getting up to 861 today and backing off sharply. So we’re still in jeopardy of making lower lows and maybe sharply so over the day next day or two before we finish this.
But reiterating, the oscillators are extremely oversold and are indicating a potential rally may be upon us shortly.
Good trading!
Harry |
