Technical Analysis: Stocks Give Up Another Big Level
internetnews.com
As the Dow and S&P give up decade-old support, investor fear is nowhere to be found.
March 2, 2009
By Paul Shread: More stories by this author:
It's genuinely ugly out there, and perhaps the ugliest thing of all is that sentiment gauges have yet to show much in the way of fear.
Put-call ratios and sentiment surveys are nowhere near the extremes they hit just a few months ago, which suggests that stocks may need to fall further to generate the capitulation necessary for a major bottom.
The Dow and S&P (first two charts below) are giving up 10-year trading ranges here, and those old lows are now likely to become formidable resistance. Those levels begin at 741-752 and 768-804 on the S&P and 6971-7192 and 7450-7552 on the Dow.
So how low can stocks go?
The S&P's next support zone is right here, at 680-700, with 600-620 below that, while the Dow has potential support at 6300-6500 and 5800-6000.
The Nasdaq (third chart) and the broad market may be performing better, but that's been little help. The Nasdaq's November low was 1295.48, with 1253 the last strong support below the 2002 low of 1108. To the upside, the Nasdaq faces resistance at 1386-1400 and 1434.
And finally, the Wall Street Journal noted today that former Fed Chairman Alan Greenspan recently related how in the late 1950s he found that stock prices and corporate equipment orders were related, a relationship that he said continues to hold true. Just one more reason why the study of stock market movement is anything but academic. It is the ultimate gauge of corporate and consumer confidence, and the message continues to be bleak.
Upgrades Can't Save Dell, Cisco
Good news for Dell, Cisco and Apple investors just meant falling less than the rest of the stock market.
Share this Article
Digg Del.icio.us furl StumbleUpon BlinkList Newsvine Magnolia Facebook Tailrank Slashdot Technorati Google Bookmarks Yahoo Favorites Windows Live Ask
Print this Article
Comment on this article
Email this Article
March 2, 2009
By Paul Shread: More stories by this author:
internetnews.com
The 16-month-old bear market added another "worst ever" to its list of accomplishments today, sending stocks plunging in the weakest start to the month of March in market history.
Every stock in the big-cap Nasdaq 100 ended the day lower — with the lone exception of drug developer Warner Chilcott (NASDAQ: WCRX), which added 0.8% on an upgrade.
The major indexes lost 4% or more each, and even Dell (NASDAQ: DELL) and Cisco (NASDAQ: CSCO) lost more than 1% each despite Argus Research upgrades.
Apple (NASDAQ: AAPL) was another stock not suffering too badly, off 1.5% on speculation that the company could make an iMac product announcement later this month.
Nokia (NYSE: NOK) lost 6.6% on problems with its 5800 touch screen smart phone. Research In Motion (NASDAQ: RIMM) lost 7.7%, while Palm (NASDAQ: PALM) managed a 1% gain.
Seagate (NASDAQ: STX) and Nvidia (NASDAQ: NVDA) also suffered steep declines.
The cause of the market's troubles was yet another steep loss and bailout of AIG (NYSE: AIG). With no end in sight for financial woes, the Dow and S&P ended the day at fresh 12-year lows.
The Nasdaq lost 55 to 1322, the S&P 500 fell 34 to 700, and the Dow tumbled 299 to 6763. Volume declined to 8.98 billion shares on the NYSE, and 2.37 billion on the Nasdaq. Decliners led by a 35-3 margin on the NYSE, and 25-3 on the Nasdaq. Downside volume was 98% on the NYSE, and 96% on the Nasdaq. New highs-new lows were 10-877 on the NYSE, and 1-602 on the Nasdaq. |
