Here is a quick look at some key stocks in the way they define the market. First, both GE and IBM bounced off of the previous intraday low each formed 4 days ago. INTC bounced off an intraday support that is above its previous intraday low, and MSFT bounced off of its previous intraday low. CSCO like INTC bounced off intraday support above its previous low, but in this case it is a very well defined and strong intraday support. This kept it from further losses. The speculative high techs faired the best. CMGI bounced off intraday support way above its previous intraday low. AMZN and YHOO did the best by gapping down and then instead of following through the stocks went back to close their gaps. Right now both stocks appears to be at a resistance in the middle of the gap, and YHOO has bounced off o this resistance.DELL is in a precarious position. This stock is below stronger intraday resistance but above weaker intraday support and is now challenging for a second time its support which it rests at over several 15-min bars. Not a sign of strength in my book. However, DELL has not tested its previous intraday low.
I see many of the more "blue chip" type of stocks have tested their previous intraday low and are retesting it. Many of the speculative high tech issues have put in an intraday low higher, and in some cases much higher, than its previous intraday low made 4 days ago. The stock in the most impressive cases have not retested its intraday low after establishing one today, but instead have attempted to close the gap down made at the beginning of the trading day. These stocks are in particular the Internet stocks like AMZN and YHOO. Many stocks have gapped down and either are attempting to close their gap or still have the open gap that will provide resistance to a positive close today, once they run around and attempt to close their gap.
So in summation except for the Internet stocks and speculative news driven techs like CMGI, stocks in many cases have tested their previous intraday low and have not yet recovered in any significant way from this position. There is also resistance above in many cases, including the gap down the stock initially made today, to provide resistance to a positive open. Considering that the money is tending to move out of the "blue chip" type of stocks, I do not think this situation will readily improve. But many stocks including DELL are still above important supports that have been left untouched on this sell off unlike the sell off they encountered 4 days ago where if I remember correctly they were saved by a program buy.
The market is still in a good position to bottom and move up from here. But how far it moves up and whether it closes in positive terratory is very debatable right now. This sell off for today should of come as no surprise. Look at Friday's and yesterday's performance on what should of been up days from oversold terratory. Yesterday was particularly disappointing. The market has had for a period of time now an unwillingness to rally even in the face of good news. This is a particularly ominous sign of very negative sentiment. Money is continued to be pulled out and placed in bonds. Add up the evidence and it spelled a further downside to the market. But it looks like the tech speculative issues may do the best, including stocks like YHOO and AMZN.
Bob Graham |
