Well, I had told you readers that I would be back on Thursday but surely you don't expect me to leave you readers by yourself on a day like today, do you?? I hope all of you our there did not get hurt much out there today. Let's get straight to business and see where the next support levels are.
As always, the S&P first.
It broke down through some important levels today and closed right above MA(50), something which the bulls could derive some comfort from. But wait a minute! Don't get too comfortable there. With the Cisco results being what they are in after hours, this level will be broken right at the open tomorrow. The next support comes from 1083, and I wouldn't be surprised to see the markets open right over here tomorrow and then continue to head south. Which brings us to the next major support level - the famous 1040 mark. Its still quite some distance away, so this downside, at least technically, could have a lot of room left.
Over to the NASDAQ. No "good news" here as far as MA(50) is concerned as the market broke through it easily. The next support levels - 2192 and 2133.
Its not looking good out there. The major support levels seem quite some distance away and I don't expect dip buyers to step in until close to these levels. Do yourself a favor and don't try and call the bottom unless you are a day trader. The momentum is clearly with the bears and let's see what they can do with it. If you are not comfortable going short, just sit and watch from the sidelines!
Take care and good luck!
3 comments:
That NSDQ chart is brutal, cliff brutal. I'm kinda surprised to see market sentiment turn so quickly. I've been slightly bearish for a while but even i knew all these news numbers were coming out long before these past two days. China even said they hoped to tame down there growth to around 9% GDP for the quarter, and the US Indexes are getting hammered by "no new news". Ultimately i think the markets were pricing in more participation aka bailouts from the US gov and according to the Fed it aint coming any time soon. But more than anything this seems to be a technical drop as the head and shoulders formation comes more and more into play as this thing plays out and dont forget my 1938 chart prediction. Futures look bad for tomorrow too, the only thing that saves tomorrow is jobless claims, which i predict will be in line with expectations. With Friday looking like a possible minefield for data, its highly likely (%60) that this week closes down more than %5 for each index! A pessimistic attitude has to be turned around for anything positive to last more than an hour or so.
Insightful as always, Bill. On the last line, the pessimistic attitude has to actually become worse for the market to actually turn around! When all the gloom and doom predictions start coming in, that will actually be the time for the markets to turn. To early for that to happen right now. We will have to see a few failed bounces first in order for that to happen as the momentum lies with the bears now. And yes, I don't expect the job numbers to be the savior tomorrow. And just as a teaser in the end, I have little faith in obvious patterns such as head and shoulders anymore!
Be bold trust the easy solution ;-)
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