Obviously things got ugly today, especially if you were long. I guess I should just be glad that I didn't get caught long, as opposed to being salty because I got shaken out of my shorts last week. (Argh! OK, I'm over it.) Earnings warnings were largely to blame for today's selling. There were several in the morning and we got a few more during the after-hours session. Earnings is always a tricky time to trade because you just never know when 'Company X' is going to drop a bomb.
All of the major indices slid below their 50-day moving averages today and the NASDAQ broke its 200 DMA too. So things don't look too good in that respect, but on the other hand the indices are still just range bound. Each of the indices is near its lower Bollinger Band and the potential support of the June lows. So I'd look for the bulls to try to make a stand in this area. I'd love to see some hammers develop over the next day or two. I've added several good looking longs which are now pulling back near their middle Bollinger Bands. Some kind of reversal candlestick here would be all I'd need to jump in on the long side in those names.
The warning parade continues tonight. Amazing how instantly, swiftly, and viciously people are unloading these poor little stocks... This kind of bloodletting can make you wonder just what all the excitement's been about for the last year or more!
Also amazing how quickly the Nazz can travel the length of its BB range - just a few days this time - and then bounce/drop sharply just when everyone is convinced a new trend is afoot. Looking at the chart over this year, we have had to go through several of these swift whipsaws from one end of the BB to the other. Today's was the quickest yet...but the BB is also thinner than it has been for much of the year... Not sure what it all means, if anything, but what a difference from last year when these whipsaws would lead to new highs and not just more churn within a trading range.