I don't want to put too much weight on Friday's action given the light volume. There was broad-based selling on Friday. Just about every index on my screen closed in the red... I only see 5 sector indices that closed up for the day. No doubt the bears are hoping this is the start of something big but I think we have to wait for some real volume to come back before judging.
Below are charts of the Nasdaq, QQQQ (Nasdaq 100), S&P 500, Russell 2000, Research in Motion (RIMM), Google (GOOG) and Apple Computer (AAPL):
I talked about potential support in the 2400 area on Thursday. Friday's low was 2,400.72 and the index closed at 2,401.18 -- so it's teetering. Note that the 50-day moving average was broken on Friday.
The Cubes also closed below the 50-day moving average. I found it interesting that out of the universe of approximately 7,000 stocks there are only 30 with worse %b readings. %b tells where a stock is in relation to its Bollinger Bands -- 0 is at the lower band and 1.0 is at the upper Band. % b for QQQQ is -0.18 right now.
The S&P is teasing the bears with its close on the July trendline.
The Russell is bounced off of its 50-day moving average...
The bear in me would love to short RIMM under Friday’s low, with a stop near Friday’s high, but there’s no way I’d hold it through earnings on Thursday. So I’ll just watch for now…
Well the earnings reaction is in and it looks even worse to me now. It could find support at the 50-day moving average though so next week should be interesting for RIMM...
On Friday I heard somebody on CNBC list Google as one of the "big winners of the year". I have to disagree with that. It's up just under 10% for the year and is actually 3% below its January 2006 high. There are tons of stocks which have performed better. I think GOOG's high dollar-per-share price causes problems for some people in judging performance.
Similarly, Apple is up about 14% for the year but is also under its January 2006 high.
No changes
| Trend | Nasdaq | S&P 500 | Russell 2000 |
| Primary | Up | Up | Up |
| Intermediate | Up | Up | Up |
| Short-term | Down | Up | Down |
(+) Indicates an upward reclassification today
(-) Indicates a downward reclassification today
Lat Indicates a Lateral trend
Hey Mike,
Nice call on RIMM last week.
Always enjoy reading you. There's so much to learn here. Thanks for introducing me to NR7. I've incorporated it into my trading in the last few months and so far, it has been very profitable.
Happy Holidays to you and your family!
Hi Michael,
I just wanted to say thank you for placing a link to one of my posts on your website a few days ago. (Triple MACD divergence in the S&P)
I really do appreciate it.
I just posted another chart that you might find interesting.. This chart is a 6 year weekly chart of the nasdaq with market sentiment giving a sell signal now.. I placed the link below if you are interested. Thanks again and have a happy healthy new year to you and your family..
Kevin
http://kevinsmarketblog.blogspot.com/2006/12/nasdaq-market-sentiment.html
Thanks Jamie & happy holidays to you too.
Kevin -- good post & nice chart