Sellers ruled again today. They closed the market on its lows for the second straight session and left every sector & index in the red once again. The last five sessions have showcased some impressive selling. The bulls haven't been able to hold the Dow, Nasdaq or S&P 500 above their lower Bollinger Bands for more than a few hours.
So while the market is undoubtedly weak it appears that the ingredients are all lining up for a decent bounce. All of the indices have finally reached oversold stochastic levels and T2108 dropped to 24.37 today -- approaching its oversold level of 20. I'll have to put some long term money to work once that level is broken.
So we're getting there but I don't think we can bottom with these days in which buyers rush in early in the day. I still want to see that morning which feels like the selling will never stop followed by a late day rally. That will tell me that sellers have run out of ammo, at least in the short term.
The Nasdaq broke last week's low and like I said yesterday, I'm now eyeing the November lows for potential support.
The S&P broke 1380. Next stop 1360?
Ditto to what I wrote yesterday -- the Dow just has to retest 12,000 -- especially now that it's only 50 points away.
The Russell 2000 broke the bottom of its range and all of a sudden that 200-day moving average seems real close:
No changes
| Trend | Nasdaq | S&P 500 | Russell 2000 |
| Primary | Up | Up | Up |
| Intermediate | Down | Down | Down |
| Short-term | Down | Down | Down |
(+) Indicates an upward reclassification today
(-) Indicates a downward reclassification today
Lat Indicates a Lateral trend
i love this type of stuff from you. money - thx
I just want add that I too appreciate very much TraderMike's end-of-day wrapups. http://tradermike.net/smilies/yahoo_bigsmile.gif
:d
Perhaps I can help out a little by suggesting that everyone take him up on his suggestion of a couple of days ago to the effect that readers should take a look at $NAHLR and $NYA50R on StockCharts (or the like on other charting services) to see the excellent intermediate term buying opportunities that arise when these two indices go very low, oh, say, once every 9 months or so. (Back out to show three years of data, the maximum for StockCharts, and compare with, say, SPY.)
I too will be looking to put long-term money to work if the indicators go much lower--- after I sweat out the imminent pullback thing (which Mike is diligently warning us about).
Speaking of pullbacks, take a look at the pullback of SPY that started on 5/23/06. I suppose that it's a pertinent case-history. The market was then down around 5.5% below the prior high. The pullback put it up to within about 2.6% of the prior high (someone should consult TraderX regarding the Fibonacci implications), and the subsequent bottom was about 7.5% below the prior high. The pullback took about 7 trading days from bottom to top. Also, from the prior high on about 5/9/06 it took 10 trading days until the close after which the pullback began; we are now 9 trading days into the current drop.
Those are some seriously ugly charts!
Great post. Money, indeed.
When you say you are going to put some "long term money to work", seeing as though you are a day trader, how long is long-term to you? Keep up the good work and thanks for a great site.
Thanks Mike
While T2108 is getting close to 20, T2107 (% above 200 day avg) isn't even close. Major bottoms occur when it drops below 20 (1987, 1990, 1994, 1998, 2002).
You're welcome guys.
MT -- Long term, meaning cash in my retirement account. I don't know how long I'll stay invested. It could be weeks, months or years. Or it could be days if I get stopped out real quick.
Tim -- That's true but there have several "less major" :d bottoms made with just T2108 below 20. A few of those are documented in my archives. The big question is will this selloff turn into a huge event like the times you mentioned. That remains to be seen. I will keep an eye on T2107 though, it certainly has more room to drop. I'd feel pretty good about entering some positions with it under 50 and T2108 under 20.
Anybody in the CNBC Portfolio Challenge have this happen to them today?
Is this a joke? No , Mike.
I signed up and entered my stock purchases/transactions today, Monday, March 5th. They were posted to my "portfolio" BUT with Friday's closing prices!???!
I knew they would screw something up, but I didn't think it would be something so simple as daily prices. Maybe I should ask for some 2004 prices if they are backdating transactions! :)
This game has the feel of being made up by some advertising dork on Madison Avenue who's never heard the stock market.
If this is the way it's gonna be run, with its already "too stupid" contest rules, CNBC will become the laughing "stock" it has often so richly deserved (pun intended).
I emailed them as I know others have also. I'll post up if they ever fix it.
Keep up the good work, Mike. :)
B. Hopper
Regarding the CNBC BS Game...you should have seen it last year. Talk about a bad joke. Some parts of the country weren't allowed onto the servers for days at a time, my picks never showed up, so I re-entered them and, of course, guess what happened. When it came time to sell, I was told I didn't have an account. When my account mysteriously reappeared and came back online, I was out 14% at a shot. Free money was given away every day for answering a trivia question but it seems that only people in New York and New England got the extra cash. And on top of all that, some idiot who got in on a whim- just wanted to see if he could win a car- went all in on some biotech and made like a million dollars in a day. He's prolly hadda sell his Maz by now, the clown.
Anyways, it certainly doesn't show who is the real stockpicker around here because no one would do their real money like that. The whole thing is stupid. Needless to say, I haven't paid any attention to it but I am sorry you are habing similar troubles.
I do wonder what Mark Haynes is going to say tomorrow after the futures point down, Goldman disappoints and the retail numbers come out as weak as can be. He needs his short skirt, golden pompoms and sweater with a giant "G" for Goldilocks on it to do the show on most mornings. He rolls his eyes in disbelief better than anyone in business journalism, in my opinion. At least Kudlow just tells guests to shut up or talks over them.
Erin Burnett and Rick Santelli are the only ones credible on the news side of the network. I hope she goes to Fox Business Channel and they are an even-keeled organization. Maybe my wish list is too long already?
The technicals are quite shaky right now, so look for a nice sell-off for the next few days. Otherwise, I am screwed out of my puts in the cubes and spiders. But something tells me they will finish well in-the-money.
Best of luck to all!