The early rally attempt failed today and we ended up with some follow-through on yesterday's 3% drops. Like I said yesterday, I think we're in for a retest of the January lows -- especially the Nasdaq.
I was asked for my thoughts on Microsoft's chart. Basically, I think the Yahoo deal broke the stock. The reaction broke a trendline dating back to June 2006. Here's the daily chart followed by the weekly.
Trend Table
No changes
| Trend | Nasdaq | S&P 500 | Russell 2000 |
| Primary | Down | Down | Down |
| 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'm simply using the indices' relations to their 200, 50 and 10-day moving averages to tell me the long, intermediate and short-term trends, respectively.
Very helpful on Microsoft, Mike. Thank You.
With friends like CSCO down 7% after today's close, tech indices like XCI and NDX don't need enemies in their fight to hold over the Jan lows: XCI, 775 today, may go below its Jan low of 765 (down only .1%) 2 minutes after tomorrow's Feb 7 open, and NDX, down 1.83% today, will need a miracle to stop at 1700, down only 2.3% more, else it be the second indicator suggesting the Jan lows won't hold.
Holding over the Jan lows for non-tech indices like the DJIA, SPX, NYA and RUT isn't much to look forward to with those lows being 5%-6% below (-700 Dow points for example), at which point the indices will have completed near 20% declines from the Oct '06 highs in what some will view as the 1st down leg to a lower low (below Aug '06) in a new bear market.
Today's McClellan and other indicators suggest that (barring some federal intervention) the indices may be going down 5% plus, to new '08 lows, within days.