We had another meltdown on mild volume today. The Nasdaq made a new 18-month low today and the S&P is just a few points from doing the same. Despite the ugly price action I'm not seeing much fear. The VIX is about 20% beneath its January peak and volume shows no sign of panic.
On the bright side, (if you're a bull) T2108 (% of NYSE stocks above their 40-day moving averages) is back below 20. Given the apparent complacency in this market though I won't be surprised to see T2108 drop into single digits before the market bounces.
Last week I posted a chart of the Mid-cap MDY index, which was showing good relative strength. That outperformance came to a quick end:
Perhaps we'll see some fear when the S&P 500 takes out its January low, which is just 3 points away. I'm sure the specialists are salivating over triggering the stops below 1270:
And here's the Nasdaq chart:
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.
Mike,
Excellent analysis. One thing though. I see many sites, not just your's refer to the S&P500 low of 1270. It's useful to remember though that the ES low was around 1256 and no co-incidence ES limit down that day was around 1255.
Seems to me we have a lower retest than many traders are anticipating?
LiggerPig
Hey Michael,
Well we definitely had zero fear today. That light volume spells trouble for the bulls. It seems focus is on the SPX and DOW, but the Naz is already below the January low, and has broken long-term support.
The Bear is Alive.
Mike