THis has to be the dullest greater than 2% selloff I've ever seen. In fact the indices were down about 4% and volume dropped drastically from last week's levels. There was practically nothing hitting my scanner due to the fact that I have a volume surge filter. Today almost felt like a session right before or after a long holiday weekend. It seems obvious to me that the market fell under its own weight and there was not just a buyer's strike but a participation strike today. I know I came in a little gun shy this morning and the lack of setups hitting my scanner kept me happily in cash.
The indices have now given back all of Friday's gains and I'm wondering if they "need to" give back all of Thursday's late day rally off of the lows as well. I'm certainly not moved to be a buyer right now...
The Nasdaq & S&P 500 are back in the vicinity of their July lows. Will those levels become support once again or finally flip to resistance?
The Russell continues it's magnetic pull to its 50 and 200-day moving averages.
Here's a chart of the dollar which had a rough day:
These trends are getting whiplash...
| Trend | Nasdaq | S&P 500 | Russell 2000 |
|---|---|---|---|
| Long-Term | Down | Down | Up |
| Intermediate | Down | Down(-) | Lat(-) |
| Short-term | Down(-) | Down(-) | Up |
(+) 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.
Volume looks average too me. It is just not as high as the crazy 2 weeks that just passed.
Ban all selling is the fourth step. The second step is to expand the ban list to encompass all stocks. And then you have to hold all new long positions for a minimum of five days before selling (third step). And THEN ban all selling.
I figure we are still a good 72-hours away from those drastic measures.
Hi Mike,
What are the rules that you use to create your universe of stocks? Thanks.
Nick.
Mike,
I guess the low SKF volume means everyone is convinced that Paulson's plan will save the sector! I thought it was interesting that the SKF has basically stopped working. My only problem is that the volume is so much lower with this downwards price action and its hard to believe the move will last.
-Hunter
SKF:
http://stockcharts.com/h-sc/ui?s=skf&p=D&yr=0&mn=6&dy=0&id=p71475662083
Ban all selling, enforcing minimum 5 days hold on all new long positions, etc., this is going to put many daytraders out of work.
Volume was average to high on a lot of commodity names that I look at. Shorts are getting "squeezed" into longs that work inverse to the doomed dollar.
flyboy...fyi, I was only being sarcastic. Hard times call for dry humor.
Flyboy - the daytraders - are the humor in this madness - they hardly count - and are the last to drop their pants when the short squeeze begins. Shit, did I mean to say this?
Banning all selling might be too drastic.
The answer lies in the uptick rule. Don't just restore it. Improve it. A modest proposal:
"No common or preferred stock shall be traded in the United States except at a price greater than or equal to the preceding price."
The market will never go down!
Nick,
Are you asking about swing trading or day trading?
Mike,
If you have different set of rules for swing and day trading, would you mind sharing both sets? If it is a long list, then I am interested in daytrading. Thanks.