Things got really interesting today. The indices sold off about 2% in the face of decent economic numbers. Even worse, they ended about 3% lower from where they were when those economic reports were released at 10:00. Apparently we're back in an environment of worrying about beating whisper numbers. Word is that today's numbers failed to do so and that's why we rolled over. The sharp reversal came on some of the highest volume of the summer, so that kind of distribution has to concern the bulls. The technical damage doesn't end there -- the Nasdaq broke its March uptrend today. That may not be such a big deal though, this could just be more fanning out of the March rally. The Nasdaq will need to make a higher high to continue the fanning though.
The rest of the week should be quite telling. Do bulls lock in gains ahead of the long weekend or does some of that alleged sidelined money come rushing in to provide support. Also, there's still the looming payroll report on Friday.
Some more downgrades to the short-term trends...
| Trend | Nasdaq | S&P 500 | Russell 2000 |
|---|---|---|---|
| Long-Term | Up | Up | Up |
| Intermediate | Up | Up | Up |
| 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.
I was quite surprised to see the surge in volume. That really got my attention this time.
"The technical damage doesn't end there -- the Nasdaq broke its March uptrend today."
Not yet, unless you're using a log chart which you are not. Wish you were right since i'm short; but that's the July uptrend line that was broken...not March.
oh my gosh! It's a double top setting up to!
Dave,
Good catch. Actually, the chart I posted was supposed to be a log chart. I had "log scale" checked but I guess it doesn't work at StockCharts.com.
I was basing my comment on what I saw on my TeleChart chart, which is a true log scale chart. Nevertheless, it does show that the break of the log trendline isn't necessarily the end of the world.