October 2009 Archives

Sorry for the late post but I got caught up watching baseball among other things. We got our oversold bounce today. It was helped along by the better than expected GDP and probably by some month-end and year-end mutual fund buying. It was a broad based rally but volume was disappointing relative to yesterday. Still, the market remains oversold and I have to assume the path of least resistance is up (or sideways) in the very short term. We have a Federal Reserve interest rate decision next Wednesday, so that will likely be the focus in the coming days.

Some upgrades today...

It was a bloodbath today, especially in small caps and Nasdaq stocks. Midday I was surprised at how many stocks were popping up on my scanner which were down between 4 and 9%. There was a lot of technical damage done as many stocks and indices broke their 50-day moving averages. (T2108 plunged all the way down to 25 today.) Volume surged across the board and every sector was down on the day. We're also starting to see October lows get broken. The Russell 2000 did just that today and in doing so confirmed its double-top. It's fallen a long way, 9%, in a short amount of time so I wouldn't expect much more downside without at least some sideways movement first.

I won't be surprised to see some snap-back on the Nasdaq too but look out for the 50-day moving average turning to resistance.

On a percentage basis the S&P is twice as far away from its October low as the Nasdaq. So one could argue that it has room to play catch up but I'd be careful trying to chase it here.

Here's part of tonight's Worden report, which sums things up nicely:

Oversold...But

Trading stats have careened to extremely negative levels--indicating, paradoxically, that the market is either short-term oversold or at least very likely within a day of it. I think it's quite normal for a market to bounce off of a significant support level for a short time, while getting ready to take a walloping dive. The market has probably built up hefty oversold pressures, but not enough to win the battle of the October low. Before this skirmish is over, I strongly suspect the October low will have been shattered. But for the immediate period ahead, a lot of shorts could be bludgeoned.

Why do I think we're into oversold territory? To a great extent I'm going by the Dominant PV Relationship, which is a big-time PDVU (price down, volume up), consisting of a whopping 1780 stocks. That smacks of panic selling, and panic-anything seldom pays off.

But I believe the trading stats will carry the battle, and they are very negative. All Eight Important Averages were down today, averaging a jumbo -2.65%. Nothing was down less than one percent.

All 16 Breadth Groupings were Super-Decisively Negative.

More downgrades...

We had another strange day today. Once again the market had wild swings early on but this day was really marked by the relative weakness of the Nasdaq. It was like a tug-o-war all day between the Nasdaq and the Dow. So the Nasdaq lost a bit of its relative strength today by playing catch up (catch down?) with the S&P 500. It was about 1% weaker than the S&P today but both indices broke their March trendlines today. That's not a huge deal though, I'm more concerned with the 50-day moving averages on those indices and the October low on the Russell 2000.

The Russell is now clearly below its 50 DMA so I'm downgrading the intermediate trend again

We had a pretty wild morning today which started off with about 1% gains in the first half hour but a rally in the dollar caused a sharp reversal in stocks. Those gains quickly turned to losses and that was about all she wrote for the day. The S&P 500, Russell 2000 and Dow lost just over 1% today. Even worse, they're starting to show some technical damage. I wrote about how I felt like the indices were masking some deterioration in leading stocks and it looks like that game is coming to an end. The small caps continue to look the worst. The Russell 2000 broke its March trendline on Friday and closed below its 50-day moving average today. To top it off, it's not far from breaking the October low which would confirm a double-top.

The transportation index is also in danger of confirming a double top. Followers of Dow Theory would say that doesn't bode well for the broader market.

The S&P is a couple of days behind the Russell. It's now threatening its March trendline and is one bad day away from its 50-day moving average. It also dropped back under its September highs today, so that 1070 - 1075 zone may have flipped back to resistance from support.

It's no surprise that the Nasdaq is showing the most resilience with the recent impressive moves by the likes of AAPL, AMZN and GOOG. But if the broader market really starts sliding those stocks could see some sharp reversals and take the Nasdaq with it.

The Russell 2000 closed a little bit below its 50-day moving average so I'm setting its intermediate trend to lateral.

So we've had two days of chop since my last update and the indices are basically right where they were at Wednesday's close. Like the indices, my outlook has barely changed. It still seems like the indices are masking underlying weakness in some key stocks. It seems like people just have programs set to buy the broad market whenever it dips to the September highs. The Nasdaq and S&P 500 have been churning just above those support levels for the last week and a half. I can't see them staying in those ranges much longer and I suspect the break will be to the downside.

The short term trends flipped to up on Thursday and back to down on Friday.

We had a pretty good reversal today which made outside days on the S&P 500 and Nasdaq. Both of those indices made marginal new highs intraday and had volume increases today. So that qualifies them for key reversal day status. As usual though, we need to get some follow-through selling for this to be nothing but another blip in the multi-month rally.

As usual, I don't think there was one thing responsible for the selloff this afternoon. I think there was a technical aspect to it thanks to the indices failing to hold the marginal new highs they made around 10:30. I was already leery of that early push to new highs because Goldman Sachs (GS) was showing weakness as well as the 2:00 Beige Book release. We got a little selling when that data hit the wires but things stabilized until an analyst note about Wells Fargo brought out more selling. (Did the GS action telegraph the later WFC analyst note? )

Whatever the reason(s) for the selling, I think there's good reason to get cautious here. I haven't liked the way many stocks, which had good numbers, have reacted to their earnings reports. Goldman, which is regarded as the cream of the crop of banks has been weak ever since its earnings:

The other day I thought Intel (INTC) was set to recover from its post-earnings slide but it has continued to slide and is now back in its old trading range.

TXN has had a disappointing post-earnings reaction.

Ditto for AA.

Add IBM to the club.

So there's nothing really terrible in any of those charts. They just tell me that those stocks (and the broader market) got a little ahead of themselves. We're starting to see some cracks in the indices now too. They had been able to mask those slides that individual stocks have had but that changed today. It's most evident in the small caps. Note that the Russell 2000 was not able to take out its September highs like the other indices have done.

The S&P 500 and Nasdaq are now in danger of slipping back under their September highs...

Downgrades to all of the short-term trends today:

The market cruised higher once again today and it's looking even stronger in the after-hours session thanks to earnings from AAPL and TXN. Apple has traded on both sides of its all-time high of 202.96 tonight. I'm a little concerned about it doing a gap & crap tomorrow, like AA and INTC did after their good earnings reports last week. The $200 level should be a battlefield tomorrow and I'll be watching closely for a play long or short off of the action around 200 -- assuming it even gets down to 200. Here's the aforementioned Intel chart, which has pulled back and now looks ready for a push higher.

Here are the index charts.

No changes

It was "all systems go" for the bull case today. Many of the indices powered to new 52-week closing and intraday highs. The Dow also reclaimed the 10,000 level (for about the 10,000th time). There's no stink at all on today's action, volume even increased to (slightly) above average levels. However, it's still early in earnings season and the indices are still extended. It will be important for the good reports to keep rolling in to keep the market afloat.

No changes

This was a pretty quiet day thanks to the bank holiday driven lack of volume. The indices are a little higher than they were at my last recap but my outlook is basically the same. I'm a little more worried about earnings season kicking off though since the indices are right at the September (and multi-month) highs and short-term overbought. That's telling me that the earnings reports had better be stellar or else down we go. We'll have a good idea real soon as earnings start to pour in tomorrow. There is a good amount of economic data due this week as well -- Philly Fed, Retail Sales, FOMC Minutes, CPI... It should be an action packed week, and I didn't even mention options expiration.

No changes

So we're at the point in the quarter, earnings season, at which I don't like to focus on the technicals. The moves over the next three weeks will be primarily driven by the big earnings news of each day. We saw that today with the market getting off to a strong start thanks to Alcoa's (AA) report. Alcoa gapped up to new 52-week+ high but then faded the rest of the session. By the close it had fallen back under its September. While it still gained 1% on the day the intraday action was nothing to write home about. I think action lie this may be common this quarter, especially for stocks which are near 52-week highs.

Some of the leading stocks, like GOOG and AAPL, closed down on the day. That may be a sign that the market's getting a little tired here. The indices showed some indecision today. The S&P 500 was able to break it's pattern of lower-highs by one point before selling took it back down. The Nasdaq fell one point shy of making a higher-high and the Russell 2000 fell about 15 shy. Both the SPY and QQQQ made near-doji patterns which is a sign of an intraday stalemate/indecision. So there are some mixed messages out there. We'll just have to see where earnings takes us.

No changes

Sorry for the late post but I got caught up watching baseball among other things. We got our oversold bounce today. It was helped along by the better than expected GDP and probably by some month-end and year-end mutual fund buying. It was a broad based rally but volume was disappointing relative to yesterday. Still, the market remains oversold and I have to assume the path of least resistance is up (or sideways) in the very short term. We have a Federal Reserve interest rate decision next Wednesday, so that will likely be the focus in the coming days.

Some upgrades today...

It was a bloodbath today, especially in small caps and Nasdaq stocks. Midday I was surprised at how many stocks were popping up on my scanner which were down between 4 and 9%. There was a lot of technical damage done as many stocks and indices broke their 50-day moving averages. (T2108 plunged all the way down to 25 today.) Volume surged across the board and every sector was down on the day. We're also starting to see October lows get broken. The Russell 2000 did just that today and in doing so confirmed its double-top. It's fallen a long way, 9%, in a short amount of time so I wouldn't expect much more downside without at least some sideways movement first.

I won't be surprised to see some snap-back on the Nasdaq too but look out for the 50-day moving average turning to resistance.

On a percentage basis the S&P is twice as far away from its October low as the Nasdaq. So one could argue that it has room to play catch up but I'd be careful trying to chase it here.

Here's part of tonight's Worden report, which sums things up nicely:

Oversold...But

Trading stats have careened to extremely negative levels--indicating, paradoxically, that the market is either short-term oversold or at least very likely within a day of it. I think it's quite normal for a market to bounce off of a significant support level for a short time, while getting ready to take a walloping dive. The market has probably built up hefty oversold pressures, but not enough to win the battle of the October low. Before this skirmish is over, I strongly suspect the October low will have been shattered. But for the immediate period ahead, a lot of shorts could be bludgeoned.

Why do I think we're into oversold territory? To a great extent I'm going by the Dominant PV Relationship, which is a big-time PDVU (price down, volume up), consisting of a whopping 1780 stocks. That smacks of panic selling, and panic-anything seldom pays off.

But I believe the trading stats will carry the battle, and they are very negative. All Eight Important Averages were down today, averaging a jumbo -2.65%. Nothing was down less than one percent.

All 16 Breadth Groupings were Super-Decisively Negative.

More downgrades...

We had another strange day today. Once again the market had wild swings early on but this day was really marked by the relative weakness of the Nasdaq. It was like a tug-o-war all day between the Nasdaq and the Dow. So the Nasdaq lost a bit of its relative strength today by playing catch up (catch down?) with the S&P 500. It was about 1% weaker than the S&P today but both indices broke their March trendlines today. That's not a huge deal though, I'm more concerned with the 50-day moving averages on those indices and the October low on the Russell 2000.

The Russell is now clearly below its 50 DMA so I'm downgrading the intermediate trend again

We had a pretty wild morning today which started off with about 1% gains in the first half hour but a rally in the dollar caused a sharp reversal in stocks. Those gains quickly turned to losses and that was about all she wrote for the day. The S&P 500, Russell 2000 and Dow lost just over 1% today. Even worse, they're starting to show some technical damage. I wrote about how I felt like the indices were masking some deterioration in leading stocks and it looks like that game is coming to an end. The small caps continue to look the worst. The Russell 2000 broke its March trendline on Friday and closed below its 50-day moving average today. To top it off, it's not far from breaking the October low which would confirm a double-top.

The transportation index is also in danger of confirming a double top. Followers of Dow Theory would say that doesn't bode well for the broader market.

The S&P is a couple of days behind the Russell. It's now threatening its March trendline and is one bad day away from its 50-day moving average. It also dropped back under its September highs today, so that 1070 - 1075 zone may have flipped back to resistance from support.

It's no surprise that the Nasdaq is showing the most resilience with the recent impressive moves by the likes of AAPL, AMZN and GOOG. But if the broader market really starts sliding those stocks could see some sharp reversals and take the Nasdaq with it.

The Russell 2000 closed a little bit below its 50-day moving average so I'm setting its intermediate trend to lateral.

So we've had two days of chop since my last update and the indices are basically right where they were at Wednesday's close. Like the indices, my outlook has barely changed. It still seems like the indices are masking underlying weakness in some key stocks. It seems like people just have programs set to buy the broad market whenever it dips to the September highs. The Nasdaq and S&P 500 have been churning just above those support levels for the last week and a half. I can't see them staying in those ranges much longer and I suspect the break will be to the downside.

The short term trends flipped to up on Thursday and back to down on Friday.

We had a pretty good reversal today which made outside days on the S&P 500 and Nasdaq. Both of those indices made marginal new highs intraday and had volume increases today. So that qualifies them for key reversal day status. As usual though, we need to get some follow-through selling for this to be nothing but another blip in the multi-month rally.

As usual, I don't think there was one thing responsible for the selloff this afternoon. I think there was a technical aspect to it thanks to the indices failing to hold the marginal new highs they made around 10:30. I was already leery of that early push to new highs because Goldman Sachs (GS) was showing weakness as well as the 2:00 Beige Book release. We got a little selling when that data hit the wires but things stabilized until an analyst note about Wells Fargo brought out more selling. (Did the GS action telegraph the later WFC analyst note? )

Whatever the reason(s) for the selling, I think there's good reason to get cautious here. I haven't liked the way many stocks, which had good numbers, have reacted to their earnings reports. Goldman, which is regarded as the cream of the crop of banks has been weak ever since its earnings:

The other day I thought Intel (INTC) was set to recover from its post-earnings slide but it has continued to slide and is now back in its old trading range.

TXN has had a disappointing post-earnings reaction.

Ditto for AA.

Add IBM to the club.

So there's nothing really terrible in any of those charts. They just tell me that those stocks (and the broader market) got a little ahead of themselves. We're starting to see some cracks in the indices now too. They had been able to mask those slides that individual stocks have had but that changed today. It's most evident in the small caps. Note that the Russell 2000 was not able to take out its September highs like the other indices have done.

The S&P 500 and Nasdaq are now in danger of slipping back under their September highs...

Downgrades to all of the short-term trends today:

The market cruised higher once again today and it's looking even stronger in the after-hours session thanks to earnings from AAPL and TXN. Apple has traded on both sides of its all-time high of 202.96 tonight. I'm a little concerned about it doing a gap & crap tomorrow, like AA and INTC did after their good earnings reports last week. The $200 level should be a battlefield tomorrow and I'll be watching closely for a play long or short off of the action around 200 -- assuming it even gets down to 200. Here's the aforementioned Intel chart, which has pulled back and now looks ready for a push higher.

Here are the index charts.

No changes

It was "all systems go" for the bull case today. Many of the indices powered to new 52-week closing and intraday highs. The Dow also reclaimed the 10,000 level (for about the 10,000th time). There's no stink at all on today's action, volume even increased to (slightly) above average levels. However, it's still early in earnings season and the indices are still extended. It will be important for the good reports to keep rolling in to keep the market afloat.

No changes

This was a pretty quiet day thanks to the bank holiday driven lack of volume. The indices are a little higher than they were at my last recap but my outlook is basically the same. I'm a little more worried about earnings season kicking off though since the indices are right at the September (and multi-month) highs and short-term overbought. That's telling me that the earnings reports had better be stellar or else down we go. We'll have a good idea real soon as earnings start to pour in tomorrow. There is a good amount of economic data due this week as well -- Philly Fed, Retail Sales, FOMC Minutes, CPI... It should be an action packed week, and I didn't even mention options expiration.

No changes

So we're at the point in the quarter, earnings season, at which I don't like to focus on the technicals. The moves over the next three weeks will be primarily driven by the big earnings news of each day. We saw that today with the market getting off to a strong start thanks to Alcoa's (AA) report. Alcoa gapped up to new 52-week+ high but then faded the rest of the session. By the close it had fallen back under its September. While it still gained 1% on the day the intraday action was nothing to write home about. I think action lie this may be common this quarter, especially for stocks which are near 52-week highs.

Some of the leading stocks, like GOOG and AAPL, closed down on the day. That may be a sign that the market's getting a little tired here. The indices showed some indecision today. The S&P 500 was able to break it's pattern of lower-highs by one point before selling took it back down. The Nasdaq fell one point shy of making a higher-high and the Russell 2000 fell about 15 shy. Both the SPY and QQQQ made near-doji patterns which is a sign of an intraday stalemate/indecision. So there are some mixed messages out there. We'll just have to see where earnings takes us.

No changes

Sorry for the late post but I got caught up watching baseball among other things. We got our oversold bounce today. It was helped along by the better than expected GDP and probably by some month-end and year-end mutual fund buying. It was a broad based rally but volume was disappointing relative to yesterday. Still, the market remains oversold and I have to assume the path of least resistance is up (or sideways) in the very short term. We have a Federal Reserve interest rate decision next Wednesday, so that will likely be the focus in the coming days.

Some upgrades today...

It was a bloodbath today, especially in small caps and Nasdaq stocks. Midday I was surprised at how many stocks were popping up on my scanner which were down between 4 and 9%. There was a lot of technical damage done as many stocks and indices broke their 50-day moving averages. (T2108 plunged all the way down to 25 today.) Volume surged across the board and every sector was down on the day. We're also starting to see October lows get broken. The Russell 2000 did just that today and in doing so confirmed its double-top. It's fallen a long way, 9%, in a short amount of time so I wouldn't expect much more downside without at least some sideways movement first.

I won't be surprised to see some snap-back on the Nasdaq too but look out for the 50-day moving average turning to resistance.

On a percentage basis the S&P is twice as far away from its October low as the Nasdaq. So one could argue that it has room to play catch up but I'd be careful trying to chase it here.

Here's part of tonight's Worden report, which sums things up nicely:

Oversold...But

Trading stats have careened to extremely negative levels--indicating, paradoxically, that the market is either short-term oversold or at least very likely within a day of it. I think it's quite normal for a market to bounce off of a significant support level for a short time, while getting ready to take a walloping dive. The market has probably built up hefty oversold pressures, but not enough to win the battle of the October low. Before this skirmish is over, I strongly suspect the October low will have been shattered. But for the immediate period ahead, a lot of shorts could be bludgeoned.

Why do I think we're into oversold territory? To a great extent I'm going by the Dominant PV Relationship, which is a big-time PDVU (price down, volume up), consisting of a whopping 1780 stocks. That smacks of panic selling, and panic-anything seldom pays off.

But I believe the trading stats will carry the battle, and they are very negative. All Eight Important Averages were down today, averaging a jumbo -2.65%. Nothing was down less than one percent.

All 16 Breadth Groupings were Super-Decisively Negative.

More downgrades...

We had another strange day today. Once again the market had wild swings early on but this day was really marked by the relative weakness of the Nasdaq. It was like a tug-o-war all day between the Nasdaq and the Dow. So the Nasdaq lost a bit of its relative strength today by playing catch up (catch down?) with the S&P 500. It was about 1% weaker than the S&P today but both indices broke their March trendlines today. That's not a huge deal though, I'm more concerned with the 50-day moving averages on those indices and the October low on the Russell 2000.

The Russell is now clearly below its 50 DMA so I'm downgrading the intermediate trend again

We had a pretty wild morning today which started off with about 1% gains in the first half hour but a rally in the dollar caused a sharp reversal in stocks. Those gains quickly turned to losses and that was about all she wrote for the day. The S&P 500, Russell 2000 and Dow lost just over 1% today. Even worse, they're starting to show some technical damage. I wrote about how I felt like the indices were masking some deterioration in leading stocks and it looks like that game is coming to an end. The small caps continue to look the worst. The Russell 2000 broke its March trendline on Friday and closed below its 50-day moving average today. To top it off, it's not far from breaking the October low which would confirm a double-top.

The transportation index is also in danger of confirming a double top. Followers of Dow Theory would say that doesn't bode well for the broader market.

The S&P is a couple of days behind the Russell. It's now threatening its March trendline and is one bad day away from its 50-day moving average. It also dropped back under its September highs today, so that 1070 - 1075 zone may have flipped back to resistance from support.

It's no surprise that the Nasdaq is showing the most resilience with the recent impressive moves by the likes of AAPL, AMZN and GOOG. But if the broader market really starts sliding those stocks could see some sharp reversals and take the Nasdaq with it.

The Russell 2000 closed a little bit below its 50-day moving average so I'm setting its intermediate trend to lateral.

So we've had two days of chop since my last update and the indices are basically right where they were at Wednesday's close. Like the indices, my outlook has barely changed. It still seems like the indices are masking underlying weakness in some key stocks. It seems like people just have programs set to buy the broad market whenever it dips to the September highs. The Nasdaq and S&P 500 have been churning just above those support levels for the last week and a half. I can't see them staying in those ranges much longer and I suspect the break will be to the downside.

The short term trends flipped to up on Thursday and back to down on Friday.

We had a pretty good reversal today which made outside days on the S&P 500 and Nasdaq. Both of those indices made marginal new highs intraday and had volume increases today. So that qualifies them for key reversal day status. As usual though, we need to get some follow-through selling for this to be nothing but another blip in the multi-month rally.

As usual, I don't think there was one thing responsible for the selloff this afternoon. I think there was a technical aspect to it thanks to the indices failing to hold the marginal new highs they made around 10:30. I was already leery of that early push to new highs because Goldman Sachs (GS) was showing weakness as well as the 2:00 Beige Book release. We got a little selling when that data hit the wires but things stabilized until an analyst note about Wells Fargo brought out more selling. (Did the GS action telegraph the later WFC analyst note? )

Whatever the reason(s) for the selling, I think there's good reason to get cautious here. I haven't liked the way many stocks, which had good numbers, have reacted to their earnings reports. Goldman, which is regarded as the cream of the crop of banks has been weak ever since its earnings:

The other day I thought Intel (INTC) was set to recover from its post-earnings slide but it has continued to slide and is now back in its old trading range.

TXN has had a disappointing post-earnings reaction.

Ditto for AA.

Add IBM to the club.

So there's nothing really terrible in any of those charts. They just tell me that those stocks (and the broader market) got a little ahead of themselves. We're starting to see some cracks in the indices now too. They had been able to mask those slides that individual stocks have had but that changed today. It's most evident in the small caps. Note that the Russell 2000 was not able to take out its September highs like the other indices have done.

The S&P 500 and Nasdaq are now in danger of slipping back under their September highs...

Downgrades to all of the short-term trends today:

The market cruised higher once again today and it's looking even stronger in the after-hours session thanks to earnings from AAPL and TXN. Apple has traded on both sides of its all-time high of 202.96 tonight. I'm a little concerned about it doing a gap & crap tomorrow, like AA and INTC did after their good earnings reports last week. The $200 level should be a battlefield tomorrow and I'll be watching closely for a play long or short off of the action around 200 -- assuming it even gets down to 200. Here's the aforementioned Intel chart, which has pulled back and now looks ready for a push higher.

Here are the index charts.

No changes

It was "all systems go" for the bull case today. Many of the indices powered to new 52-week closing and intraday highs. The Dow also reclaimed the 10,000 level (for about the 10,000th time). There's no stink at all on today's action, volume even increased to (slightly) above average levels. However, it's still early in earnings season and the indices are still extended. It will be important for the good reports to keep rolling in to keep the market afloat.

No changes

This was a pretty quiet day thanks to the bank holiday driven lack of volume. The indices are a little higher than they were at my last recap but my outlook is basically the same. I'm a little more worried about earnings season kicking off though since the indices are right at the September (and multi-month) highs and short-term overbought. That's telling me that the earnings reports had better be stellar or else down we go. We'll have a good idea real soon as earnings start to pour in tomorrow. There is a good amount of economic data due this week as well -- Philly Fed, Retail Sales, FOMC Minutes, CPI... It should be an action packed week, and I didn't even mention options expiration.

No changes

So we're at the point in the quarter, earnings season, at which I don't like to focus on the technicals. The moves over the next three weeks will be primarily driven by the big earnings news of each day. We saw that today with the market getting off to a strong start thanks to Alcoa's (AA) report. Alcoa gapped up to new 52-week+ high but then faded the rest of the session. By the close it had fallen back under its September. While it still gained 1% on the day the intraday action was nothing to write home about. I think action lie this may be common this quarter, especially for stocks which are near 52-week highs.

Some of the leading stocks, like GOOG and AAPL, closed down on the day. That may be a sign that the market's getting a little tired here. The indices showed some indecision today. The S&P 500 was able to break it's pattern of lower-highs by one point before selling took it back down. The Nasdaq fell one point shy of making a higher-high and the Russell 2000 fell about 15 shy. Both the SPY and QQQQ made near-doji patterns which is a sign of an intraday stalemate/indecision. So there are some mixed messages out there. We'll just have to see where earnings takes us.

No changes

Sorry for the late post but I got caught up watching baseball among other things. We got our oversold bounce today. It was helped along by the better than expected GDP and probably by some month-end and year-end mutual fund buying. It was a broad based rally but volume was disappointing relative to yesterday. Still, the market remains oversold and I have to assume the path of least resistance is up (or sideways) in the very short term. We have a Federal Reserve interest rate decision next Wednesday, so that will likely be the focus in the coming days.

Some upgrades today...

It was a bloodbath today, especially in small caps and Nasdaq stocks. Midday I was surprised at how many stocks were popping up on my scanner which were down between 4 and 9%. There was a lot of technical damage done as many stocks and indices broke their 50-day moving averages. (T2108 plunged all the way down to 25 today.) Volume surged across the board and every sector was down on the day. We're also starting to see October lows get broken. The Russell 2000 did just that today and in doing so confirmed its double-top. It's fallen a long way, 9%, in a short amount of time so I wouldn't expect much more downside without at least some sideways movement first.

I won't be surprised to see some snap-back on the Nasdaq too but look out for the 50-day moving average turning to resistance.

On a percentage basis the S&P is twice as far away from its October low as the Nasdaq. So one could argue that it has room to play catch up but I'd be careful trying to chase it here.

Here's part of tonight's Worden report, which sums things up nicely:

Oversold...But

Trading stats have careened to extremely negative levels--indicating, paradoxically, that the market is either short-term oversold or at least very likely within a day of it. I think it's quite normal for a market to bounce off of a significant support level for a short time, while getting ready to take a walloping dive. The market has probably built up hefty oversold pressures, but not enough to win the battle of the October low. Before this skirmish is over, I strongly suspect the October low will have been shattered. But for the immediate period ahead, a lot of shorts could be bludgeoned.

Why do I think we're into oversold territory? To a great extent I'm going by the Dominant PV Relationship, which is a big-time PDVU (price down, volume up), consisting of a whopping 1780 stocks. That smacks of panic selling, and panic-anything seldom pays off.

But I believe the trading stats will carry the battle, and they are very negative. All Eight Important Averages were down today, averaging a jumbo -2.65%. Nothing was down less than one percent.

All 16 Breadth Groupings were Super-Decisively Negative.

More downgrades...

We had another strange day today. Once again the market had wild swings early on but this day was really marked by the relative weakness of the Nasdaq. It was like a tug-o-war all day between the Nasdaq and the Dow. So the Nasdaq lost a bit of its relative strength today by playing catch up (catch down?) with the S&P 500. It was about 1% weaker than the S&P today but both indices broke their March trendlines today. That's not a huge deal though, I'm more concerned with the 50-day moving averages on those indices and the October low on the Russell 2000.

The Russell is now clearly below its 50 DMA so I'm downgrading the intermediate trend again

We had a pretty wild morning today which started off with about 1% gains in the first half hour but a rally in the dollar caused a sharp reversal in stocks. Those gains quickly turned to losses and that was about all she wrote for the day. The S&P 500, Russell 2000 and Dow lost just over 1% today. Even worse, they're starting to show some technical damage. I wrote about how I felt like the indices were masking some deterioration in leading stocks and it looks like that game is coming to an end. The small caps continue to look the worst. The Russell 2000 broke its March trendline on Friday and closed below its 50-day moving average today. To top it off, it's not far from breaking the October low which would confirm a double-top.

The transportation index is also in danger of confirming a double top. Followers of Dow Theory would say that doesn't bode well for the broader market.

The S&P is a couple of days behind the Russell. It's now threatening its March trendline and is one bad day away from its 50-day moving average. It also dropped back under its September highs today, so that 1070 - 1075 zone may have flipped back to resistance from support.

It's no surprise that the Nasdaq is showing the most resilience with the recent impressive moves by the likes of AAPL, AMZN and GOOG. But if the broader market really starts sliding those stocks could see some sharp reversals and take the Nasdaq with it.

The Russell 2000 closed a little bit below its 50-day moving average so I'm setting its intermediate trend to lateral.

So we've had two days of chop since my last update and the indices are basically right where they were at Wednesday's close. Like the indices, my outlook has barely changed. It still seems like the indices are masking underlying weakness in some key stocks. It seems like people just have programs set to buy the broad market whenever it dips to the September highs. The Nasdaq and S&P 500 have been churning just above those support levels for the last week and a half. I can't see them staying in those ranges much longer and I suspect the break will be to the downside.

The short term trends flipped to up on Thursday and back to down on Friday.

We had a pretty good reversal today which made outside days on the S&P 500 and Nasdaq. Both of those indices made marginal new highs intraday and had volume increases today. So that qualifies them for key reversal day status. As usual though, we need to get some follow-through selling for this to be nothing but another blip in the multi-month rally.

As usual, I don't think there was one thing responsible for the selloff this afternoon. I think there was a technical aspect to it thanks to the indices failing to hold the marginal new highs they made around 10:30. I was already leery of that early push to new highs because Goldman Sachs (GS) was showing weakness as well as the 2:00 Beige Book release. We got a little selling when that data hit the wires but things stabilized until an analyst note about Wells Fargo brought out more selling. (Did the GS action telegraph the later WFC analyst note? )

Whatever the reason(s) for the selling, I think there's good reason to get cautious here. I haven't liked the way many stocks, which had good numbers, have reacted to their earnings reports. Goldman, which is regarded as the cream of the crop of banks has been weak ever since its earnings:

The other day I thought Intel (INTC) was set to recover from its post-earnings slide but it has continued to slide and is now back in its old trading range.

TXN has had a disappointing post-earnings reaction.

Ditto for AA.

Add IBM to the club.

So there's nothing really terrible in any of those charts. They just tell me that those stocks (and the broader market) got a little ahead of themselves. We're starting to see some cracks in the indices now too. They had been able to mask those slides that individual stocks have had but that changed today. It's most evident in the small caps. Note that the Russell 2000 was not able to take out its September highs like the other indices have done.

The S&P 500 and Nasdaq are now in danger of slipping back under their September highs...

Downgrades to all of the short-term trends today:

The market cruised higher once again today and it's looking even stronger in the after-hours session thanks to earnings from AAPL and TXN. Apple has traded on both sides of its all-time high of 202.96 tonight. I'm a little concerned about it doing a gap & crap tomorrow, like AA and INTC did after their good earnings reports last week. The $200 level should be a battlefield tomorrow and I'll be watching closely for a play long or short off of the action around 200 -- assuming it even gets down to 200. Here's the aforementioned Intel chart, which has pulled back and now looks ready for a push higher.

Here are the index charts.

No changes

It was "all systems go" for the bull case today. Many of the indices powered to new 52-week closing and intraday highs. The Dow also reclaimed the 10,000 level (for about the 10,000th time). There's no stink at all on today's action, volume even increased to (slightly) above average levels. However, it's still early in earnings season and the indices are still extended. It will be important for the good reports to keep rolling in to keep the market afloat.

No changes

This was a pretty quiet day thanks to the bank holiday driven lack of volume. The indices are a little higher than they were at my last recap but my outlook is basically the same. I'm a little more worried about earnings season kicking off though since the indices are right at the September (and multi-month) highs and short-term overbought. That's telling me that the earnings reports had better be stellar or else down we go. We'll have a good idea real soon as earnings start to pour in tomorrow. There is a good amount of economic data due this week as well -- Philly Fed, Retail Sales, FOMC Minutes, CPI... It should be an action packed week, and I didn't even mention options expiration.

No changes

So we're at the point in the quarter, earnings season, at which I don't like to focus on the technicals. The moves over the next three weeks will be primarily driven by the big earnings news of each day. We saw that today with the market getting off to a strong start thanks to Alcoa's (AA) report. Alcoa gapped up to new 52-week+ high but then faded the rest of the session. By the close it had fallen back under its September. While it still gained 1% on the day the intraday action was nothing to write home about. I think action lie this may be common this quarter, especially for stocks which are near 52-week highs.

Some of the leading stocks, like GOOG and AAPL, closed down on the day. That may be a sign that the market's getting a little tired here. The indices showed some indecision today. The S&P 500 was able to break it's pattern of lower-highs by one point before selling took it back down. The Nasdaq fell one point shy of making a higher-high and the Russell 2000 fell about 15 shy. Both the SPY and QQQQ made near-doji patterns which is a sign of an intraday stalemate/indecision. So there are some mixed messages out there. We'll just have to see where earnings takes us.

No changes

Sorry for the late post but I got caught up watching baseball among other things. We got our oversold bounce today. It was helped along by the better than expected GDP and probably by some month-end and year-end mutual fund buying. It was a broad based rally but volume was disappointing relative to yesterday. Still, the market remains oversold and I have to assume the path of least resistance is up (or sideways) in the very short term. We have a Federal Reserve interest rate decision next Wednesday, so that will likely be the focus in the coming days.

Some upgrades today...

It was a bloodbath today, especially in small caps and Nasdaq stocks. Midday I was surprised at how many stocks were popping up on my scanner which were down between 4 and 9%. There was a lot of technical damage done as many stocks and indices broke their 50-day moving averages. (T2108 plunged all the way down to 25 today.) Volume surged across the board and every sector was down on the day. We're also starting to see October lows get broken. The Russell 2000 did just that today and in doing so confirmed its double-top. It's fallen a long way, 9%, in a short amount of time so I wouldn't expect much more downside without at least some sideways movement first.

I won't be surprised to see some snap-back on the Nasdaq too but look out for the 50-day moving average turning to resistance.

On a percentage basis the S&P is twice as far away from its October low as the Nasdaq. So one could argue that it has room to play catch up but I'd be careful trying to chase it here.

Here's part of tonight's Worden report, which sums things up nicely:

Oversold...But

Trading stats have careened to extremely negative levels--indicating, paradoxically, that the market is either short-term oversold or at least very likely within a day of it. I think it's quite normal for a market to bounce off of a significant support level for a short time, while getting ready to take a walloping dive. The market has probably built up hefty oversold pressures, but not enough to win the battle of the October low. Before this skirmish is over, I strongly suspect the October low will have been shattered. But for the immediate period ahead, a lot of shorts could be bludgeoned.

Why do I think we're into oversold territory? To a great extent I'm going by the Dominant PV Relationship, which is a big-time PDVU (price down, volume up), consisting of a whopping 1780 stocks. That smacks of panic selling, and panic-anything seldom pays off.

But I believe the trading stats will carry the battle, and they are very negative. All Eight Important Averages were down today, averaging a jumbo -2.65%. Nothing was down less than one percent.

All 16 Breadth Groupings were Super-Decisively Negative.

More downgrades...

We had another strange day today. Once again the market had wild swings early on but this day was really marked by the relative weakness of the Nasdaq. It was like a tug-o-war all day between the Nasdaq and the Dow. So the Nasdaq lost a bit of its relative strength today by playing catch up (catch down?) with the S&P 500. It was about 1% weaker than the S&P today but both indices broke their March trendlines today. That's not a huge deal though, I'm more concerned with the 50-day moving averages on those indices and the October low on the Russell 2000.

The Russell is now clearly below its 50 DMA so I'm downgrading the intermediate trend again

We had a pretty wild morning today which started off with about 1% gains in the first half hour but a rally in the dollar caused a sharp reversal in stocks. Those gains quickly turned to losses and that was about all she wrote for the day. The S&P 500, Russell 2000 and Dow lost just over 1% today. Even worse, they're starting to show some technical damage. I wrote about how I felt like the indices were masking some deterioration in leading stocks and it looks like that game is coming to an end. The small caps continue to look the worst. The Russell 2000 broke its March trendline on Friday and closed below its 50-day moving average today. To top it off, it's not far from breaking the October low which would confirm a double-top.

The transportation index is also in danger of confirming a double top. Followers of Dow Theory would say that doesn't bode well for the broader market.

The S&P is a couple of days behind the Russell. It's now threatening its March trendline and is one bad day away from its 50-day moving average. It also dropped back under its September highs today, so that 1070 - 1075 zone may have flipped back to resistance from support.

It's no surprise that the Nasdaq is showing the most resilience with the recent impressive moves by the likes of AAPL, AMZN and GOOG. But if the broader market really starts sliding those stocks could see some sharp reversals and take the Nasdaq with it.

The Russell 2000 closed a little bit below its 50-day moving average so I'm setting its intermediate trend to lateral.

So we've had two days of chop since my last update and the indices are basically right where they were at Wednesday's close. Like the indices, my outlook has barely changed. It still seems like the indices are masking underlying weakness in some key stocks. It seems like people just have programs set to buy the broad market whenever it dips to the September highs. The Nasdaq and S&P 500 have been churning just above those support levels for the last week and a half. I can't see them staying in those ranges much longer and I suspect the break will be to the downside.

The short term trends flipped to up on Thursday and back to down on Friday.

We had a pretty good reversal today which made outside days on the S&P 500 and Nasdaq. Both of those indices made marginal new highs intraday and had volume increases today. So that qualifies them for key reversal day status. As usual though, we need to get some follow-through selling for this to be nothing but another blip in the multi-month rally.

As usual, I don't think there was one thing responsible for the selloff this afternoon. I think there was a technical aspect to it thanks to the indices failing to hold the marginal new highs they made around 10:30. I was already leery of that early push to new highs because Goldman Sachs (GS) was showing weakness as well as the 2:00 Beige Book release. We got a little selling when that data hit the wires but things stabilized until an analyst note about Wells Fargo brought out more selling. (Did the GS action telegraph the later WFC analyst note? )

Whatever the reason(s) for the selling, I think there's good reason to get cautious here. I haven't liked the way many stocks, which had good numbers, have reacted to their earnings reports. Goldman, which is regarded as the cream of the crop of banks has been weak ever since its earnings:

The other day I thought Intel (INTC) was set to recover from its post-earnings slide but it has continued to slide and is now back in its old trading range.

TXN has had a disappointing post-earnings reaction.

Ditto for AA.

Add IBM to the club.

So there's nothing really terrible in any of those charts. They just tell me that those stocks (and the broader market) got a little ahead of themselves. We're starting to see some cracks in the indices now too. They had been able to mask those slides that individual stocks have had but that changed today. It's most evident in the small caps. Note that the Russell 2000 was not able to take out its September highs like the other indices have done.

The S&P 500 and Nasdaq are now in danger of slipping back under their September highs...

Downgrades to all of the short-term trends today:

The market cruised higher once again today and it's looking even stronger in the after-hours session thanks to earnings from AAPL and TXN. Apple has traded on both sides of its all-time high of 202.96 tonight. I'm a little concerned about it doing a gap & crap tomorrow, like AA and INTC did after their good earnings reports last week. The $200 level should be a battlefield tomorrow and I'll be watching closely for a play long or short off of the action around 200 -- assuming it even gets down to 200. Here's the aforementioned Intel chart, which has pulled back and now looks ready for a push higher.

Here are the index charts.

No changes

It was "all systems go" for the bull case today. Many of the indices powered to new 52-week closing and intraday highs. The Dow also reclaimed the 10,000 level (for about the 10,000th time). There's no stink at all on today's action, volume even increased to (slightly) above average levels. However, it's still early in earnings season and the indices are still extended. It will be important for the good reports to keep rolling in to keep the market afloat.

No changes

This was a pretty quiet day thanks to the bank holiday driven lack of volume. The indices are a little higher than they were at my last recap but my outlook is basically the same. I'm a little more worried about earnings season kicking off though since the indices are right at the September (and multi-month) highs and short-term overbought. That's telling me that the earnings reports had better be stellar or else down we go. We'll have a good idea real soon as earnings start to pour in tomorrow. There is a good amount of economic data due this week as well -- Philly Fed, Retail Sales, FOMC Minutes, CPI... It should be an action packed week, and I didn't even mention options expiration.

No changes

So we're at the point in the quarter, earnings season, at which I don't like to focus on the technicals. The moves over the next three weeks will be primarily driven by the big earnings news of each day. We saw that today with the market getting off to a strong start thanks to Alcoa's (AA) report. Alcoa gapped up to new 52-week+ high but then faded the rest of the session. By the close it had fallen back under its September. While it still gained 1% on the day the intraday action was nothing to write home about. I think action lie this may be common this quarter, especially for stocks which are near 52-week highs.

Some of the leading stocks, like GOOG and AAPL, closed down on the day. That may be a sign that the market's getting a little tired here. The indices showed some indecision today. The S&P 500 was able to break it's pattern of lower-highs by one point before selling took it back down. The Nasdaq fell one point shy of making a higher-high and the Russell 2000 fell about 15 shy. Both the SPY and QQQQ made near-doji patterns which is a sign of an intraday stalemate/indecision. So there are some mixed messages out there. We'll just have to see where earnings takes us.

No changes

Sorry for the late post but I got caught up watching baseball among other things. We got our oversold bounce today. It was helped along by the better than expected GDP and probably by some month-end and year-end mutual fund buying. It was a broad based rally but volume was disappointing relative to yesterday. Still, the market remains oversold and I have to assume the path of least resistance is up (or sideways) in the very short term. We have a Federal Reserve interest rate decision next Wednesday, so that will likely be the focus in the coming days.

Some upgrades today...

It was a bloodbath today, especially in small caps and Nasdaq stocks. Midday I was surprised at how many stocks were popping up on my scanner which were down between 4 and 9%. There was a lot of technical damage done as many stocks and indices broke their 50-day moving averages. (T2108 plunged all the way down to 25 today.) Volume surged across the board and every sector was down on the day. We're also starting to see October lows get broken. The Russell 2000 did just that today and in doing so confirmed its double-top. It's fallen a long way, 9%, in a short amount of time so I wouldn't expect much more downside without at least some sideways movement first.

I won't be surprised to see some snap-back on the Nasdaq too but look out for the 50-day moving average turning to resistance.

On a percentage basis the S&P is twice as far away from its October low as the Nasdaq. So one could argue that it has room to play catch up but I'd be careful trying to chase it here.

Here's part of tonight's Worden report, which sums things up nicely:

Oversold...But

Trading stats have careened to extremely negative levels--indicating, paradoxically, that the market is either short-term oversold or at least very likely within a day of it. I think it's quite normal for a market to bounce off of a significant support level for a short time, while getting ready to take a walloping dive. The market has probably built up hefty oversold pressures, but not enough to win the battle of the October low. Before this skirmish is over, I strongly suspect the October low will have been shattered. But for the immediate period ahead, a lot of shorts could be bludgeoned.

Why do I think we're into oversold territory? To a great extent I'm going by the Dominant PV Relationship, which is a big-time PDVU (price down, volume up), consisting of a whopping 1780 stocks. That smacks of panic selling, and panic-anything seldom pays off.

But I believe the trading stats will carry the battle, and they are very negative. All Eight Important Averages were down today, averaging a jumbo -2.65%. Nothing was down less than one percent.

All 16 Breadth Groupings were Super-Decisively Negative.

More downgrades...

We had another strange day today. Once again the market had wild swings early on but this day was really marked by the relative weakness of the Nasdaq. It was like a tug-o-war all day between the Nasdaq and the Dow. So the Nasdaq lost a bit of its relative strength today by playing catch up (catch down?) with the S&P 500. It was about 1% weaker than the S&P today but both indices broke their March trendlines today. That's not a huge deal though, I'm more concerned with the 50-day moving averages on those indices and the October low on the Russell 2000.

The Russell is now clearly below its 50 DMA so I'm downgrading the intermediate trend again

We had a pretty wild morning today which started off with about 1% gains in the first half hour but a rally in the dollar caused a sharp reversal in stocks. Those gains quickly turned to losses and that was about all she wrote for the day. The S&P 500, Russell 2000 and Dow lost just over 1% today. Even worse, they're starting to show some technical damage. I wrote about how I felt like the indices were masking some deterioration in leading stocks and it looks like that game is coming to an end. The small caps continue to look the worst. The Russell 2000 broke its March trendline on Friday and closed below its 50-day moving average today. To top it off, it's not far from breaking the October low which would confirm a double-top.

The transportation index is also in danger of confirming a double top. Followers of Dow Theory would say that doesn't bode well for the broader market.

The S&P is a couple of days behind the Russell. It's now threatening its March trendline and is one bad day away from its 50-day moving average. It also dropped back under its September highs today, so that 1070 - 1075 zone may have flipped back to resistance from support.

It's no surprise that the Nasdaq is showing the most resilience with the recent impressive moves by the likes of AAPL, AMZN and GOOG. But if the broader market really starts sliding those stocks could see some sharp reversals and take the Nasdaq with it.

The Russell 2000 closed a little bit below its 50-day moving average so I'm setting its intermediate trend to lateral.

So we've had two days of chop since my last update and the indices are basically right where they were at Wednesday's close. Like the indices, my outlook has barely changed. It still seems like the indices are masking underlying weakness in some key stocks. It seems like people just have programs set to buy the broad market whenever it dips to the September highs. The Nasdaq and S&P 500 have been churning just above those support levels for the last week and a half. I can't see them staying in those ranges much longer and I suspect the break will be to the downside.

The short term trends flipped to up on Thursday and back to down on Friday.

We had a pretty good reversal today which made outside days on the S&P 500 and Nasdaq. Both of those indices made marginal new highs intraday and had volume increases today. So that qualifies them for key reversal day status. As usual though, we need to get some follow-through selling for this to be nothing but another blip in the multi-month rally.

As usual, I don't think there was one thing responsible for the selloff this afternoon. I think there was a technical aspect to it thanks to the indices failing to hold the marginal new highs they made around 10:30. I was already leery of that early push to new highs because Goldman Sachs (GS) was showing weakness as well as the 2:00 Beige Book release. We got a little selling when that data hit the wires but things stabilized until an analyst note about Wells Fargo brought out more selling. (Did the GS action telegraph the later WFC analyst note? )

Whatever the reason(s) for the selling, I think there's good reason to get cautious here. I haven't liked the way many stocks, which had good numbers, have reacted to their earnings reports. Goldman, which is regarded as the cream of the crop of banks has been weak ever since its earnings:

The other day I thought Intel (INTC) was set to recover from its post-earnings slide but it has continued to slide and is now back in its old trading range.

TXN has had a disappointing post-earnings reaction.

Ditto for AA.

Add IBM to the club.

So there's nothing really terrible in any of those charts. They just tell me that those stocks (and the broader market) got a little ahead of themselves. We're starting to see some cracks in the indices now too. They had been able to mask those slides that individual stocks have had but that changed today. It's most evident in the small caps. Note that the Russell 2000 was not able to take out its September highs like the other indices have done.

The S&P 500 and Nasdaq are now in danger of slipping back under their September highs...

Downgrades to all of the short-term trends today:

The market cruised higher once again today and it's looking even stronger in the after-hours session thanks to earnings from AAPL and TXN. Apple has traded on both sides of its all-time high of 202.96 tonight. I'm a little concerned about it doing a gap & crap tomorrow, like AA and INTC did after their good earnings reports last week. The $200 level should be a battlefield tomorrow and I'll be watching closely for a play long or short off of the action around 200 -- assuming it even gets down to 200. Here's the aforementioned Intel chart, which has pulled back and now looks ready for a push higher.

Here are the index charts.

No changes

It was "all systems go" for the bull case today. Many of the indices powered to new 52-week closing and intraday highs. The Dow also reclaimed the 10,000 level (for about the 10,000th time). There's no stink at all on today's action, volume even increased to (slightly) above average levels. However, it's still early in earnings season and the indices are still extended. It will be important for the good reports to keep rolling in to keep the market afloat.

No changes

This was a pretty quiet day thanks to the bank holiday driven lack of volume. The indices are a little higher than they were at my last recap but my outlook is basically the same. I'm a little more worried about earnings season kicking off though since the indices are right at the September (and multi-month) highs and short-term overbought. That's telling me that the earnings reports had better be stellar or else down we go. We'll have a good idea real soon as earnings start to pour in tomorrow. There is a good amount of economic data due this week as well -- Philly Fed, Retail Sales, FOMC Minutes, CPI... It should be an action packed week, and I didn't even mention options expiration.

No changes

So we're at the point in the quarter, earnings season, at which I don't like to focus on the technicals. The moves over the next three weeks will be primarily driven by the big earnings news of each day. We saw that today with the market getting off to a strong start thanks to Alcoa's (AA) report. Alcoa gapped up to new 52-week+ high but then faded the rest of the session. By the close it had fallen back under its September. While it still gained 1% on the day the intraday action was nothing to write home about. I think action lie this may be common this quarter, especially for stocks which are near 52-week highs.

Some of the leading stocks, like GOOG and AAPL, closed down on the day. That may be a sign that the market's getting a little tired here. The indices showed some indecision today. The S&P 500 was able to break it's pattern of lower-highs by one point before selling took it back down. The Nasdaq fell one point shy of making a higher-high and the Russell 2000 fell about 15 shy. Both the SPY and QQQQ made near-doji patterns which is a sign of an intraday stalemate/indecision. So there are some mixed messages out there. We'll just have to see where earnings takes us.

No changes

Sorry for the late post but I got caught up watching baseball among other things. We got our oversold bounce today. It was helped along by the better than expected GDP and probably by some month-end and year-end mutual fund buying. It was a broad based rally but volume was disappointing relative to yesterday. Still, the market remains oversold and I have to assume the path of least resistance is up (or sideways) in the very short term. We have a Federal Reserve interest rate decision next Wednesday, so that will likely be the focus in the coming days.

Some upgrades today...

It was a bloodbath today, especially in small caps and Nasdaq stocks. Midday I was surprised at how many stocks were popping up on my scanner which were down between 4 and 9%. There was a lot of technical damage done as many stocks and indices broke their 50-day moving averages. (T2108 plunged all the way down to 25 today.) Volume surged across the board and every sector was down on the day. We're also starting to see October lows get broken. The Russell 2000 did just that today and in doing so confirmed its double-top. It's fallen a long way, 9%, in a short amount of time so I wouldn't expect much more downside without at least some sideways movement first.

I won't be surprised to see some snap-back on the Nasdaq too but look out for the 50-day moving average turning to resistance.

On a percentage basis the S&P is twice as far away from its October low as the Nasdaq. So one could argue that it has room to play catch up but I'd be careful trying to chase it here.

Here's part of tonight's Worden report, which sums things up nicely:

Oversold...But

Trading stats have careened to extremely negative levels--indicating, paradoxically, that the market is either short-term oversold or at least very likely within a day of it. I think it's quite normal for a market to bounce off of a significant support level for a short time, while getting ready to take a walloping dive. The market has probably built up hefty oversold pressures, but not enough to win the battle of the October low. Before this skirmish is over, I strongly suspect the October low will have been shattered. But for the immediate period ahead, a lot of shorts could be bludgeoned.

Why do I think we're into oversold territory? To a great extent I'm going by the Dominant PV Relationship, which is a big-time PDVU (price down, volume up), consisting of a whopping 1780 stocks. That smacks of panic selling, and panic-anything seldom pays off.

But I believe the trading stats will carry the battle, and they are very negative. All Eight Important Averages were down today, averaging a jumbo -2.65%. Nothing was down less than one percent.

All 16 Breadth Groupings were Super-Decisively Negative.

More downgrades...

We had another strange day today. Once again the market had wild swings early on but this day was really marked by the relative weakness of the Nasdaq. It was like a tug-o-war all day between the Nasdaq and the Dow. So the Nasdaq lost a bit of its relative strength today by playing catch up (catch down?) with the S&P 500. It was about 1% weaker than the S&P today but both indices broke their March trendlines today. That's not a huge deal though, I'm more concerned with the 50-day moving averages on those indices and the October low on the Russell 2000.

The Russell is now clearly below its 50 DMA so I'm downgrading the intermediate trend again

We had a pretty wild morning today which started off with about 1% gains in the first half hour but a rally in the dollar caused a sharp reversal in stocks. Those gains quickly turned to losses and that was about all she wrote for the day. The S&P 500, Russell 2000 and Dow lost just over 1% today. Even worse, they're starting to show some technical damage. I wrote about how I felt like the indices were masking some deterioration in leading stocks and it looks like that game is coming to an end. The small caps continue to look the worst. The Russell 2000 broke its March trendline on Friday and closed below its 50-day moving average today. To top it off, it's not far from breaking the October low which would confirm a double-top.

The transportation index is also in danger of confirming a double top. Followers of Dow Theory would say that doesn't bode well for the broader market.

The S&P is a couple of days behind the Russell. It's now threatening its March trendline and is one bad day away from its 50-day moving average. It also dropped back under its September highs today, so that 1070 - 1075 zone may have flipped back to resistance from support.

It's no surprise that the Nasdaq is showing the most resilience with the recent impressive moves by the likes of AAPL, AMZN and GOOG. But if the broader market really starts sliding those stocks could see some sharp reversals and take the Nasdaq with it.

The Russell 2000 closed a little bit below its 50-day moving average so I'm setting its intermediate trend to lateral.

So we've had two days of chop since my last update and the indices are basically right where they were at Wednesday's close. Like the indices, my outlook has barely changed. It still seems like the indices are masking underlying weakness in some key stocks. It seems like people just have programs set to buy the broad market whenever it dips to the September highs. The Nasdaq and S&P 500 have been churning just above those support levels for the last week and a half. I can't see them staying in those ranges much longer and I suspect the break will be to the downside.

The short term trends flipped to up on Thursday and back to down on Friday.

We had a pretty good reversal today which made outside days on the S&P 500 and Nasdaq. Both of those indices made marginal new highs intraday and had volume increases today. So that qualifies them for key reversal day status. As usual though, we need to get some follow-through selling for this to be nothing but another blip in the multi-month rally.

As usual, I don't think there was one thing responsible for the selloff this afternoon. I think there was a technical aspect to it thanks to the indices failing to hold the marginal new highs they made around 10:30. I was already leery of that early push to new highs because Goldman Sachs (GS) was showing weakness as well as the 2:00 Beige Book release. We got a little selling when that data hit the wires but things stabilized until an analyst note about Wells Fargo brought out more selling. (Did the GS action telegraph the later WFC analyst note? )

Whatever the reason(s) for the selling, I think there's good reason to get cautious here. I haven't liked the way many stocks, which had good numbers, have reacted to their earnings reports. Goldman, which is regarded as the cream of the crop of banks has been weak ever since its earnings:

The other day I thought Intel (INTC) was set to recover from its post-earnings slide but it has continued to slide and is now back in its old trading range.

TXN has had a disappointing post-earnings reaction.

Ditto for AA.

Add IBM to the club.

So there's nothing really terrible in any of those charts. They just tell me that those stocks (and the broader market) got a little ahead of themselves. We're starting to see some cracks in the indices now too. They had been able to mask those slides that individual stocks have had but that changed today. It's most evident in the small caps. Note that the Russell 2000 was not able to take out its September highs like the other indices have done.

The S&P 500 and Nasdaq are now in danger of slipping back under their September highs...

Downgrades to all of the short-term trends today:

The market cruised higher once again today and it's looking even stronger in the after-hours session thanks to earnings from AAPL and TXN. Apple has traded on both sides of its all-time high of 202.96 tonight. I'm a little concerned about it doing a gap & crap tomorrow, like AA and INTC did after their good earnings reports last week. The $200 level should be a battlefield tomorrow and I'll be watching closely for a play long or short off of the action around 200 -- assuming it even gets down to 200. Here's the aforementioned Intel chart, which has pulled back and now looks ready for a push higher.

Here are the index charts.

No changes

It was "all systems go" for the bull case today. Many of the indices powered to new 52-week closing and intraday highs. The Dow also reclaimed the 10,000 level (for about the 10,000th time). There's no stink at all on today's action, volume even increased to (slightly) above average levels. However, it's still early in earnings season and the indices are still extended. It will be important for the good reports to keep rolling in to keep the market afloat.

No changes

This was a pretty quiet day thanks to the bank holiday driven lack of volume. The indices are a little higher than they were at my last recap but my outlook is basically the same. I'm a little more worried about earnings season kicking off though since the indices are right at the September (and multi-month) highs and short-term overbought. That's telling me that the earnings reports had better be stellar or else down we go. We'll have a good idea real soon as earnings start to pour in tomorrow. There is a good amount of economic data due this week as well -- Philly Fed, Retail Sales, FOMC Minutes, CPI... It should be an action packed week, and I didn't even mention options expiration.

No changes

So we're at the point in the quarter, earnings season, at which I don't like to focus on the technicals. The moves over the next three weeks will be primarily driven by the big earnings news of each day. We saw that today with the market getting off to a strong start thanks to Alcoa's (AA) report. Alcoa gapped up to new 52-week+ high but then faded the rest of the session. By the close it had fallen back under its September. While it still gained 1% on the day the intraday action was nothing to write home about. I think action lie this may be common this quarter, especially for stocks which are near 52-week highs.

Some of the leading stocks, like GOOG and AAPL, closed down on the day. That may be a sign that the market's getting a little tired here. The indices showed some indecision today. The S&P 500 was able to break it's pattern of lower-highs by one point before selling took it back down. The Nasdaq fell one point shy of making a higher-high and the Russell 2000 fell about 15 shy. Both the SPY and QQQQ made near-doji patterns which is a sign of an intraday stalemate/indecision. So there are some mixed messages out there. We'll just have to see where earnings takes us.

No changes

Sorry for the late post but I got caught up watching baseball among other things. We got our oversold bounce today. It was helped along by the better than expected GDP and probably by some month-end and year-end mutual fund buying. It was a broad based rally but volume was disappointing relative to yesterday. Still, the market remains oversold and I have to assume the path of least resistance is up (or sideways) in the very short term. We have a Federal Reserve interest rate decision next Wednesday, so that will likely be the focus in the coming days.

Some upgrades today...

It was a bloodbath today, especially in small caps and Nasdaq stocks. Midday I was surprised at how many stocks were popping up on my scanner which were down between 4 and 9%. There was a lot of technical damage done as many stocks and indices broke their 50-day moving averages. (T2108 plunged all the way down to 25 today.) Volume surged across the board and every sector was down on the day. We're also starting to see October lows get broken. The Russell 2000 did just that today and in doing so confirmed its double-top. It's fallen a long way, 9%, in a short amount of time so I wouldn't expect much more downside without at least some sideways movement first.

I won't be surprised to see some snap-back on the Nasdaq too but look out for the 50-day moving average turning to resistance.

On a percentage basis the S&P is twice as far away from its October low as the Nasdaq. So one could argue that it has room to play catch up but I'd be careful trying to chase it here.

Here's part of tonight's Worden report, which sums things up nicely:

Oversold...But

Trading stats have careened to extremely negative levels--indicating, paradoxically, that the market is either short-term oversold or at least very likely within a day of it. I think it's quite normal for a market to bounce off of a significant support level for a short time, while getting ready to take a walloping dive. The market has probably built up hefty oversold pressures, but not enough to win the battle of the October low. Before this skirmish is over, I strongly suspect the October low will have been shattered. But for the immediate period ahead, a lot of shorts could be bludgeoned.

Why do I think we're into oversold territory? To a great extent I'm going by the Dominant PV Relationship, which is a big-time PDVU (price down, volume up), consisting of a whopping 1780 stocks. That smacks of panic selling, and panic-anything seldom pays off.

But I believe the trading stats will carry the battle, and they are very negative. All Eight Important Averages were down today, averaging a jumbo -2.65%. Nothing was down less than one percent.

All 16 Breadth Groupings were Super-Decisively Negative.

More downgrades...

We had another strange day today. Once again the market had wild swings early on but this day was really marked by the relative weakness of the Nasdaq. It was like a tug-o-war all day between the Nasdaq and the Dow. So the Nasdaq lost a bit of its relative strength today by playing catch up (catch down?) with the S&P 500. It was about 1% weaker than the S&P today but both indices broke their March trendlines today. That's not a huge deal though, I'm more concerned with the 50-day moving averages on those indices and the October low on the Russell 2000.

The Russell is now clearly below its 50 DMA so I'm downgrading the intermediate trend again

We had a pretty wild morning today which started off with about 1% gains in the first half hour but a rally in the dollar caused a sharp reversal in stocks. Those gains quickly turned to losses and that was about all she wrote for the day. The S&P 500, Russell 2000 and Dow lost just over 1% today. Even worse, they're starting to show some technical damage. I wrote about how I felt like the indices were masking some deterioration in leading stocks and it looks like that game is coming to an end. The small caps continue to look the worst. The Russell 2000 broke its March trendline on Friday and closed below its 50-day moving average today. To top it off, it's not far from breaking the October low which would confirm a double-top.

The transportation index is also in danger of confirming a double top. Followers of Dow Theory would say that doesn't bode well for the broader market.

The S&P is a couple of days behind the Russell. It's now threatening its March trendline and is one bad day away from its 50-day moving average. It also dropped back under its September highs today, so that 1070 - 1075 zone may have flipped back to resistance from support.

It's no surprise that the Nasdaq is showing the most resilience with the recent impressive moves by the likes of AAPL, AMZN and GOOG. But if the broader market really starts sliding those stocks could see some sharp reversals and take the Nasdaq with it.

The Russell 2000 closed a little bit below its 50-day moving average so I'm setting its intermediate trend to lateral.

So we've had two days of chop since my last update and the indices are basically right where they were at Wednesday's close. Like the indices, my outlook has barely changed. It still seems like the indices are masking underlying weakness in some key stocks. It seems like people just have programs set to buy the broad market whenever it dips to the September highs. The Nasdaq and S&P 500 have been churning just above those support levels for the last week and a half. I can't see them staying in those ranges much longer and I suspect the break will be to the downside.

The short term trends flipped to up on Thursday and back to down on Friday.

We had a pretty good reversal today which made outside days on the S&P 500 and Nasdaq. Both of those indices made marginal new highs intraday and had volume increases today. So that qualifies them for key reversal day status. As usual though, we need to get some follow-through selling for this to be nothing but another blip in the multi-month rally.

As usual, I don't think there was one thing responsible for the selloff this afternoon. I think there was a technical aspect to it thanks to the indices failing to hold the marginal new highs they made around 10:30. I was already leery of that early push to new highs because Goldman Sachs (GS) was showing weakness as well as the 2:00 Beige Book release. We got a little selling when that data hit the wires but things stabilized until an analyst note about Wells Fargo brought out more selling. (Did the GS action telegraph the later WFC analyst note? )

Whatever the reason(s) for the selling, I think there's good reason to get cautious here. I haven't liked the way many stocks, which had good numbers, have reacted to their earnings reports. Goldman, which is regarded as the cream of the crop of banks has been weak ever since its earnings:

The other day I thought Intel (INTC) was set to recover from its post-earnings slide but it has continued to slide and is now back in its old trading range.

TXN has had a disappointing post-earnings reaction.

Ditto for AA.

Add IBM to the club.

So there's nothing really terrible in any of those charts. They just tell me that those stocks (and the broader market) got a little ahead of themselves. We're starting to see some cracks in the indices now too. They had been able to mask those slides that individual stocks have had but that changed today. It's most evident in the small caps. Note that the Russell 2000 was not able to take out its September highs like the other indices have done.

The S&P 500 and Nasdaq are now in danger of slipping back under their September highs...

Downgrades to all of the short-term trends today:

The market cruised higher once again today and it's looking even stronger in the after-hours session thanks to earnings from AAPL and TXN. Apple has traded on both sides of its all-time high of 202.96 tonight. I'm a little concerned about it doing a gap & crap tomorrow, like AA and INTC did after their good earnings reports last week. The $200 level should be a battlefield tomorrow and I'll be watching closely for a play long or short off of the action around 200 -- assuming it even gets down to 200. Here's the aforementioned Intel chart, which has pulled back and now looks ready for a push higher.

Here are the index charts.

No changes

It was "all systems go" for the bull case today. Many of the indices powered to new 52-week closing and intraday highs. The Dow also reclaimed the 10,000 level (for about the 10,000th time). There's no stink at all on today's action, volume even increased to (slightly) above average levels. However, it's still early in earnings season and the indices are still extended. It will be important for the good reports to keep rolling in to keep the market afloat.

No changes

This was a pretty quiet day thanks to the bank holiday driven lack of volume. The indices are a little higher than they were at my last recap but my outlook is basically the same. I'm a little more worried about earnings season kicking off though since the indices are right at the September (and multi-month) highs and short-term overbought. That's telling me that the earnings reports had better be stellar or else down we go. We'll have a good idea real soon as earnings start to pour in tomorrow. There is a good amount of economic data due this week as well -- Philly Fed, Retail Sales, FOMC Minutes, CPI... It should be an action packed week, and I didn't even mention options expiration.

No changes

So we're at the point in the quarter, earnings season, at which I don't like to focus on the technicals. The moves over the next three weeks will be primarily driven by the big earnings news of each day. We saw that today with the market getting off to a strong start thanks to Alcoa's (AA) report. Alcoa gapped up to new 52-week+ high but then faded the rest of the session. By the close it had fallen back under its September. While it still gained 1% on the day the intraday action was nothing to write home about. I think action lie this may be common this quarter, especially for stocks which are near 52-week highs.

Some of the leading stocks, like GOOG and AAPL, closed down on the day. That may be a sign that the market's getting a little tired here. The indices showed some indecision today. The S&P 500 was able to break it's pattern of lower-highs by one point before selling took it back down. The Nasdaq fell one point shy of making a higher-high and the Russell 2000 fell about 15 shy. Both the SPY and QQQQ made near-doji patterns which is a sign of an intraday stalemate/indecision. So there are some mixed messages out there. We'll just have to see where earnings takes us.

No changes

Sorry for the late post but I got caught up watching baseball among other things. We got our oversold bounce today. It was helped along by the better than expected GDP and probably by some month-end and year-end mutual fund buying. It was a broad based rally but volume was disappointing relative to yesterday. Still, the market remains oversold and I have to assume the path of least resistance is up (or sideways) in the very short term. We have a Federal Reserve interest rate decision next Wednesday, so that will likely be the focus in the coming days.

Some upgrades today...

It was a bloodbath today, especially in small caps and Nasdaq stocks. Midday I was surprised at how many stocks were popping up on my scanner which were down between 4 and 9%. There was a lot of technical damage done as many stocks and indices broke their 50-day moving averages. (T2108 plunged all the way down to 25 today.) Volume surged across the board and every sector was down on the day. We're also starting to see October lows get broken. The Russell 2000 did just that today and in doing so confirmed its double-top. It's fallen a long way, 9%, in a short amount of time so I wouldn't expect much more downside without at least some sideways movement first.

I won't be surprised to see some snap-back on the Nasdaq too but look out for the 50-day moving average turning to resistance.

On a percentage basis the S&P is twice as far away from its October low as the Nasdaq. So one could argue that it has room to play catch up but I'd be careful trying to chase it here.

Here's part of tonight's Worden report, which sums things up nicely:

Oversold...But

Trading stats have careened to extremely negative levels--indicating, paradoxically, that the market is either short-term oversold or at least very likely within a day of it. I think it's quite normal for a market to bounce off of a significant support level for a short time, while getting ready to take a walloping dive. The market has probably built up hefty oversold pressures, but not enough to win the battle of the October low. Before this skirmish is over, I strongly suspect the October low will have been shattered. But for the immediate period ahead, a lot of shorts could be bludgeoned.

Why do I think we're into oversold territory? To a great extent I'm going by the Dominant PV Relationship, which is a big-time PDVU (price down, volume up), consisting of a whopping 1780 stocks. That smacks of panic selling, and panic-anything seldom pays off.

But I believe the trading stats will carry the battle, and they are very negative. All Eight Important Averages were down today, averaging a jumbo -2.65%. Nothing was down less than one percent.

All 16 Breadth Groupings were Super-Decisively Negative.

More downgrades...

We had another strange day today. Once again the market had wild swings early on but this day was really marked by the relative weakness of the Nasdaq. It was like a tug-o-war all day between the Nasdaq and the Dow. So the Nasdaq lost a bit of its relative strength today by playing catch up (catch down?) with the S&P 500. It was about 1% weaker than the S&P today but both indices broke their March trendlines today. That's not a huge deal though, I'm more concerned with the 50-day moving averages on those indices and the October low on the Russell 2000.

The Russell is now clearly below its 50 DMA so I'm downgrading the intermediate trend again

We had a pretty wild morning today which started off with about 1% gains in the first half hour but a rally in the dollar caused a sharp reversal in stocks. Those gains quickly turned to losses and that was about all she wrote for the day. The S&P 500, Russell 2000 and Dow lost just over 1% today. Even worse, they're starting to show some technical damage. I wrote about how I felt like the indices were masking some deterioration in leading stocks and it looks like that game is coming to an end. The small caps continue to look the worst. The Russell 2000 broke its March trendline on Friday and closed below its 50-day moving average today. To top it off, it's not far from breaking the October low which would confirm a double-top.

The transportation index is also in danger of confirming a double top. Followers of Dow Theory would say that doesn't bode well for the broader market.

The S&P is a couple of days behind the Russell. It's now threatening its March trendline and is one bad day away from its 50-day moving average. It also dropped back under its September highs today, so that 1070 - 1075 zone may have flipped back to resistance from support.

It's no surprise that the Nasdaq is showing the most resilience with the recent impressive moves by the likes of AAPL, AMZN and GOOG. But if the broader market really starts sliding those stocks could see some sharp reversals and take the Nasdaq with it.

The Russell 2000 closed a little bit below its 50-day moving average so I'm setting its intermediate trend to lateral.

So we've had two days of chop since my last update and the indices are basically right where they were at Wednesday's close. Like the indices, my outlook has barely changed. It still seems like the indices are masking underlying weakness in some key stocks. It seems like people just have programs set to buy the broad market whenever it dips to the September highs. The Nasdaq and S&P 500 have been churning just above those support levels for the last week and a half. I can't see them staying in those ranges much longer and I suspect the break will be to the downside.

The short term trends flipped to up on Thursday and back to down on Friday.

We had a pretty good reversal today which made outside days on the S&P 500 and Nasdaq. Both of those indices made marginal new highs intraday and had volume increases today. So that qualifies them for key reversal day status. As usual though, we need to get some follow-through selling for this to be nothing but another blip in the multi-month rally.

As usual, I don't think there was one thing responsible for the selloff this afternoon. I think there was a technical aspect to it thanks to the indices failing to hold the marginal new highs they made around 10:30. I was already leery of that early push to new highs because Goldman Sachs (GS) was showing weakness as well as the 2:00 Beige Book release. We got a little selling when that data hit the wires but things stabilized until an analyst note about Wells Fargo brought out more selling. (Did the GS action telegraph the later WFC analyst note? )

Whatever the reason(s) for the selling, I think there's good reason to get cautious here. I haven't liked the way many stocks, which had good numbers, have reacted to their earnings reports. Goldman, which is regarded as the cream of the crop of banks has been weak ever since its earnings:

The other day I thought Intel (INTC) was set to recover from its post-earnings slide but it has continued to slide and is now back in its old trading range.

TXN has had a disappointing post-earnings reaction.

Ditto for AA.

Add IBM to the club.

So there's nothing really terrible in any of those charts. They just tell me that those stocks (and the broader market) got a little ahead of themselves. We're starting to see some cracks in the indices now too. They had been able to mask those slides that individual stocks have had but that changed today. It's most evident in the small caps. Note that the Russell 2000 was not able to take out its September highs like the other indices have done.

The S&P 500 and Nasdaq are now in danger of slipping back under their September highs...

Downgrades to all of the short-term trends today:

The market cruised higher once again today and it's looking even stronger in the after-hours session thanks to earnings from AAPL and TXN. Apple has traded on both sides of its all-time high of 202.96 tonight. I'm a little concerned about it doing a gap & crap tomorrow, like AA and INTC did after their good earnings reports last week. The $200 level should be a battlefield tomorrow and I'll be watching closely for a play long or short off of the action around 200 -- assuming it even gets down to 200. Here's the aforementioned Intel chart, which has pulled back and now looks ready for a push higher.

Here are the index charts.

No changes

It was "all systems go" for the bull case today. Many of the indices powered to new 52-week closing and intraday highs. The Dow also reclaimed the 10,000 level (for about the 10,000th time). There's no stink at all on today's action, volume even increased to (slightly) above average levels. However, it's still early in earnings season and the indices are still extended. It will be important for the good reports to keep rolling in to keep the market afloat.

No changes

This was a pretty quiet day thanks to the bank holiday driven lack of volume. The indices are a little higher than they were at my last recap but my outlook is basically the same. I'm a little more worried about earnings season kicking off though since the indices are right at the September (and multi-month) highs and short-term overbought. That's telling me that the earnings reports had better be stellar or else down we go. We'll have a good idea real soon as earnings start to pour in tomorrow. There is a good amount of economic data due this week as well -- Philly Fed, Retail Sales, FOMC Minutes, CPI... It should be an action packed week, and I didn't even mention options expiration.

No changes

So we're at the point in the quarter, earnings season, at which I don't like to focus on the technicals. The moves over the next three weeks will be primarily driven by the big earnings news of each day. We saw that today with the market getting off to a strong start thanks to Alcoa's (AA) report. Alcoa gapped up to new 52-week+ high but then faded the rest of the session. By the close it had fallen back under its September. While it still gained 1% on the day the intraday action was nothing to write home about. I think action lie this may be common this quarter, especially for stocks which are near 52-week highs.

Some of the leading stocks, like GOOG and AAPL, closed down on the day. That may be a sign that the market's getting a little tired here. The indices showed some indecision today. The S&P 500 was able to break it's pattern of lower-highs by one point before selling took it back down. The Nasdaq fell one point shy of making a higher-high and the Russell 2000 fell about 15 shy. Both the SPY and QQQQ made near-doji patterns which is a sign of an intraday stalemate/indecision. So there are some mixed messages out there. We'll just have to see where earnings takes us.

No changes

Sorry for the late post but I got caught up watching baseball among other things. We got our oversold bounce today. It was helped along by the better than expected GDP and probably by some month-end and year-end mutual fund buying. It was a broad based rally but volume was disappointing relative to yesterday. Still, the market remains oversold and I have to assume the path of least resistance is up (or sideways) in the very short term. We have a Federal Reserve interest rate decision next Wednesday, so that will likely be the focus in the coming days.

Some upgrades today...

It was a bloodbath today, especially in small caps and Nasdaq stocks. Midday I was surprised at how many stocks were popping up on my scanner which were down between 4 and 9%. There was a lot of technical damage done as many stocks and indices broke their 50-day moving averages. (T2108 plunged all the way down to 25 today.) Volume surged across the board and every sector was down on the day. We're also starting to see October lows get broken. The Russell 2000 did just that today and in doing so confirmed its double-top. It's fallen a long way, 9%, in a short amount of time so I wouldn't expect much more downside without at least some sideways movement first.

I won't be surprised to see some snap-back on the Nasdaq too but look out for the 50-day moving average turning to resistance.

On a percentage basis the S&P is twice as far away from its October low as the Nasdaq. So one could argue that it has room to play catch up but I'd be careful trying to chase it here.

Here's part of tonight's Worden report, which sums things up nicely:

Oversold...But

Trading stats have careened to extremely negative levels--indicating, paradoxically, that the market is either short-term oversold or at least very likely within a day of it. I think it's quite normal for a market to bounce off of a significant support level for a short time, while getting ready to take a walloping dive. The market has probably built up hefty oversold pressures, but not enough to win the battle of the October low. Before this skirmish is over, I strongly suspect the October low will have been shattered. But for the immediate period ahead, a lot of shorts could be bludgeoned.

Why do I think we're into oversold territory? To a great extent I'm going by the Dominant PV Relationship, which is a big-time PDVU (price down, volume up), consisting of a whopping 1780 stocks. That smacks of panic selling, and panic-anything seldom pays off.

But I believe the trading stats will carry the battle, and they are very negative. All Eight Important Averages were down today, averaging a jumbo -2.65%. Nothing was down less than one percent.

All 16 Breadth Groupings were Super-Decisively Negative.

More downgrades...

We had another strange day today. Once again the market had wild swings early on but this day was really marked by the relative weakness of the Nasdaq. It was like a tug-o-war all day between the Nasdaq and the Dow. So the Nasdaq lost a bit of its relative strength today by playing catch up (catch down?) with the S&P 500. It was about 1% weaker than the S&P today but both indices broke their March trendlines today. That's not a huge deal though, I'm more concerned with the 50-day moving averages on those indices and the October low on the Russell 2000.

The Russell is now clearly below its 50 DMA so I'm downgrading the intermediate trend again

We had a pretty wild morning today which started off with about 1% gains in the first half hour but a rally in the dollar caused a sharp reversal in stocks. Those gains quickly turned to losses and that was about all she wrote for the day. The S&P 500, Russell 2000 and Dow lost just over 1% today. Even worse, they're starting to show some technical damage. I wrote about how I felt like the indices were masking some deterioration in leading stocks and it looks like that game is coming to an end. The small caps continue to look the worst. The Russell 2000 broke its March trendline on Friday and closed below its 50-day moving average today. To top it off, it's not far from breaking the October low which would confirm a double-top.

The transportation index is also in danger of confirming a double top. Followers of Dow Theory would say that doesn't bode well for the broader market.

The S&P is a couple of days behind the Russell. It's now threatening its March trendline and is one bad day away from its 50-day moving average. It also dropped back under its September highs today, so that 1070 - 1075 zone may have flipped back to resistance from support.

It's no surprise that the Nasdaq is showing the most resilience with the recent impressive moves by the likes of AAPL, AMZN and GOOG. But if the broader market really starts sliding those stocks could see some sharp reversals and take the Nasdaq with it.

The Russell 2000 closed a little bit below its 50-day moving average so I'm setting its intermediate trend to lateral.

So we've had two days of chop since my last update and the indices are basically right where they were at Wednesday's close. Like the indices, my outlook has barely changed. It still seems like the indices are masking underlying weakness in some key stocks. It seems like people just have programs set to buy the broad market whenever it dips to the September highs. The Nasdaq and S&P 500 have been churning just above those support levels for the last week and a half. I can't see them staying in those ranges much longer and I suspect the break will be to the downside.

The short term trends flipped to up on Thursday and back to down on Friday.

We had a pretty good reversal today which made outside days on the S&P 500 and Nasdaq. Both of those indices made marginal new highs intraday and had volume increases today. So that qualifies them for key reversal day status. As usual though, we need to get some follow-through selling for this to be nothing but another blip in the multi-month rally.

As usual, I don't think there was one thing responsible for the selloff this afternoon. I think there was a technical aspect to it thanks to the indices failing to hold the marginal new highs they made around 10:30. I was already leery of that early push to new highs because Goldman Sachs (GS) was showing weakness as well as the 2:00 Beige Book release. We got a little selling when that data hit the wires but things stabilized until an analyst note about Wells Fargo brought out more selling. (Did the GS action telegraph the later WFC analyst note? )

Whatever the reason(s) for the selling, I think there's good reason to get cautious here. I haven't liked the way many stocks, which had good numbers, have reacted to their earnings reports. Goldman, which is regarded as the cream of the crop of banks has been weak ever since its earnings:

The other day I thought Intel (INTC) was set to recover from its post-earnings slide but it has continued to slide and is now back in its old trading range.

TXN has had a disappointing post-earnings reaction.

Ditto for AA.

Add IBM to the club.

So there's nothing really terrible in any of those charts. They just tell me that those stocks (and the broader market) got a little ahead of themselves. We're starting to see some cracks in the indices now too. They had been able to mask those slides that individual stocks have had but that changed today. It's most evident in the small caps. Note that the Russell 2000 was not able to take out its September highs like the other indices have done.

The S&P 500 and Nasdaq are now in danger of slipping back under their September highs...

Downgrades to all of the short-term trends today:

The market cruised higher once again today and it's looking even stronger in the after-hours session thanks to earnings from AAPL and TXN. Apple has traded on both sides of its all-time high of 202.96 tonight. I'm a little concerned about it doing a gap & crap tomorrow, like AA and INTC did after their good earnings reports last week. The $200 level should be a battlefield tomorrow and I'll be watching closely for a play long or short off of the action around 200 -- assuming it even gets down to 200. Here's the aforementioned Intel chart, which has pulled back and now looks ready for a push higher.

Here are the index charts.

No changes

It was "all systems go" for the bull case today. Many of the indices powered to new 52-week closing and intraday highs. The Dow also reclaimed the 10,000 level (for about the 10,000th time). There's no stink at all on today's action, volume even increased to (slightly) above average levels. However, it's still early in earnings season and the indices are still extended. It will be important for the good reports to keep rolling in to keep the market afloat.

No changes

This was a pretty quiet day thanks to the bank holiday driven lack of volume. The indices are a little higher than they were at my last recap but my outlook is basically the same. I'm a little more worried about earnings season kicking off though since the indices are right at the September (and multi-month) highs and short-term overbought. That's telling me that the earnings reports had better be stellar or else down we go. We'll have a good idea real soon as earnings start to pour in tomorrow. There is a good amount of economic data due this week as well -- Philly Fed, Retail Sales, FOMC Minutes, CPI... It should be an action packed week, and I didn't even mention options expiration.

No changes

So we're at the point in the quarter, earnings season, at which I don't like to focus on the technicals. The moves over the next three weeks will be primarily driven by the big earnings news of each day. We saw that today with the market getting off to a strong start thanks to Alcoa's (AA) report. Alcoa gapped up to new 52-week+ high but then faded the rest of the session. By the close it had fallen back under its September. While it still gained 1% on the day the intraday action was nothing to write home about. I think action lie this may be common this quarter, especially for stocks which are near 52-week highs.

Some of the leading stocks, like GOOG and AAPL, closed down on the day. That may be a sign that the market's getting a little tired here. The indices showed some indecision today. The S&P 500 was able to break it's pattern of lower-highs by one point before selling took it back down. The Nasdaq fell one point shy of making a higher-high and the Russell 2000 fell about 15 shy. Both the SPY and QQQQ made near-doji patterns which is a sign of an intraday stalemate/indecision. So there are some mixed messages out there. We'll just have to see where earnings takes us.

No changes

Sorry for the late post but I got caught up watching baseball among other things. We got our oversold bounce today. It was helped along by the better than expected GDP and probably by some month-end and year-end mutual fund buying. It was a broad based rally but volume was disappointing relative to yesterday. Still, the market remains oversold and I have to assume the path of least resistance is up (or sideways) in the very short term. We have a Federal Reserve interest rate decision next Wednesday, so that will likely be the focus in the coming days.

Some upgrades today...

It was a bloodbath today, especially in small caps and Nasdaq stocks. Midday I was surprised at how many stocks were popping up on my scanner which were down between 4 and 9%. There was a lot of technical damage done as many stocks and indices broke their 50-day moving averages. (T2108 plunged all the way down to 25 today.) Volume surged across the board and every sector was down on the day. We're also starting to see October lows get broken. The Russell 2000 did just that today and in doing so confirmed its double-top. It's fallen a long way, 9%, in a short amount of time so I wouldn't expect much more downside without at least some sideways movement first.

I won't be surprised to see some snap-back on the Nasdaq too but look out for the 50-day moving average turning to resistance.

On a percentage basis the S&P is twice as far away from its October low as the Nasdaq. So one could argue that it has room to play catch up but I'd be careful trying to chase it here.

Here's part of tonight's Worden report, which sums things up nicely:

Oversold...But

Trading stats have careened to extremely negative levels--indicating, paradoxically, that the market is either short-term oversold or at least very likely within a day of it. I think it's quite normal for a market to bounce off of a significant support level for a short time, while getting ready to take a walloping dive. The market has probably built up hefty oversold pressures, but not enough to win the battle of the October low. Before this skirmish is over, I strongly suspect the October low will have been shattered. But for the immediate period ahead, a lot of shorts could be bludgeoned.

Why do I think we're into oversold territory? To a great extent I'm going by the Dominant PV Relationship, which is a big-time PDVU (price down, volume up), consisting of a whopping 1780 stocks. That smacks of panic selling, and panic-anything seldom pays off.

But I believe the trading stats will carry the battle, and they are very negative. All Eight Important Averages were down today, averaging a jumbo -2.65%. Nothing was down less than one percent.

All 16 Breadth Groupings were Super-Decisively Negative.

More downgrades...

We had another strange day today. Once again the market had wild swings early on but this day was really marked by the relative weakness of the Nasdaq. It was like a tug-o-war all day between the Nasdaq and the Dow. So the Nasdaq lost a bit of its relative strength today by playing catch up (catch down?) with the S&P 500. It was about 1% weaker than the S&P today but both indices broke their March trendlines today. That's not a huge deal though, I'm more concerned with the 50-day moving averages on those indices and the October low on the Russell 2000.

The Russell is now clearly below its 50 DMA so I'm downgrading the intermediate trend again

We had a pretty wild morning today which started off with about 1% gains in the first half hour but a rally in the dollar caused a sharp reversal in stocks. Those gains quickly turned to losses and that was about all she wrote for the day. The S&P 500, Russell 2000 and Dow lost just over 1% today. Even worse, they're starting to show some technical damage. I wrote about how I felt like the indices were masking some deterioration in leading stocks and it looks like that game is coming to an end. The small caps continue to look the worst. The Russell 2000 broke its March trendline on Friday and closed below its 50-day moving average today. To top it off, it's not far from breaking the October low which would confirm a double-top.

The transportation index is also in danger of confirming a double top. Followers of Dow Theory would say that doesn't bode well for the broader market.

The S&P is a couple of days behind the Russell. It's now threatening its March trendline and is one bad day away from its 50-day moving average. It also dropped back under its September highs today, so that 1070 - 1075 zone may have flipped back to resistance from support.

It's no surprise that the Nasdaq is showing the most resilience with the recent impressive moves by the likes of AAPL, AMZN and GOOG. But if the broader market really starts sliding those stocks could see some sharp reversals and take the Nasdaq with it.

The Russell 2000 closed a little bit below its 50-day moving average so I'm setting its intermediate trend to lateral.

So we've had two days of chop since my last update and the indices are basically right where they were at Wednesday's close. Like the indices, my outlook has barely changed. It still seems like the indices are masking underlying weakness in some key stocks. It seems like people just have programs set to buy the broad market whenever it dips to the September highs. The Nasdaq and S&P 500 have been churning just above those support levels for the last week and a half. I can't see them staying in those ranges much longer and I suspect the break will be to the downside.

The short term trends flipped to up on Thursday and back to down on Friday.

We had a pretty good reversal today which made outside days on the S&P 500 and Nasdaq. Both of those indices made marginal new highs intraday and had volume increases today. So that qualifies them for key reversal day status. As usual though, we need to get some follow-through selling for this to be nothing but another blip in the multi-month rally.

As usual, I don't think there was one thing responsible for the selloff this afternoon. I think there was a technical aspect to it thanks to the indices failing to hold the marginal new highs they made around 10:30. I was already leery of that early push to new highs because Goldman Sachs (GS) was showing weakness as well as the 2:00 Beige Book release. We got a little selling when that data hit the wires but things stabilized until an analyst note about Wells Fargo brought out more selling. (Did the GS action telegraph the later WFC analyst note? )

Whatever the reason(s) for the selling, I think there's good reason to get cautious here. I haven't liked the way many stocks, which had good numbers, have reacted to their earnings reports. Goldman, which is regarded as the cream of the crop of banks has been weak ever since its earnings:

The other day I thought Intel (INTC) was set to recover from its post-earnings slide but it has continued to slide and is now back in its old trading range.

TXN has had a disappointing post-earnings reaction.

Ditto for AA.

Add IBM to the club.

So there's nothing really terrible in any of those charts. They just tell me that those stocks (and the broader market) got a little ahead of themselves. We're starting to see some cracks in the indices now too. They had been able to mask those slides that individual stocks have had but that changed today. It's most evident in the small caps. Note that the Russell 2000 was not able to take out its September highs like the other indices have done.

The S&P 500 and Nasdaq are now in danger of slipping back under their September highs...

Downgrades to all of the short-term trends today:

The market cruised higher once again today and it's looking even stronger in the after-hours session thanks to earnings from AAPL and TXN. Apple has traded on both sides of its all-time high of 202.96 tonight. I'm a little concerned about it doing a gap & crap tomorrow, like AA and INTC did after their good earnings reports last week. The $200 level should be a battlefield tomorrow and I'll be watching closely for a play long or short off of the action around 200 -- assuming it even gets down to 200. Here's the aforementioned Intel chart, which has pulled back and now looks ready for a push higher.

Here are the index charts.

No changes

It was "all systems go" for the bull case today. Many of the indices powered to new 52-week closing and intraday highs. The Dow also reclaimed the 10,000 level (for about the 10,000th time). There's no stink at all on today's action, volume even increased to (slightly) above average levels. However, it's still early in earnings season and the indices are still extended. It will be important for the good reports to keep rolling in to keep the market afloat.

No changes

This was a pretty quiet day thanks to the bank holiday driven lack of volume. The indices are a little higher than they were at my last recap but my outlook is basically the same. I'm a little more worried about earnings season kicking off though since the indices are right at the September (and multi-month) highs and short-term overbought. That's telling me that the earnings reports had better be stellar or else down we go. We'll have a good idea real soon as earnings start to pour in tomorrow. There is a good amount of economic data due this week as well -- Philly Fed, Retail Sales, FOMC Minutes, CPI... It should be an action packed week, and I didn't even mention options expiration.

No changes

So we're at the point in the quarter, earnings season, at which I don't like to focus on the technicals. The moves over the next three weeks will be primarily driven by the big earnings news of each day. We saw that today with the market getting off to a strong start thanks to Alcoa's (AA) report. Alcoa gapped up to new 52-week+ high but then faded the rest of the session. By the close it had fallen back under its September. While it still gained 1% on the day the intraday action was nothing to write home about. I think action lie this may be common this quarter, especially for stocks which are near 52-week highs.

Some of the leading stocks, like GOOG and AAPL, closed down on the day. That may be a sign that the market's getting a little tired here. The indices showed some indecision today. The S&P 500 was able to break it's pattern of lower-highs by one point before selling took it back down. The Nasdaq fell one point shy of making a higher-high and the Russell 2000 fell about 15 shy. Both the SPY and QQQQ made near-doji patterns which is a sign of an intraday stalemate/indecision. So there are some mixed messages out there. We'll just have to see where earnings takes us.

No changes

Sorry for the late post but I got caught up watching baseball among other things. We got our oversold bounce today. It was helped along by the better than expected GDP and probably by some month-end and year-end mutual fund buying. It was a broad based rally but volume was disappointing relative to yesterday. Still, the market remains oversold and I have to assume the path of least resistance is up (or sideways) in the very short term. We have a Federal Reserve interest rate decision next Wednesday, so that will likely be the focus in the coming days.

Some upgrades today...

It was a bloodbath today, especially in small caps and Nasdaq stocks. Midday I was surprised at how many stocks were popping up on my scanner which were down between 4 and 9%. There was a lot of technical damage done as many stocks and indices broke their 50-day moving averages. (T2108 plunged all the way down to 25 today.) Volume surged across the board and every sector was down on the day. We're also starting to see October lows get broken. The Russell 2000 did just that today and in doing so confirmed its double-top. It's fallen a long way, 9%, in a short amount of time so I wouldn't expect much more downside without at least some sideways movement first.

I won't be surprised to see some snap-back on the Nasdaq too but look out for the 50-day moving average turning to resistance.

On a percentage basis the S&P is twice as far away from its October low as the Nasdaq. So one could argue that it has room to play catch up but I'd be careful trying to chase it here.

Here's part of tonight's Worden report, which sums things up nicely:

Oversold...But

Trading stats have careened to extremely negative levels--indicating, paradoxically, that the market is either short-term oversold or at least very likely within a day of it. I think it's quite normal for a market to bounce off of a significant support level for a short time, while getting ready to take a walloping dive. The market has probably built up hefty oversold pressures, but not enough to win the battle of the October low. Before this skirmish is over, I strongly suspect the October low will have been shattered. But for the immediate period ahead, a lot of shorts could be bludgeoned.

Why do I think we're into oversold territory? To a great extent I'm going by the Dominant PV Relationship, which is a big-time PDVU (price down, volume up), consisting of a whopping 1780 stocks. That smacks of panic selling, and panic-anything seldom pays off.

But I believe the trading stats will carry the battle, and they are very negative. All Eight Important Averages were down today, averaging a jumbo -2.65%. Nothing was down less than one percent.

All 16 Breadth Groupings were Super-Decisively Negative.

More downgrades...

We had another strange day today. Once again the market had wild swings early on but this day was really marked by the relative weakness of the Nasdaq. It was like a tug-o-war all day between the Nasdaq and the Dow. So the Nasdaq lost a bit of its relative strength today by playing catch up (catch down?) with the S&P 500. It was about 1% weaker than the S&P today but both indices broke their March trendlines today. That's not a huge deal though, I'm more concerned with the 50-day moving averages on those indices and the October low on the Russell 2000.

The Russell is now clearly below its 50 DMA so I'm downgrading the intermediate trend again

We had a pretty wild morning today which started off with about 1% gains in the first half hour but a rally in the dollar caused a sharp reversal in stocks. Those gains quickly turned to losses and that was about all she wrote for the day. The S&P 500, Russell 2000 and Dow lost just over 1% today. Even worse, they're starting to show some technical damage. I wrote about how I felt like the indices were masking some deterioration in leading stocks and it looks like that game is coming to an end. The small caps continue to look the worst. The Russell 2000 broke its March trendline on Friday and closed below its 50-day moving average today. To top it off, it's not far from breaking the October low which would confirm a double-top.

The transportation index is also in danger of confirming a double top. Followers of Dow Theory would say that doesn't bode well for the broader market.

The S&P is a couple of days behind the Russell. It's now threatening its March trendline and is one bad day away from its 50-day moving average. It also dropped back under its September highs today, so that 1070 - 1075 zone may have flipped back to resistance from support.

It's no surprise that the Nasdaq is showing the most resilience with the recent impressive moves by the likes of AAPL, AMZN and GOOG. But if the broader market really starts sliding those stocks could see some sharp reversals and take the Nasdaq with it.

The Russell 2000 closed a little bit below its 50-day moving average so I'm setting its intermediate trend to lateral.

So we've had two days of chop since my last update and the indices are basically right where they were at Wednesday's close. Like the indices, my outlook has barely changed. It still seems like the indices are masking underlying weakness in some key stocks. It seems like people just have programs set to buy the broad market whenever it dips to the September highs. The Nasdaq and S&P 500 have been churning just above those support levels for the last week and a half. I can't see them staying in those ranges much longer and I suspect the break will be to the downside.

The short term trends flipped to up on Thursday and back to down on Friday.

We had a pretty good reversal today which made outside days on the S&P 500 and Nasdaq. Both of those indices made marginal new highs intraday and had volume increases today. So that qualifies them for key reversal day status. As usual though, we need to get some follow-through selling for this to be nothing but another blip in the multi-month rally.

As usual, I don't think there was one thing responsible for the selloff this afternoon. I think there was a technical aspect to it thanks to the indices failing to hold the marginal new highs they made around 10:30. I was already leery of that early push to new highs because Goldman Sachs (GS) was showing weakness as well as the 2:00 Beige Book release. We got a little selling when that data hit the wires but things stabilized until an analyst note about Wells Fargo brought out more selling. (Did the GS action telegraph the later WFC analyst note? )

Whatever the reason(s) for the selling, I think there's good reason to get cautious here. I haven't liked the way many stocks, which had good numbers, have reacted to their earnings reports. Goldman, which is regarded as the cream of the crop of banks has been weak ever since its earnings:

The other day I thought Intel (INTC) was set to recover from its post-earnings slide but it has continued to slide and is now back in its old trading range.

TXN has had a disappointing post-earnings reaction.

Ditto for AA.

Add IBM to the club.

So there's nothing really terrible in any of those charts. They just tell me that those stocks (and the broader market) got a little ahead of themselves. We're starting to see some cracks in the indices now too. They had been able to mask those slides that individual stocks have had but that changed today. It's most evident in the small caps. Note that the Russell 2000 was not able to take out its September highs like the other indices have done.

The S&P 500 and Nasdaq are now in danger of slipping back under their September highs...

Downgrades to all of the short-term trends today:

The market cruised higher once again today and it's looking even stronger in the after-hours session thanks to earnings from AAPL and TXN. Apple has traded on both sides of its all-time high of 202.96 tonight. I'm a little concerned about it doing a gap & crap tomorrow, like AA and INTC did after their good earnings reports last week. The $200 level should be a battlefield tomorrow and I'll be watching closely for a play long or short off of the action around 200 -- assuming it even gets down to 200. Here's the aforementioned Intel chart, which has pulled back and now looks ready for a push higher.

Here are the index charts.

No changes