Trader Mike

I think we can call today the calm after the storm. There were a ton of NR7s made today and volume on the Nasdaq and S&P 500 was the lowest in 7 sessions. The bulls gave it a good try by pushing the indices into the green mid-day but a last hour selloff closed the indices in the red. So I’ll just call this a consolidation day and my view hasn’t changed from what I said yesterday.

The S&P 500 got above 1400 and close to the resistance I’ve been drawing but closed back within yesterday’s range. Note that it’s no longer oversold on my stochastic setting.

Here’s the Nasdaq chart, showing an inside day today:

Here’s CME for Matt:

It looks to me like somebody (or a few somebodies) got caught short the $400 twins (CME and GOOG) yesterday. Both of them have been tracing similar, choppy channels with a slight upside bias since mid-May. They both popped out of those channels yesterday.

I like that CME is now back above its 50-day moving average and that the move came on strong volume. My only concern is the general market dragging it back down. If it does fall back I wouldn’t want to see more than 2/3 of Wednesday’s lost. More than that and I think you’d have to call this move a false breakout.

charts of The Nasdaq, Chicago Mercantile Exchange (CME), Consumer Discretionary Select Sector SPDR (XLY), Alcan (AL), and the S&P 500 Percent of Stocks Above 50 Day Moving Average:

I remember hearing about the stock of the Nasdaq exchange trading on the pink sheets a while back. Well they quietly listed the stock, NDAQ, on the NASDAQ National Market last week. Here’s a note on it from Briefing.com: