The best performing index was the
Russell 2000 as it enjoyed a major bullish piercing pattern with its 3% gain on the day. However, it failed to challenge its 50-day and 200-day MAs. It also rallied without oversold stochatics.
Nasdaq breadth indicators [$NASI, $NAA50R and $BPCOMPQ] worked their way lower. The Percentage of Stocks above the 50-day MA ($NAA50R) is very close to oversold conditions, but Bullish Percents ($BPCOMPQ) and Summation Index ($NASI) still have a long way to go; buyer beware.
Target hit: None
Stop hit: WH hit its stop on low volume. The August 27th free pick closed for a 13% loss. HMC clipped its stop but finished above support for a 4% loss. WMG fell inside its consolidation and consequently hit its stop. The September 9th pick closed for a 10% loss.
September 15th: A swathe of negative news turned Monday into a tornado of selling. The news may have been bleak but the selling action wasn't too bad from a technical perspective. Worst hit was the
S&P followed closely by the
Dow and Russell 2000. The S&P posted a new closing and absolute low but technicals only saw modest declines. Indeed, on-balance-volume has maintained an accumulation trend since the July low and may yet continue to do so. The Russell 2000 lost the last of its support at the declining channel line. Technicals weakened but bullish divergences are likely to develop soon. Unfortunately, July lows in the 645-660 range are its next best bet. The Dow didn't break past absolute lows but did break July closing lows. Again, watch for bullish divergences in the technicals and a continuation of the accumulation trend for on-balance-volume.
NASDAQ closed on an inverse hammer. Volume was higher but without the financials of other indices was hardly excessive. More importantly, the inverse hammer is typically bullish and is positioned for a double bottom assuming no further losses.
The NASDAQ 100 is on course to reach its measured move target of 1,672. Like the NASDAQ it finished with an inverse bullish hammer but there is no logical support nearby to lean on. The semiconductor index gave away another 3% in line with losses in other indices but the end must be near for an index which has collapsed from 549 in 2007 to 311 in 2008; 2002 lows at 209 are next but given the relative loss to the other indices it would be a major disappointment for bulls if it dropped this far. Volatility closed above the critical 30 level for a bottom. Tomorrow may see a gap higher but don't be surprised if this gap gives way to drip losses (and a corresponding rally in the markets). The bottom is near.
The real sticking point for the bottom is not the position of the indices but the relatively neutral positioning of
Nasdaq breadth indicators [$NASI, $NAA50R and $BPCOMPQ]. For example, the Summation Index ($NASI) barely budged at -372 and could lose another 800 points before a true bottom is in place. My outlook for the $NASI is for a drop of 300 to 500 points - this could take a month to complete and will be matched with a corresponding correction in the NASDAQ.
Target hit: None
Stop hit: ICUI was a free pick for September 10th and was stopped out for a 7% loss. WW was a Subscriber pick for a February 8th and stopped out for a 7% loss.
September 13th: Not a bad finish to the week where the concern would have been a reversal of Thursday's gains. There was mixed volume to the trading day, the Dow registered a distribution day, but other indices traded lightly - fitting with a consolidation. The
semiconductor index posted a second bullish hammer in a row - further sign of a bottom for the index. This will help the
NASDAQ and NASDAQ 100 gain a footing. The
Russell 2000 hasn't eliminated the possibility of a handle. The
S&P traded relatively quietly, especially when compared to the
Nasdaq breadth indicators [$NASI, $NAA50R and $BPCOMPQ] fell, but the losses were drip rather than precipitous. Technicals of the Percentage of Stocks above the 50-day MA ($NAA50R) and Bullish Percents ($BPCOMPQ) are bearish. Based on these indicators the favored outcome is for more declines in the
NASDAQ and NASDAQ 100.
Because of this I keep with my bearish call in the Ticker Sense Blogger Sentiment Poll 30-day S&P outlook.
Target hit: None
Stop hit: None
September 11th: Bulls enjoyed their best day since the July bottom (ignoring the Frannie day). It was interesting as the markets opened lower but gained strength throughout the day - a true sign of demand. There is no shortage of supply above, but this is the best indication of some sort of floor in the market. The NASDAQ and NASDAQ 100 each finished with bullish engulfing patterns. The semiconductor index ended with a low key hammer which may yet prove to be a potent marker for a bottom. The Dow and S&P had forms of bullish piercing patterns; the
Dow finishing at the 50-day MA. The
Russell 2000 had a bullish hammer which held channel/handle support and closed above both 50-day and 200-day MAs. There was no major change in supporting technicals of these indices.
Nasdaq breadth indicators [$NASI, $NAA50R and $BPCOMPQ] are at best in neutral territory for a bear market but have room for upside should a rally develop here. The worry is a strong bottom won't emerge without the indicators at oversold levels typical of previous bottoms - but there is a first time for everything.
Target hit: None
Stop hit: ACC clipped its stop on the lows of the day. The 18th April free pick closed for a 3% gain. The later September 9th went for a 5% loss. SAPE dropped to its stop after a false handle breakout.
September 10th: The day finished quietly after yesterday's selling. There are cases for bullish harami crosses in the NASDAQ and NASDAQ 100. Of the bullish candlestick reversal patterns the harami cross is one of the most powerful and this should represent with higher closes for these indices on Thursday. The semiconductor index finished on an harami and like the aforementioned indices is well positioned for a challenge on 335 resistance. The Russell 2000 was a little more mixed as minor gains were tempered by the close just below its 200-day MA. Large caps (Dow and S&P) finished at the low end of their range, but held above yesterday's lows which is bullish.
No updates on Nasdaq breadth indicators [$NASI, $NAA50R and $BPCOMPQ] to report, but not likely to suggest anything new.
Target hit: None
Stop hit: SDXC broke support and its stop to close the September 2nd for a 7% loss.
September 9th: The lack of real punch to yesterday's buying came back to haunt the market. The unfortunate thing is market volatility is nowhere near the fearful capitulation common at a bottom. Financials may have taken the limelight but it was the tech averages (NASDAQ and NASDAQ 100) which endured the brunt of the selling. The bastion of the bulls, the Russell 2000, is starting to struggle as the horizontal handle shaped by support at the 200-day MA is no more as is the loss of the 50-day MA. The best it can hope for is a bull flag, but the volume pattern does not conform to such a pattern. The semiconductor index dragged the NASDAQ and NASDAQ 100 down as is this long suffering index struggles to find a bottom which would stem the long term outflows from this index; its drop took it further away from 335 support. The NASDAQ and NASDAQ 100 are effectively looking for support at March lows so even a short term bounce would likely result in a drop down to these levels. There is an interesting divergence between the NASDAQ and NASDAQ 100 as the NASDAQ 100 has currently lost July lows, while the NASDAQ has not. The expectation would be a loss of July lows for the NASDAQ. Large caps (Dow and S&P) have a little more to look forward with July lows nearby for both indices and it may yet find a bottom here before having to look further a field.
The other aspect which is worrying for bulls is the relatively overbought levels of breadth indicators
[$NASI, $NAA50R and $BPCOMPQ]. The Summation Index ($NASI) is at least 700 points away from oversold levels. The Bullish Percents ($BPCOMPQ) could shed an additional 30 points before reaching a bottom. The Percentage of Stocks Above the 50-day MA ($NAA50R) is still near the 50th percentile, not the 10-20% range of a bottom. Similarly, supporting technicals of these breadth indicators are a long way from oversold.
Buckle the belts. Long term buyers have plenty of choice if exposure is built in over time. Short and Intermediate term buyers are best to wait for better conditions from breadth indicators before going long.
Target hit: None
Stop hit: CHP was a Subscriber pick for June 9th and its 24% loss today was enough to reach the original stop for a 16% loss.
September 8th: The small matter of a certain bailout dominated the news and this injection of volatility put an unusual spin on the market. But in the cold light of day it wasn't all glossy. The markets finished higher but it was not a slam dunk for bulls. Worryingly, tech indices (NASDAQ and NASDAQ 100) failed to build on their morning breakout gaps and the NASDAQ 100 ended down on Friday's close. The black candlestick in the
NASDAQ is a bearish pattern, particularly as the index was unable to overturn Thursday's selling. The semiconductor index couldn't regain 335 support in what was a very subdued day for the index. The
Dow finished with a bullish morning star and regained the 50-day MA. Of all the indices it enjoyed the best gains. The S&P enjoyed low volume gains (in contrast to the volume in the tech averages), but it failed to climb above the 50-day MA in what was a tepid match to strength in the Dow. The
Russell 2000 had a middling day; it held above the 50-day and 200-day MAs but couldn't quite make it above the 20-day MA. However, the cup-and-handle pattern is still on course which says a lot given the selling which has gone before.
Nasdaq breadth indicators [$NASI, $NAA50R and $BPCOMPQ] hadn't updated at time of writing but it will be interesting to see if they expand on last week's weakness.
Target hit: None
Stop hit: The August 20th Subscriber pick, UNT crashed through its 200-day MA and hit its stop for a 5% loss.
September 6th: The brakes were hit on the decline but how much upside can come out of this is uncertain. Worryingly, when the buying kicked in it didn't attract the volume of previous days selling - so no accumulation day for any market. Bullish hammers in the NASDAQ and NASDAQ 100 were offset by the breakdown gaps from the open. Best index on the day was the semiconductor index but it failed to regain the July support it lost on Thursday. The Dow closed with a traditional bullish hammer and it may support a move to the 50-day MA - but could struggle to go further. The
Russell 2000 also closed with a broad bullish hammer which cut through both 50-day and 200-day MAs before recovering. The index still holds to August reaction lows and the cup-and-handle pattern is still viable. There was a net bearish turn of technicals for the
S&P as the index opened at a July reaction low. Like the Dow it finished with a bullish hammer on a higher close.
Nasdaq breadth indicators [$NASI, $NAA50R and $BPCOMPQ] are all negative with 3-day EMAs below 5-day EMAs. Supporting technicals all turned negative for the Percentage of Stocks above the 50-day MA ($NAA50R), but other breadth indicators maintained their bullish technicals. I have switched to a bearish stance for the Ticker Sense Blogger Sentiment Poll 30-day S&P outlook.
Target hit: None
Stop hit: KNSY hit its raised stop and reversed the recent breakout. The August 25th free pick closed for a 7% loss. The March 10th pick closed for a 27% gain. WMGI dropped into its stop after a sideways move. CRR clipped its stop at the intraday lows; the June 4th play closed flat, but the August 18th pick closed for a 6% loss. ICLR gapped down into its stop; the April 30th pick closed for a 5% gain, the later July play finished down 10%. MTZ dropped into its stop price for a 12% loss. WMI closed on a bullish engulfing pattern but the open of the day was low enough to knock out the stop for a 2% loss.
September 4th: Whatever hope for a bounce which was outlined in my blog post quickly disappeared at the open and sellers never looked back. This was the third distribution day in a row leaving tech averages (NASDAQ and NASDAQ 100) totally broken. The
semiconductor index sliced through July lows which means the
NASDAQ and NASDAQ 100 likely will to.
The Dow and S&P also look set to test July lows as there was a MACD trigger 'sell' for the Dow to follow the earlier one in the S&P. The only index to come out with a small degree of hope was the
Russell 2000. It lost a hard hitting 3% but found support at its 200-day MA and potential handle support. The 3% decline is likely to see some reversal on Friday but whether there is a floor of support for the completion of the handle remains to be seen.
Nasdaq breadth indicators [$NASI, $NAA50R and $BPCOMPQ] had not updated at time of writing but don't be surprised to sell all three trading a 3-day EMA below their 5-day EMA. Further declines look likely given the relative position of these breadth indicators and the synchronized 'sell' trigger generated.
I would be surprised if there was not some upside Friday but the technical damage done today was considerable.
REXX was a short play from June 12th. It dropped into its target price and then some for a 44% gain.
Stop hit: CPWR featured a number of times; the May 19th play closed for a 20% gain, the July 21st play finished with a 5% gain. BCON never got out of the gates. The September 2nd play closed for a 6% loss. TS lost its 200-day MA to close the Subscriber pick for a 7% loss.
September 3rd: A second distribution day in a row tore into the
semiconductor index with secondary damage to the
NASDAQ and NASDAQ 100. There was also a net shift bearish turn in supporting technicals for both of these indices. The
NASDAQ 100 followed the
NASDAQ with a break of rising support connecting July-September support. Large caps (Dow and S&P) didn't do a whole lot, but were spared the damage in tech indices.The
Russell 2000 was quiet, keeping its head below the parapet. There were no major breaks of support for either small or large caps.
On the Nasdaq breadth indicators [$NASI, $NAA50R and $BPCOMPQ] there was an interesting development with a bearish divergence in the Ultimate Oscillator of the Summation Index ($NASI) along with a MACD trigger 'sell'. This looks set to turn the Summation Index lower which will impact negatively on the
NASDAQ. Buyer beware.
Stop hit: BIDU exited at its stop after a 'Death Cross' between the 50-day and 200-day MAs. The stock closed for a 7% loss. ECLP clipped its stop in quiet action but held its 50-day MA. The two Subscriber plays closed for a 1% gain and a 5% loss. MA cut through its 200-day MA and past its stop. The August 28th Subscriber pick closed for a 3% loss. PRC hit its stop, but not before it came only a few cents shy of its target. The June 9th play closed for a 10% loss.
September 2nd: A wild day where big gains
gave way to modest losses, but it was the intraday swing which took the breath away. Volume soared to register a firm distribution day, signaling the intent of traders - at least in the short term. Tech averages (NASDAQ and NASDAQ 100) took it hardest with sizable bearish engulfing patterns. Adding to the malaise were the failed tests of the 200-day MAs for the NASDAQ and NASDAQ 100, with the NASDAQ 100 closing below both 50-day and 20-day MAs in the process - very ugly. The semiconductor index did at least post a potentially bullish inverse hammer as it sits only 20 points away from a test of July lows. There was some comfort with large caps (Dow and S&P) as opening lows held as support, but the indices gave back the bulk of the day's gains. However, the technical picture of these indices remained unchanged with support of the 20-day and 50-day MAs holding. The Russell 2000 finished with a more neutral spinning top and could push the market either way.
In the short term another low volume climb would not be surprising, but the intent of Monday's selling was very clear.
Nasdaq breadth indicators [$NASI, $NAA50R and $BPCOMPQ] had not updated at time of writing but it looks like last week's bullish crosses will turn into bull traps.
Time will reveal all.
Stop hit: PRGO clipped its stop to stall one of Tuesday's picks for a 1% loss.
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