Another day, Another drop
With stocks in the red all day, the DJIA closed the trading day down 216 points. It now rests below 13,000, below its 200 day moving average and only 115 points above the August low. As the Dow Transports head lower each day, we are very close to a Dow Theory Bear market signal. Should the DJIA close below 12,845, look out below.
As stocks took a beating in the final 30 minutes of trading, the NASDAQ managed to close above its 200 day moving average. As the only index to still rest above the 200 day, we must ask whether technology has weathered the storm or if it is the next shoe to drop. At this point, we lean toward the latter. For the past three weeks this market has found a way to continually push lower. Rallies have been sporadic and unsustainable. Even last Tuesday’s monster 360 point rally has failed to turn into anything long lasting. At the same time, the selling has been constant and convincing. We feel the bears will not rest until they have touched 12,845. It could come tomorrow, or it could be a few weeks. However, until that key level is touched, we refuse to believe in any rally.
I think this decline is pretty justified. I’m on the sidelines right now and I don’t see any good reason to get into the stock market.
Same here. I’m not a bear, but I would call myself a bull who’s not buying.
The NASDAQ has the 200 MA right below it as strong support, I am really curious to see how long this holds up. The S&P500 on the other hand yielded another distribution day and closed at more multi-month lows.
The weakness is quite amazing. I expected stocks to drop, but to have little if any resistance is certainly surprising and shows just how much of a hold the bears have on the markets right now.