The big bad futures drop this morning turned out to be a big nothing on the SPX. Volume was down and the October 10th low held. The COMPQ test was a little deeper (and possibly better), but volume was also relatively lower. I prefer tests that break a significant low and then reverse over a test that does not break the low - as on the SPX today. The test is still in progress and we must wait until next week for the grading process. At this point, the case for the low remains valid.
The number of new lows on the Nasdaq Composite was less than the October 10th low - even though price today broke that low. This is another positive sign for the bulls.
Chart courtesy of Stockcharts.com
Tags: Market Internals · Nasdaq Charts · Standard and Poor's 500 (SP500)5 Comments
5 responses so far ↓
I see many divergences everywhere on every stock I follow and on the composites (MACD, hist, rsi, stoch., roc.) but I guess non matter so far. Price is King
being driven by the momentum of fear. The bubble now is the shorts so I expect that to get bursted next.
Andy/Libbby, Do you still see a black Monday coming up 1987 style where a 20% drop in one day? Thx
regards, Ray
Ray, I can’t speak for Andy, but you have to say to yourself, what the H-ll ’s going on? Lay off’s by the thousands, so many co’s announcing today, Yahoo, Merck, I even read that the Hospital at the Univ. Of Pittsburgh, laid off people, The Dow is down over 6000 points, and finally, the #1 thing I have been waiting on to boil over in our big stewing pot was how much the American people have lost in their 401K’s, and Retirement accounts. Oh, Ray, have you checked your own wallet out lately? Thin isn’t it. I think we need a toad to put in the pot, considering Halloween is in just a few days, maybe that ingredient will help elect the Handsome Prince to Save Us All…. Really Ray, No One, not even the Hansome Prince can save this boiling Atomic Bomb, Now I try to keep my political views to myself, the less goverment we have the better I feel we are. But they won’t leave Capitalism alone, free markets would have already had the big drop done and over with, and we would be watching bank Ceo’s Crawling on the ground and heading to the food lines, instead they went out and spent almost a half a million of our tax dollars to get a massage, and manicure. Ray, something is wrong, and we will pay them the half a million back and more and do you really think those men will stop taking massages and manicures on your wallet? H-ll NO! OK, let me get back to why we will have a big big big drop….. didn’t I just cover that……
Ray - I don’t expect a big drop next week. But I don’t expect a big run up either. The market is on the edge of a cliff and could fall off with the slightest nudge.
–
But it appears to me that the gubmint finally got it together and has a handle on the credit side of the problem. The current economy is in reasonable shape. The problem is that the next few quarters could get ugly. I expect that a lot of that is priced in… but the only way to know is to watch the market. Because the market is deleveraging on a large scale, price will most certainly overshoot to the downside. Are we there yet? Don’t know… gotta watch the market…
–
A new prez and congress will mess up the market… not because they are bad but because of change… markets don’t like change… it could be good change or bad change… but change means that leaders will get hit and laggers will become leaders… is this priced in… don’t know… gotta watch the market…
–
Note that the 700billion in bailout money will be used for the first time on Monday. So far it has been all talk. Next week money will be placed into the market.
Sorry Andy and Ray, went off on my witch’s brew theory, I have had alot of time this morning to go over a few more things and I do have to say that Andy is on to something, our time window is running out too, of course I have to say it would be nice to have a few Up days, but I think we may just go sideways. The mutual funds will probably get things going again, but that is on the 31st. So, we just have to wait, but remember the Pot is boiling over, and elections day is coming, but I still have to go with my coin toss guy’s tails down. I do apologize for my outburst last night though, a friend with alot of years in local co. was told that they had no pensiion left after 32 years on the job last night, and that his pay check would bounce for the past two weeks. So, now guys this is hitting Home, but I am sorry Ray and Andy, have a good day.
Libby - Feel free to rant. I don’t mind. You can always remove anything later if you change your mind. If you say anything too wild I will remove it for you…
But so far you have not come close to the line. I get my rants out on other forums so I don’t upset readers here with differing concepts of reality… 
–
Sorry to hear about your friend. That will happen to many, unfortunately. Old economy companies cannot build up long term commitments with shorter market cycles. GM, Ford, their suppliers, and the airlines have big problems. Nobody’s fault. Just the nature of capitalism and free markets.