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Wednesday, October 22, 2008

A New Low Close

The bad news? The SPX closed at a 5 year low. The good news? It closed above the newly forming trendline, although it did put a pin through it. Volume increased quit a bit, giving us a distribution day. MACD is teasing us here, but refuses to commit to one direction or another. Sentiment is getting bearish again, so I wouldn't be surprised to see a bounce tomorrow.

The Nasdaq is also at a new closing low, but never went through the trendline. Range is getting constricted, which could mean an imminent move, but the direction is unknown.

The Russell 2000 also closed above it's trendline. It is far too soon to make any assumptions about trend here, but sentiment seems to be that we are headed further down, which probably means we aren't.
Energy was the big loser today, as oil broke through the support area at 68-70nand closed at 66. It's amazing how many times today that I read comments on other blogs about the "peak oil scam". As you know, one of the themes here has been peak oil and how it will affect the economy. If anyone can show how the collapse in oil price is due to year-over-year increases in worldwide production over the last few months, I'll shut up about peak oil (hint: I've already looked it up. You can't). The Oil drum has a post today on oil prices and why they are so volatile.


Yesterday I posted a chart of the airline index, the industry showing the most strength the last 13 weeks. The industry showing the most weakness is the Metals & Mining index (industrial metals, not gold & silver). XME is the ETF that tracks that index. If we get a continued rally (a big if), this could get the biggest bounce.

I am in the process of updating the earnings list, there were several that reported in the last few days, biut I probably won't have it uploaded until tomorrow.

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