Cracks In The Financial Sector

 Yesterday's failure to stay above 1180 set the stage for today's drop, which could have been a lot worse had it not been for a surge of dip buying toward the close. Today's standard Thursday unemployment claim news, which hasn't changed in months, didn't help any, and severe weakness in the financial sector, as it appears to be dawning on the market that the banks are in serious trouble again, held the market down, even with some strength in commodity areas.  We are still close to nesebleed area on the RSI, and MACD is flopping around,  and today's drop was not enough (I think) to qualify as a distribution day, so there is still no indication of a collapse imminent.

 The Nasdaq did not get the volume, so distribution is not an issue here. 2450 is the line of death here, and so far it has held. We have a gap just below us that might be support, but I'm not counting on that.

 Once again, the Dow industrials take the lead, meaning the market a has again gone defensive.

 Here is the percentage of stocks ont the Nasdaq that are above the 50dma. I have the bullish and bearish lines at 50 and 30, respectively, and a new line, at 70, where the market looks, at least in the last year, like it tops shortly after hitting that percentage. it is now at a 52 week high, so, if past history is a guide, look out below.

 The same thing on the NYSE. here ETFs and closed end funds cloud the issue, but the lines are probably close to being right (here the "top tick" percentage may be 80 rather than 70). This is also at a 52 week high.

Today's flash crash.This has a fairly large float (182 million shares) and is heavily traded, so somebody really had to work at dropping this one, but they did it.  It came back so fast it sure makes you suspect somebody's computer was sitting there waiting for it to happen. Bye, bye stops.

The foreclosure fraud mess is starting to affect the market, and that probably means another leg down. Whether or not the falling dollar can lift commodities enough to make up for it is unknown, but it probaly won't last long. just think, falling stock prices and rising food and energy prices. Isn't recovery wonderful?

I will have the new highs update shortly.