Ok, I know we gaped up this morning,and I know we got a little rally into the close to get us positive, but I looked at my screens today and was just amazed at the bearish action I was seeing. From the collapses in the market leaders, or the lacks of new highs, and the lack of leading inustries, it was just really hard to get enthusiastic about anything I saw. About the only positive thing I can say is that we are in the supports zone, but i can; say how long that will continue to be support. I suspect not very much longer.
What was really bearish was that the strongest parts of the market were getting slammed. the Nasdaq 100, in particular, took a terrible beating today, but it did bounce off support at it's most recent low. the Nasdaq has now been lagging for a few days, so it is developing a trend here, and that isn't good.
If there was good news today, it was the that the Russell 2000 held up quite well, but it was in a position where it had to. I see nothing on this chart that leads me to believe this won't start leading the next leg down within a few days.
The recovery in the percentage of stocks above the 50dma on the Nasdaq appears to be over for now, and it looks like it is trending down again. We will have to see what happens here if the market starts moving down again; if it stays above about 10 or so, that could be an indication of internal strengthening in the market.
The same indicator in the NYSE, which is quite a bit weaker than the Nasdaq, although the Nasdaq may be playing catch up here.
The market is flashing bearish signals all over the place. In fact, they are getting so numerous I am starting to smell a potential bear trap coming up. If we break support here and start another leg down, everyone from the Fed to CNBC is going to kick out the stops in trying to sucker the buyers back. It might work, for a day or two, but everything i;m seeing says we are in trouble here.
I will have the new highs update shortly.
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