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Thursday, December 8, 2011

Santa Brought A Lump Of Coal

There was no stick save today (despite a late rumor, which was quickly denied) as the market tanked on the Eve of the Euro summit, which is expected to be a sell the news event. Also weighing on then market was the unemployment claims, the numbers of which were actually quite good, but the "seasonal adjustment" was so absurd that nobody bought it. Intraday support at 1240 was broken late, leaving only 1215 below us, but, if you will notice the 200dema, we might be finding support there. oddly enough, the resistance at 1267 happens to be the simple 200dma. If we get a Santa rally, it will likely come after a drop first, because it looks like we can put a fork in this rally. 
 The Nasdaq 100 is in no better shape, although it might be finding support at the 50dema. I would not count n it, but then again, the 200dema is right below it. For the past two weeks, this has met stiff resistance every time it tries to move up, and it appears ready to give in.

The Russell 2000 put an exclamation point on the  rally killer today, seriously under performing. This also might find support at the 50dema, but I am not counting on it.

The percentage of stocks above the 50dma on the NYSE is telling us it's not quite pani time yet, but it did take a big drop today, so panic time might not be that far off. If this drops below 55, look for either a quick turn around, or a drop to below 35. That will tell us a little about how long this dip will last and how deep it will go. So far, this is still cautiously bullish.

Not so the Nasdaq. Not only did it drop below 50 today, the recent rally took it just barely above 50, showiung how significantly weak the Nasdaq has been. If this does not turn around quickly (like tomorrow), this should drop dwon below 30, where it will likely reverse and lead to an up move. Whether that will be a new rally or just a bounce is not something you can divine from these charts, but right now it looks like we are in for a at least a minor leg down.

This latest rally had no leadership and no volume behind it, indicating it would likely be short and shallow, and that is what we got, It appears to be over for now, let's wait and see what we get on the way down.

I will have the new highs update shortly.

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