Comment: A poor night on solid volume. Almost a carbon copy of the previous session. Indices were well off their lows with the Dow 30 finished close to its mid-point. The intra-day move up occurred in the last hour. The Nasdaq100 is now at “double whammy” support – oblique and horizontal. A break lower here would be very bearish.
NewHighs/NewLows 105/99. NH>NL. The ratio of NH/(NH+NL) is at 51.5%. Out of the Do Not Sell Zone. New Highs were dominated by fixed income securities which often do well in a falling market. New Lows are now at panic sell levels.
Technical Comment on the Dow 30:
The Dow finished at 12617.3. Support/Resistance: 12492.2/12764.5. Indicators: MACD Histogram. Below zero. Negative. MACD. Marginally above zero. Neutral RSI.9 is at 41.2. Negative. Stochastic. 47. Negative. CCI.14: -94.7. Negative. The 10-DayEMA (blue dotted line) is above the 20-DayEMA (red dotted line). Positive.
The medium term trend is up. The short term trend is down (as measured by the 5-Day EMA). The long term trend line from early May has been broken to the downside.
The Dow 30 last night bounced off the dual support of the lower Bollinger Band and the slightly kinked upwards support line (solid red line). After a second day of bullish support in the intra-day trading, bulls have been making their presence felt. A break lower below dual support would be very bearish.
Apple Inc. reported results in after hours trading. Aapl is the largest stock by capitalisation in the market. Its not a Dow 30 component. Its results were below expectations and in after-hours trading is down 5%. Such a result will hurt general market sentiment and have an immediate effect on the Nasdaq100. It’s going take something very surprising to prevent this market going lower. However, let’s see how it progresses. The next session’s trading could be a wash-out event and the smart money might come back in. But we have to see how it progresses. No point in counting chickens.
It looks like my optimism regarding a respite for the Australian market last night was misplaced. We’re now set up for the next leg down in the Ozzie market.
Here's an update on the VIX:
The VIX closed around the 50-Day Moving Average. The CCI14 is getting high - but on the VIX it can easily reach close to 300 before reversing down. A move above the 50-Day MA would be very bearish for stocks. The target zone is marked on the chart.
(20min delay)