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The market was very volatile today. SPX closed below 700 today. Not a good sign! This weekend, in my Market Forecast, I said,
"For the new week, SPX and Nasdaq look like they are on the start of a new leg down. SPX 700 and Nasdaq 1300 are the nearest respective supports."
SPX is presently testing that 700 level, and, closing below it does not lend much confidence. Nasdaq is getting very closed to 1300. This morning, the market opened higher, but, in our Trading Room, I commented:
HappyTrading market
still bearish; probably going to take another day and tomorrow morning to sort things out...
So, the market went through some wild fluctuations today trying to "sort things out". The bulls are seeing a chance to turn the market up, using SPX 700 as a support. But, the bears are seeing a chance to break SPX 700 and push the market even lower, as the sentiment is definitely still on their side.
There were plenty of big movers on the market today. Among those were: PRU -12.6%; AZO +7.79%; NFLX +5.85%; GENZ -7.15%; FSLR +6.22%. This morning, AZO reported great earnings and saw buyers rushing in to pick up its shares. AZO traded as high as $157.49 and closed at $150.94. NFLX shares jumped as BBI was rumored to be considering filing bankruptcy. GENZ shares slumped as FDA issued a delay on its drug Lumizyme, a treatment for the genetic disorder Pompe disease. FSLR shares got a boost as it took over a $400 million contract from Optisolar.
The Dow was down 37.27 points; SPX lost 4.49 points; Nasdaq slid 1.84 points:
Many sectors were actually having a good bounce. But, XLF (financials) and HGX (housing) were both in the red! USO (oil) added +3.72%. XME (metals and mining) gained +3.51%. GLD (gold) and SLV (silver) could not find any strength. MOO (agriculture) was also among the stronger sectors, closing higher by +3.64%. FXI (Chinese ADRs) managed to advance +2.19%.
SPX
SPX lost 4.49 points to close at 696.33, below 700. Its daily MAs and MACD were lower.
Nasdaq
Nasdaq slipped 1.84 points to close at 1321.01. Its daily MAs and MACD were also lower.
Both SPX and Nasdaq are looking really weak. With SPX closing under 700, it is another psychological blow to the bulls. The ultrashorts, such as SKF, SRS, EEV, traded all over the place and ended mixed. However, most ultrashorts are still showing bullish daily charts, which does not bode well for the market. VIX closed down today, but, still closed above 50. We'll have to see how the market moves tomorrow morning. The market tried hard to turn from the bottom today, but, was not successful. If SPX 700 breaks down, the market has a lot more distance to go down! The ultradshorts are still great ways to profit from this volatile market environment. They have run pretty far up recently and still have room to go higher; at the same time, if the market does bounce, they can come down in a hurry too!
Good night and HappyTrading! ™
