Stock indexes and gold lower in volatile session

spy0116.pngStock indexes sold off on the open today, then rallied into positive territory, then sold off again to close a little lower than the open, but off the lows. The Nasdaq futures closed right about where they opened, leaving a candle that appears as indecision. Momentum is down in all the indexes, as are the trends, with momentum most oversold in the Nasdaq according to the indicators I use. Price action appears lower and sentiment getting more and more bearish, so to confuse the most people the market is probably ready to bounce. The only positives I see are a slight look of a washout with that small tail on the candle, and that was accompanied by a small spike in volume in some of the index etfs and e-mini S&Ps. Not a convincing climax, but might be enough for a dead cat bounce. Maybe a very small dead cat. Also, I see some symmetry in the current down-leg with the previous down-leg. I put the standard error bands on the chart of the etf S&P to the right, instead of the usual mesa adaptive moving average lines. The bands smooth out the price data to show the impulse and reaction legs fairly well. With trends and momentum down, I still want to look for clues for a bounce, no matter how small the clues might be.
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The Baltic Dry Index, as shown in the chart above, dropped over $400 today. It has now violated the last fib support level and headed on down to the 100% correction level of the last big impulse wave up, as I suggested in might a few days ago on this blog. This does not bode well for commodities and the bubble Chinese and Indian markets. CNBC and some financial publications seem to have discovered this index. I hope that isn’t the kiss of death for its usefulness, as seems to be the case with the VIX. I noticed that CNBC reports the Baltic value from the previous day. I don’t know why they don’t give the current day reading. Maybe someone gets it first thing in the morning before the current figure is available. The $6915 number is correct for today. Gold was lower, as was expected. Trend is still obviously sharply higher, and now momentum is getting oversold. V shaped tops are rare, so one should expect some backing and filling as trends turn down, possibly with momentum divergences to get short. This is one big bubble. Speaking of bubbles, the much owned bubble stocks such as AAPL, BIDU, RIMM, and  GOOG are finally starting to crack, with technical damage and with trends turning, finally. Trees don’t grow to the moon, although most analysts say they do when the stocks are at their peaks.

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