Stocks, gold, dollar, beans all lower

spy0306b.pngStock indexes fell back today, and in most indexes the drop was a new low on a closing basis. I was looking for somewhat of a bounce in the Nasdaq, and it started to rally a bit early in the session, but selling came in and all the indexes got clobbered, but for such a large range day volume was a little lower on most of the indexes. The S&P chart looks the weakest, so I’ll show that today. I drew cyan lines at a band of support, with the lower band on the high of the Jan 22nd candle, and the upper line and the body of candles from 1/18, 2/7, and 3/4. Today the SPY closed right at the lower support line as I’ve drawn it. There is still another objective at the intra-day lows. Momentum is still down in the S&P, but it had slightly turned up in the Nasdaq as I pointed out yesterday. On the SPY the open was right on the three day pivot (yellow dots) and proceeded to move down from there. The Nasdaq was less clear as price moved above that pivot but reversed and closed well below it, again on lighter volume. Sentiment is extremely negative, with many analysts citing the break of the old low on a closing basis. If everyone believes that this is the start of the next leg down in the bear market, which is what I’m reading and hearing almost everywhere, the market will probably do what it can to fool the masses. I admit the technical picture looks bleak, but a rally still wouldn’t surprise me. It would be unexpected. I don’t have much evidence of a potential rally. There was slight evidence yesterday in the Nasdaq, but it was very slight and that’s on hold after the action today. It will be interesting if the well advertised new low can attract selling in the next day or two. This may well be the start of the next leg down, but it just seems too easy.
The gold market backed up a bit today in the face of a sharply lower dollar and higher oil. Beans got hit hard with a 50 cent down move, but even a move that large looks like a minor blip with such a powerful uptrend. I think the commodity story is getting a bit old and ripe for a shakeout. Maybe that’s just my contrary nature. Momentum traders usually pile on when the trends become obvious. The market has a way of dealing with momentum traders. For those riding the wave, don’t forget to take profits on the way up.

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