Sellers jumped on board positive early action today, driving the major stock indexes hard into the red by the close, with volume a tad lighter than yesterday.
Officially, the NASDAQ fell 2.3% on 2.4 billion shares, while the Dow Industrials dropped 1.5% on NYSE volume of 5.3 billion shares. The leadership profile remains very negative, with 106 stocks making new highs versus 816 stocks making new lows.
The short term momentum oscillators remain negative, confirming the bearish stance of the AlphaKing Trading Indicator. We have no new trades at this time.
The S&P500 continues to flirt with its March intra-day low around 1260, closing just 1.5 points above that must-hold-if-we-are-to-avoid-a-crash level. This fits the usual bear path that suggests a retest of the 2002 lows is in play. What we should see here is a hard breach of current levels that runs for a while, before a snap-back rebound to broken support lands. And from there the great bear slide would resume. So perhaps one more week of hard selling to be followed by a one to two week rally before the crash run resumes. An out-right running crash from this position is not out of the question, so do not look at any potential for a rebound rally with the view of making some profits on the long side, rather continue to be heavily invested short through-out this process, and look to add to those short positions on any rally.
Kevin Wilde, Chief Trading Strategist AlphaKing.com.
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