Stock Market Selloff Continues, No Relief in Sight

Trader Talk

The major stock indexes traded lower today, with the NASDAQ dipping 1.2% on 2.1 billion shares, and the Dow Industrials slipping 0.4% on NYSE volume of 5.4 billion shares. The leadership profile continues very negative with only 77 stocks making new 52-week highs, and 1053 posting new lows.

The short term momentum oscillators are negative, confirming the bearish stance of the AlphaKing Trading Indicator. We have no new trades at this time.

Futures were up strong early this morning on news that the Fed will support Freddie Mac and Fannie Mae, which hold 50% of all U. S. mortgages, but the higher open quickly faded, as the reality of the dour situation in financial stocks set in. Big takeover news no longer buoys the market. The market is very oversold, but investors understand that it can stay oversold for a long time. We see no reason to cover our short positions now, and we'll add to them on a decent rally that meets our upside counter- trend rally targets. We may cover our shorts on a big selloff from these levels, depending on our market indicators.

Chief Trading Strategist Kevin Wilde will return from vacation next week.

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