Another gross day yesterday until a late burst cut losses. Just keep in mind, every time down worsens the internals of the market. but…we have a big BUT here…
On the way home yesterday, we were floored by how many were now talking about support levels and moving averages. Normally, Wall Street does not give a crap about them. Wall Street is all about “the fundamentals” and earnings not realizing the markets are normally forward looking. We were floored by how many said support had been broken which meant it was a lock to go lower. We were floored because support HAD NOT been broken yet as the Feb 9th lows are still in play. A strong weekly hold of that level could and would go a long way into the defense of the recent downside action.
So…we leave you with this:
The internals continue to head south. More and more names broke near-term support. Most areas of the market have topped on a near-term and on an intermediate-term basis. Many foreign markets are worse than ours. The upside now has massive resistance on any rallies to the upside. Leading growth names have been hit hard. Major indices looked poised yesterday to take out some of those longer-term levels BUT…again, at the close, THEY DID NOT and until those February 9th lows are taken out (which would coincide with the longer-term moving average support we have told you about), careful as the drumbeats just got louder that markets HAVE BEEN in trouble.
At the very least, markets are going to remain a tough proposition, on the vicious drops as well as the vicious bounces.