QQQQs: down .74%
IWM: down 1.04%
All of the averages had similar patterns today -- up until a bit before lunch then down for the rest of the day. The SPYs had an end-of-the-day broadening pattern which is a reversal pattern.
Also notice we had two gaps downward today. But also notice the gaps down were not followed by extreme downside action. I think this indicates the Bernanke/Paulsen floor is still in place.
With the QQQQs, we see a much cleaner version of the up and down nature of today's trading. With the QQQQ's notice the gap down two bars before the close on high volume. The market wanted to drop but didn't.
The close came just in time for the Russell 2000. Notice the heavy selling at the end. The index wanted to dive but the close prevented that from happening.
What's important today is none of the markets could continue their respective rallies. The bullish sentiment just wasn't there. But in the context of last week's advances, today's sell-off still looks like a natural, profit taking session.
There are two other charts that I think are important right now.
Although the transports participated in last week's rally, notice they didn't break their overall, six-month downtrend. The index is still below the 200 day SMA by 7% which is not good.
The financials broke their two-month downtrend but are slipping back below that trend. We need a few more days of price action to see if this continues or not. However - it's also possible we're seeing a simple sell-off from last week's action here. Because the financials are the largest sector to the S&P 500 their action is very important.
Overall, the markets still look really messy -- there isn't any disciplined coherent action in any one direction.
