The markets opened the new year with a whimper. They gapped down on the ISM news (which came in at recessionary levels) and then continued to drop as oil spiked.
Here's the 5-day SPY chart.
Note:
1.) The gap down on the Chicago news
2.) The heavy volume
3.) The increase in the steepness of the move down compared to the previous 4 days.
The same points from above apply, with the addition that the QQQQs may have formed a double bottom today.
The IWMS (Russell 2000) have been in a weaker, downward trajectory for the last 5 days. They simply continued their pattern today.
On the daily SPY chart, notice prices are now at the lower trend line of either a triangle or a diamond top (pick your pattern). Also notice the volume really picked-up today.
Technically, the QQQQs are still in decent shape. They are still consolidating within a range.
However, before we go an get excited about the NASDAQ because it doesn't have any exposure to real estate:
45 of the 100 NDX stocks have 200 DMA that are already declining (they are in intermediate to long term down trends).
56 of the 100 NDX stocks are below the 200 DMA.
68 of the 100 NDX stocks have a declining 50 DMA (short to intermediate term down trends).
67 of the 100 NDX stocks are below the 50 DMA.
and last but not least 50 of the 100 NDX stocks have 50 DMA that have crossed under the 200 DMA.
Of the 33 stocks above the 50 DMA only 14 of them are what I would consider strongly above (making new highs) and 5 of those 33 stocks above the 50 are still below the 200 DMA.
This doesn't paint a pretty picture for tech being a safe haven for investors with only 14 stocks in strong technical positions.
This is why market breadth is so important. Fewer and fewer stocks are responsible for the market's advance.
On the IWMs, remember the blue line is a 4 year support line for the market's rally.
