When A Market Acts Like This After Giving You A Few Nice Longs It Is Very Bearish; Stocks Selloff On Lighter Volume, Sending Some Indexes To New Closing 52-Week Lows
March 6, 2008 | 3 Comments
There is almost no other way to spin this day other than extremely bearish. From the morning to the close, the market sold off all day, with the only bit of consolation coming in the form of lower volume. However, the ferocity of the selling with absolutely no bounce, coming after quite a few recent nice charts have setup, is very bearish. If this market can selloff like that on lower volume, imagine what it is going to do once institutional investors get back to selling.
When I woke up this morning and saw the damage, my first reaction, was sort of a bit of bewilderment as we jut had two handfuls of charts setup in very nice patterns in leading sectors. So when I saw the selloff I was immediately disappointed that the few longs that setup can’t even get the market going a little bit. This disappointment, is obviously not from the market being down (you should ALL know that I am VERY bearish on this market, by now) but the fact that even when it appears that it can bounce, it can not. With that kind of action, it seems impossible to think that any “HOT” charts can setup. So throw NEU and CMP to the dogs. They can’t be perfect anymore. Nothing can be, right now. The charts, minus the metals, are in trouble.
Not only are stocks in trouble, but every piece of economic data that comes rolling in is literally rolling off the charts. Today it continued with word that the total amount of all mortgages that were in foreclosure was .83% which was a record high. Not only that, but the delinquency rate hit 5.8% which is the worst since 1985. Data like that, combined with the Fed telling us that American’s debt on their homes is higher than equity in the home for the first time since 1945. That happens to be when they started keeping records. It is quite possible that this is the lowest ever.
