A Pattern To Watch
In midday trading the broader indexes were in
decline once again. The S&P 500
(
$SPX.X |
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to an area not seen since 1998. The S&P with its downward accelerating price action is displaying a Waterfall
pattern. Some past bear markets have displayed this fear-generating pattern during their climatic phase prior to making bottoms.
One reason why the
Amex Pharmaceutical Index
(
$DRG.X |
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is under pressure, is because of another possible "book-cooking"
scandal. Regulatory and accounting woes have hurt the drug sector in recent sessions,
dealing big losses to many of the group’s heavyweights such as Wyeth (WYE),
Eli Lilly (LLY),
Pfizer (PFE),
and Merck (MRK).
Today, more accounting questions surfaced. According to the Financial Times,
Bristol-Myers Squibb (BMY)
inflated its revenues by $1 billion last year and officials of the drug
company have met with the SEC to discuss the
matter. This has put pressure on the sector and the other drug makers.
General Dynamics
(
GD |
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an expansion of its daily range. The stock is concurrently violating a
slanted triple bottom. GE is down 5.32 to 97.94 in Thursday’s trading session.
The Omnicom Group
(
OMC |
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counter trend rally. OMC is carrying a
3-month relative strength rank of 1 with a downtrending ADX of 58 from
TradingMarkets.com.
Several stocks that are trading positive so far
with unusually high volume are: Michaels Stores
(
MIK |
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PowerRating), Engineered
Support Systems
(
EASI |
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(
JBHT |
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and Intuit
(
INTU |
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PowerRating).
The broader indexes have negative bias. The market
breadth at this point is:
NASDAQ
Adv: 1003 UpVol: 65736760
Dec: 2343 DnVol: 56398483
Net: -1340 Net: +9338277
NYSE
Adv: 856 UpVol: 42576660
Dec: 2333 DnVol: 83990441
Net: -1477 Net: -41413781