The Nasdaq: breaking support
Gary Kaltbaum is an investment advisor
with over 18 years experience, and a Fox News Channel Business Contributor. Gary
is the author of
The Investor’s Edge. Mr. Kaltbaum is
also the host of the nationally syndicated radio show “Investors Edge” on over
50 radio stations. Gary is also editor and publisher of “Gary Kaltbaum’s
Trendwatch”…a weekly and monthly technical analysis research report for the
institutional investor. If you would like a free trial to Gary’s Daily Market
Alerts
click here. 888-484-8220 ext. 1.
We have been telling you that until the “markets” break support, they continue
to get the benefit of the doubt. We have also told you the NASDAQ-types have
been lagging badly. For the NASDAQ
(
COMP |
Quote |
Chart |
News |
PowerRating) and NASDAQ 100
(
NDX |
Quote |
Chart |
News |
PowerRating), the benefit of the doubt is
history. The NASDAQ easily sliced through its 50-day
moving average as well as
near-term support at 2300. Next support will be the more important 2232-2240 area.
The NASDAQ 100, which is much weaker than the NASDAQ, easily sliced through
the 50-day
moving average and broke support at 1680. Not only was the 50 day
broken, but the 150-day average as well. Next support…and vital is support
is 1633.
The SOX is now coming apart at the seams. It has been laboring and lagging
since its top in January. It is now on the verge of breaking longer-term
support at 489.
We suspect the NASDAQ/NDX/SOX/INTERNET/BIOTECH are only going to get worse.
INTERNET and BIOTECH have been in their own private bear market. The amazing
thing is that these areas led the market out of the brutal bear in 2003. Now
they are leading it down. We would completely, seriously avoid these areas as
all bounces will be sellable as supply has taken over.
We suspect there is risk here. The strongest groups as well as many of the
markets around the world are stretched and extended way beyond the norm. They
are going to correct and believe this will be the opportune time.
As far as
the other major indices, we believe they are going to correct also. Just keep
in mind, if the NASDAQ drops 10%, the DOW will drop 5%…and so on. This is
normal as the NASDAQ usually leads down and up. We also want to make note that
the DOW has been leading recently which is never a thrilling sign.
As far as COMMODITIES go, they are the highest of risk here. Some names
actually have been Internetish…as their charts look like the Eiffel Tower.
We suspect and believe that serious corrections are due also.
We will have a much bigger report on Monday…but we urge you to now start
playing defensive as many areas are speaking very loudly.
Gary Kaltbaum