The Next Level For The Nasdaq To Hit
In my last report, I purposely wrote only about the
specific areas of the market that I thought were starting to be in
trouble. Today, it is more important to talk about the major indices. On
Wednesday, the market had a huge negative reversal day. You should know the
drill by now as this market has had many reversal days over the past couple of
years. When the market opens up in a big way, reverses down…and closes down,
it simply means that everyone who wanted to buy…bought. At that point,
sellers get the upper hand. This most always leads to more downside testing.
I suspect the NASDAQ has a date with its 50-day average at 2120…and more
importantly, 2100…the last important breakout. At the very least, the
NASDAQÂ is toppy and looks to be on defense here after a good run. The NDX
needs to hold its breakout at about 1560.
I would then ask you to refer to my last report on all the sectors that have
turned down. Areas like REITS and HOUSING have come a long way…so if they
wanted to…they could see further drops.
I also wanted to point out that even at the highs of Wednesday’s action, the
NEW HIGH LIST was half the size it was in the past couple of weeks even though
the market was in the same spot. This is a negative divergence that should
tell you fewer and fewer stocks were doing the job.
Lastly, I heard numerous pundits blame OIL PRICES at $65 for yesterday’s
reversal. What’s the difference between $64 and $65? Not much…so don’t buy
into it. On a daily basis, I can come up with a reason the market should go up
and a reason the market should go down. Care more about the action and leave
the WHYS to the geniuses.Â
Gary Kaltbaum