Watch These Levels On These 5 Indices
Since the beginning of
the year, I have told you I have gone more defensive as the market
has become more defensive. We have only seen high volume down days and low
volume bounces…a recipe for lower prices. In my last report, I told you to
expect a bounce.
I have always told you that I can judge the
markets best by how they bounce after a drop. To be kind, the latest bounce
was as strong as Ashley Simpson’s voice. I have a lot to say.
The NASDAQ…very simply, a closing break below
2066 will be a negative.
The NASDAQ 100…very simply, a closing break
below 1543 will be a negative.
The SOX…a closing break below 393 will be a
negative.
Odds favor these breaks will occur leading to
lower prices. You just can’t continue to have the negative price and volume
patterns on a daily basis without going lower.
I believe the DOW and S&PÂ will hold up better
on any drop. This is because large-cap, defensive names will start
outperforming as the market becomes more defensive. That said, they will
take some sort of hit also…and if the DOW breaks 10,485 and the S&P breaks
1175 on a closing basis, then expect  ugly there also.
There are still groups that continue to act
well…(GAMING, HOUSING, misc. ENERGY, CONSUMER PRODUCTS). Things are just
going to get tougher if those support areas break. TECHNOLOGY/INTERNET and
the like will feel the brunt.
Gary
Kaltbaum