Negative Expectation Breaker as the Market Falls 2%

Hi everyone,

Let’s dive right into today’s (Thursday’s) action. We’ll cover the general market and then individual stocks that are standing out.

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The General Market

After a strong close to Wednesday, the market suffered another expectation breaker as we gapped down and saw more distribution.

The QQQ closed down 2.88%. Net new lows increased on the Nasdaq. We slightly undercut the YTD lows.

The SPY finished down 2.09%. The NYSE continued to make new net lows.

The IWM was down 2.24%

The VIX remains high.

The T2108 is still right near 10%

The McClellan Oscillator dropped back into “oversold” territory

Trends (4/4 Down)

Short-term: Down (Below a declining 5 sma)

Intermediate-term: Down (below a declining 21 EMA)

Mid-term: Down (Below a declining 50 sma)

Long-term: Down (below a declining 200 SMA)

Overall Thoughts

Today was another reminder that as long as we remain below declining moving averages you should not get overly enthusiastic about even multi-day rallies. As Brian Shannon would say, this market is guilty until proven innocent.

The indices remain right near YTD lows although they have so far shown respect for them. Anything can happen. Don’t think just because we are “oversold” based on some indicators and sentiment is negative that we can’t continue to push lower. Be patient but ready and know your timeframe and edges.

When the market is starting a new bull market it will be obvious and we won’t have enough money to buy all the great setups we see.

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-Richard