After Friday's big sell-off, equities started today off strong, but it was a very inconsistent day. At one point, in spite of the Dow being up triple digits earlier, all the major indexes were in the red (including the NASDAQ, which was down a hefty 2%). Sadly, there was late-day strength, and the Dow managed to tack on 70 points. All the same, much of the damage done on Friday was still intact.
One of the big stories today was Lehman Brothers, which I remarked on earlier today. The case for some short-term support here is decent.
The broader brokerage picture, however, is still fairly bleak. The $XBD is down 40% from its peak, but as you can see from this graph, there's still plenty of open air beneath current prices. Another 50 points off this index seems totally plausible in 2008.
The widely-anticipated iPhone announcement came today. I mentioned a couple of times last week what old news this was, and the classic "buy the rumor, sell the news" rule held true here. At one point, AAPL was down about 9 points. Even with the drop "only" at $4.03, this chart is more attractive than before.
The Dow itself is a mystery to me at this point. There is much more resistance than there is support. The market just needs a catalyst. But this pattern is just a mess right now, and it's hard to see what's next.
The $COMPQ is a little easier for me to interpret. We've got very strong resistance at 2,550, indicated by the purple line, and a drop below 2,425 would be very bearish.
The $NDX sneaked below its support line Friday, but it plunged below it today. This line is very obviously broken at this point.
The chart below is a weekly, as opposed to the more common daily, of the Russell 2000. A drop beneath today's lows would be a very compelling bearish picture for this index, which I have not been trading for quite some time.
My current index position is in the S&P 500, which is the cleanest chart for me to read at this point. My stops on this are set at 1406.20.
"Fizzler" (FSLR) had another nice drop today, reaffirming how broken its former support is.
And a similar situation can be seen with ISRG.
AMLN, one of my equity shorts, had a nice double-digit percentage drop today.
And I am re-attracted to real estate shorts (both individual ones and the broad IYR ETF).
Akamai has been a slow pattern to develop, but it's looking nice.
One of my favorite, cleanest patterns right now is CHTT, which I intend to hold into the high 40s.
And, finally, one specific real estate short is LRY.
After Friday's fireworks, today was a snoozer. Oh, well! Not every day can be 400 points off the Dow, can it? Good night!
