Yesterday was the last day of the quarter and, as usual, institutions were positioning some stocks that already had gains, a practice that Wall Street calls "prettying up portfolios."
But the last 45 minutes of trading may have revealed the true trend, as sellers drove the Dow down more than 115 points on the highest volume of the day.
The good news was that the major indices managed to hold above their respective 20-day moving average lines. But the S&P 500 failed to hold the 800 level, and many technicians felt that it was necessary to stay above that "psychological number" if the rally was to continue.
Most importantly is that momentum on the S&P 500 has fallen from a record high to just above "flat line" in just six trading sessions, and that's enough to give any bull nightmares. The last time the market had a momentum crush of that magnitude was in December 2007, just before the big fall from SPX 1,477 to 1,308.
So with the new quarter upon us, the bulls may have no place to hide since every internal indicator is now telling us to expect a modest to moderate sell-off. Our downside targets remain at S&P 752 to 737.
My Trade of the Day is Gold Fields Limited (NYSE: GFI). With gold in a powerful uptrend and GFI profitable, the stock has a new trading target.
Sam Collins is a contributor to OptionsZone.com.
Google's plan for netbook PCs moves higher into the clouds
So long peak oil, here comes peak uranium
Black Friday expected to be strong, no promises for Christmas
Reader Comments (Page 1 of 1)
4-01-2009 @ 10:22AM
veyron3k3 said...
Just wanted to say, this column is the 1st one I read every morning.