{+++}We saw another gap down today and the DOW closed down 118. For the day the SPX/DOW were -0.70%, and the NDX/NAZ were -1.25%. Bonds gained 12 ticks, Crude was flat, Gold was flat, and the USD was lower. Medium term support drops to the 1956 and 1929 , with resistance at the 1973 and 2019 . Tomorrow: the FOMC minutes at 2pm.
Someone said today that they were 40%, cash but if felt like they were 120% leveraged. That’s a good way of putting it because you don’t have to have a great deal of exposure to take deep paper cuts on a day when some stocks were down, 5,6, even 7 points.
Today’s action was eerily reminiscent of early and mid May when some momentum stocks in the cloud or software as a service space were down 5% each day. DATA was down 7 today, FEYE down 3.20, NFLX down 15, VIPS down 12, Z down 5. So history does repeat and they are coming after these stocks again after they had such nice rallies off the lows.
SPX managed to close just below its 10 day moving average and above its 30 day moving average. The Dow pretty much did the same.
The Nasdaq held its 10 day moving average , but the Russell broke its 10 and 20 day moving averages.
Bottom line, we’ve all seen a lot worse and it will be very interesting to see if the bulls can it least keep the market glued together over the next two days.. We don’t necessarily need a big rally right a way, but a stop to the bleeding would be a good start.
See you in the morning.