Nasdaq Market Update for 10/16
Trend lines drawn from 9/3 (31d), 9/24 bottom (17d), 10/12 (5d), and today 10/16 (1 day).
The Nasdaq index action today gave us a great summary of the entire week. An amazing start, and a very disappointing end. Just as Monday was an amazing start to the week, today's morning saw gains of over 1% only to disappoint with -0.36% loss by the end of the day. The candle shows it all with an long upper wick, 50% red body, and a dismal 13% closing range. The only positive is that volume continues to be lower indicating shakeout, but not huge institutional selling. Advancing and Declining stocks remained about equal.
Utilities (XLU) sector was the leading sector of the day. Utilities is the best safe haven for risk-adverse investors who want to stay in equities vs moving to other currency and bond markets for protection. The alternatives just aren't good. Health (XLV) also performed well, supported by the increase in COVID19 cases worldwide.
The only positive trend line right now is the one drawn from the 9/24 bottom. If the index were to regain that momentum, it would mean a +2.56% gain on Monday. That would also be approaching all time highs and be over the highs from the prior Monday. Let's hope this Monday will be a typical Monday in this environment.
The downtrends are worse but don't look terrible. The 1d trend and the 5d trend from Monday's pivot day would result in a -0.49% loss where the index would meet up with the September correction trend line and find support from October trading at 11,400.
I'm keeping the June Support line in view, but its 9% below the Friday close and there are 4 key support levels that the index would have to break thru. If we have a significant downside that takes the index below 11,300, then I'll add that possibility back to the chart.
The Nasdaq index action today gave us a great summary of the entire week. An amazing start, and a very disappointing end. Just as Monday was an amazing start to the week, today's morning saw gains of over 1% only to disappoint with -0.36% loss by the end of the day. The candle shows it all with an long upper wick, 50% red body, and a dismal 13% closing range. The only positive is that volume continues to be lower indicating shakeout, but not huge institutional selling. Advancing and Declining stocks remained about equal.
Utilities (XLU) sector was the leading sector of the day. Utilities is the best safe haven for risk-adverse investors who want to stay in equities vs moving to other currency and bond markets for protection. The alternatives just aren't good. Health (XLV) also performed well, supported by the increase in COVID19 cases worldwide.
The only positive trend line right now is the one drawn from the 9/24 bottom. If the index were to regain that momentum, it would mean a +2.56% gain on Monday. That would also be approaching all time highs and be over the highs from the prior Monday. Let's hope this Monday will be a typical Monday in this environment.
The downtrends are worse but don't look terrible. The 1d trend and the 5d trend from Monday's pivot day would result in a -0.49% loss where the index would meet up with the September correction trend line and find support from October trading at 11,400.
I'm keeping the June Support line in view, but its 9% below the Friday close and there are 4 key support levels that the index would have to break thru. If we have a significant downside that takes the index below 11,300, then I'll add that possibility back to the chart.
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