No sign of a bottom yet, as the market endures its most relentless selling in years. Without a 90% upside volume day to suggest that sellers have been washed out, the advantage will continue to go to the bears, as sentiment and capitulatory selling have given bulls an opening they have been unable to take advantage of. The biggest hope at this point is that the Dow (first chart below) can hold the important 12,800 level. To the upside, the index needs to get back above 13,000 just to get started, and more importantly, 13,200-13,300. If Dow 12,800 goes, the S&P (second chart) could be headed for 1370-1380. 1410 and 1427-1429 are just the start of resistance for the big caps. The Nasdaq (third chart) could be head for 2400 if it goes much lower, while 2500 is now obvious first resistance. The 10-year yield (fourth chart) isn’t getting much of a flight to quality bid here, as traders seem to be moving into short-term T-bills, which caught the biggest bid today. Now that’s panic — and a bet on Fed rate cuts.
Paul Shread is a Chartered Market Technician (CMT) and member of the Market Technicians Association