Option Investor
Market Updates

Major indexes turn negative

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The Dow Industrials (INDU) has slipped into the red and is currently trading at 10,914, the S&P 500 (SPX) and NASDAQ Composite (COMPX) are also trading lower with one hour and fifteen minutes to go in this trading session.

Dow Industrials Chart - last eleven months.

Currently, the INDU is now below our "confirmation" level (c) near 11,000. Traders should be alert to a break below our short-term uptrend (thick green). Traders probably should take a neutral stance here.

S&P 500 Index Chart - last eleven months.

The overriding trend remains down, but our short-term upward trend remains intact (viewed positively). Traders that are trading from the bearish side can still be placing their stop on a break above the 1,351 levels. MACD is below the zero line, but is turning higher.

NASDAQ Composite Index Chart - last eleven months.

The above index's overriding trends remain negative. With one hour to go in trading this index is quite lower and it looks like the bears are back in control here. MACD is below the zero line and starting to turn higher.

Observation Review

Since Labor Day, the NASDAQ has not put together two positive days in a row. Although yesterday's rally was refreshing, traders should not have the impression the NASDAQ will continue to rally from here and any bullish trades should be implemented carefully. We would like to see the index start to build a base and then wait for some downward trends to be broken before getting more aggressive in their buying. Until then, be willing to trade for profits and build your account with discipline.

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