Option Investor
Market Updates

Support snapping like a twig

Printer friendly version

Sticking with my theme of support breaks, lets take a look at the Nasdaq-100 Index (QQQ).

Nasdaq-100 Chart - 60-minute interval

Just when it looked like the QQQ's were forming a nice little head and shoulders bottom, prices failed to push through the neckline. Instead they opened up below the 50-period moving average, and continued lower past support at 41. At least the QQQ's have one last level of support around 39.70, the head of the failed H&S pattern. If that level holds we could be developing a channel for prices to bounce between.

Just to give everybody an idea of the breadth of today's decline, here are some numbers for you.

89 of the Nasdaq 100 are down today
28 of the Dow Jones Industrials are down today
Nasdaq decliners are beating advancers by 27 to 9
NYSE decliners are beating advancers by 22 to 8
Nasdaq declining volume is 164mm, advancing volume 10mm
NYSE declining volume is 861mm, advancing volume 228mm

While this may look bad, there is some positive news. An analyst came on CNBC this morning and thinks the market will be better 9 months from now. Thanks Nostradamus. Based on that you might want to hold off on buying those puts.

Jeffrey Canavan
Assistant Analyst

Intraday Update Archives