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Taking a bite out of the markets

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Traders are taking a bite out of the markets before they take off for the holiday weekend. The Dow is down 86 points, but still 36 points above 11,000. The Nasdaq is off 32, and just below 2,250. Finding sectors that are in positive territory isn't easy. The only groups in positive territory are Oil Services (OSX.X) and Chemicals (CEX.X), the two groups that were beaten up yesterday, as well as the Gold and Silver Index (XAU.X). Finding Nasdaq-100 stocks that are up is just as difficult. A measly 10 stocks are in positive territory, with only Peoplesoft (NASD:PSFT) and Dollar Tree (DLTR) up by more than 1$.

S&P 500 60-Minute Chart

A 60-minute chart of the S&P 500 shows a dangerous little head and shoulders top forming. SPX has already dropped below the 50- pma, so the only foreseeable near-term support is the neckline at 1281. A close below the neckline would suggest a drop to 1247, but previous highs at 1267 and the 200-pma may have something to say about that.

Jeffrey Canavan
Assistant Analyst

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