Program trading curbs have kicked in this morning on the NYSE as the Dow Industrials (INDU) 8, 152 -1.9% traded down the needed 180 points and will stay in place the remainder of the day unless the Dow trades back to within 90-points of Friday's close which was 8,313.13. This means that program trading can not resume unless the Dow trades 8,223.13.
Dow Industrials Chart - $50 box
Today's "curbs in" may have kept the Dow Industrials from trading the 8,100 level, which would have had the $50 box triggering a sell signal on the point and figure chart. With the "curbs in" on computer buy/sell programs, this has stocks stabilizing at their session lows after this morning's release of weaker-than- expect ISM non-manufacturing survey results for July.
According to www.programtrading.com, 36.2% of the NYSE volume during July 22 to July 26 was program trading related. "Buy programs" were 51.6% of the total program trading, while 48.4% were "sell program" related.
Qualcomm Chart - $1 box
In Friday's premierinvestor.net wrap we mentioned that telecom and telecom service stocks would most likely remain suspect to lower levels of trading. Shares of Qualcomm (NASDAQ:QCOM) $23.57 -7.82% gave a glaring sell signal at $24 today and are breaking to a new 52-week low. Look for bears to either be rounding up to full short positions here, or establishing new 1/2 bearish positions with longer-term targets of $16.
Other telecom stock exhibiting weakness today are Verizon (NYSE:VZ) $30.49 -4.65%, SBC Communications (NYSE:SBC) $26.46 -3.95% and AT&T (NYSE:T) $8.83 -8.91%.