Internal damage

The Nasdaq took the brunt of the fall yesterday and the weakness in the tech stocks took down the Dow and S&P 500 with it. 

Why do I say that?  Because the NYSE Composite Index was down less than $1 or basically flat, and there are nearly 3000 companies listed on the NYSE.  How did that index escape injury?  Well, it didn't.  841 more stocks were down than up yesterday on the NYSE.  That is what I'd call internal problems.  The index appears fine but digging deeper you see the trouble.

The market is again in a spot where it could get a little bounce as the short term indicators are getting oversold.  One loose tendency for the Thursday of options expiration week is for it to reverse Wednesday's action to some degree.  Next week, post options expiration week, is when the historical trends gets negative. 

So far the S&P 500 is up about .50% in September.  Historically September does well in the first week, then has trouble.  Remember this chart?


                               Chart provided courtesy of www.sentimentrader.com

One more time for the unusually high OEX put/call ratio we are now seeing.  The last time the 15-day moving average of the OEX put/call ratio was this high was in June of 2004.  Here is the 2004 chart...


                           Chart provided courtesy of www.decisionpoint.com

That's all for today.  Currently 100% G fund.  Be careful if you are in stocks.  It could get ugly soon.  Thanks for reading.