The S&P 500 is now down 4% for the month, meanwhile that Equal Weighted S&P 500 Index (same 500 stocks) is down just 0.27% in September, so this has been mostly about investors lightening up on those large tech stocks that had worked so well over the last several months.
Internally the market didn't end up that bad considering the carnage we saw at the lows of the day. Decliners beat advancers, but not by all that much. We can see 2 to 1 down to up ratios on a normal benign down day, so these numbers aren't telling any big severe bearish picture, but the next chart might make you a little more nervous.
There is a lot going on in this chart, perhaps too much for it to make any sense, but you can see we saw a negative reversal day and a spinning top at the top of the range, gaps filled and another opened, the 50-day EMA being tested and holding with another spinning top, and a big ugly bear flag that makes it all troubling. The big battle now is between that bear flag and bull market's 50-day EMA support line. Makes your decision easy, right? :)
Today is an options expiration Friday, and I believe the last time that I told you that they tend to be rather quiet days, we had a big move in the market, so I won't say that this time. They do tend the be high volume trading days as options and futures contracts expire and traders / investors are forced to close certain positions on either the long or short side.
The S&P 500 (C-fund) opened down sharply but greatly improved into the close. I think I about covered this chart above, but this one does show the key support near 3340 - 3345, but it also shows three different support lines breaking this month, so we certainly have some warning signs.
The DWCPF (S-fund) shows a couple of support lines breaking and the blue line, once broken, acted as resistance. The 50-day EMA is holding here as well so far.
The Dow Transportation Index closed flat yesterday, which is quite a feat considering the damage done to the broader market. It's now just 3 points from its all time closing high.
The EFA (I-fund) continues to trade between that flat top and the old resistance line that is now acting as support. I still think this looks primed for a breakout, but so far the bulls have been unable to make it happen after a month of trying.
The retail sector had an awful day yesterday as its bear flag broke down, and that may not be the best sign for the rest of the market. It did close near the highs of the day, but now that it's below the 50-day EMA and the bear flag, those areas could act as resistance on any attempts to move back up.
BND (F-fund) had a repeat of Wednesday yesterday with an early push higher and a close closer to the lows of the day. It remains in that trading range and my best guess would be a coin flip as to which way it eventually breaks.
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