It’s not time to push the panic button yet, but like I said in my last video we need to keep an eye on some key support areas here.
Looking at the SPY daily chart, it looks like we have support at the 105.00 to 104.50 area and, if we fail that level the next area of support is at the 101 to 100 level.
Now on the QQQQ daily chart, we failed the 43.86 level of support on 8/24/2010, and it looks like we have support at the 43.23 area and, if we fail that level the next area of support is at the 41.77 level.
Again we may see a bounce soon but, if we don’t hold those lower levels of support we may be in for a much bigger move to the downside.
Market Report: August 24, 2010
16:30 ET Dow -133.73 at 10040.68, Nasdaq -35.87 at 2123.76, S&P -15.49 at 1051.87
[BRIEFING.COM] Economic uncertainty has led stocks lower in four straight sessions for a cumulative loss of 3.9%. Paltry existing home sales figures for July only added ambiguity to the economic outlook.
The major equity averages opened trade with losses of about 1%. The opening slide reflected the weak action of markets overseas, where Germany's DAX dropped below its 200-day moving average for the first time in more than one month and Japan's Nikkei entered bear market territory. The Shanghai Composite mustered a modest gain, but it also near bear market territory.
Sellers intensified their efforts with the release of existing home sales figures for July. Sales plummeted 27% month-over-month to an annualized rate of 3.8 million units. Not only is that far below the 4.7 million units that had been expected, but the rate of decline and the actual sales level were the worst since records began in 1999.
Hope for a revival in housing was further dashed with news that the total supply of homes now stands at 12.5 months. That said, some believe a double dip in housing is likely.
Such pessimistic headlines sent the three major indices set fresh one-month intraday lows the Dow even briefly dropped below 10,000 but some near-term support helped stocks stem their losses.
Only defensive-oriented telecom stocks and utilities stocks staged gains. Both sectors advanced 0.3%.
The dollar had been strong in the early going, but concerns about the health of the U.S. economy undercut the currency. It was up 0.5% at its high and retreated into the red before finishing flat. Amid the dollar s downturn, the Japanese yen set a fresh 15-year high of 83.6 yen per dollar.
The dollar s drop and an interest in safety squeezed gold prices higher. The precious metal had been down more than 1% in early pit trade, but it settled with a 0.3% gain at $1233.40 per ounce.
In contrast, oil prices on October contracts fell 2.0% to close at $71.63 per barrel. In relation to the continuous contract, that s the lowest close since early June.
A strong bid for Treasuries drove yields to new annual lows, but Treasuries pulled back after stocks started to stem their losses.
Results from an auction of 2-year Notes did little to alter the preferences of participants. Both the auction s bid-to-cover ratio of 3.1 and its dollar demand of $115.4 billion were below averages of recent sessions.
Advancing Sectors: Utilities (+0.3%), Telecom (+0.3%)
Declining Sectors: Materials (-2.3%), Health Care (-2.0%), Industrials (-2.0%), Consumer Discretionary (-1.7%), Financials (-1.7%), Tech (-1.6%), Energy (-1.4%), Consumer Staples (-0.3%)
Nasdaq -35.87 at 2123.76... S&P Midcap 400 -1.6... NYSE Adv/Dec 730/2286... Nasdaq Adv/Dec 670/1965.
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