Stock Market: Major Shot Across the Bow

Ian WoodwardHGSI Blog, Ron Brown

As expected the poor Jobs Report on Friday took the Market down big time at the open, but there was a respectable Bounce Play from the lows.  However, it was not nearly enough to stem the tide and with the S&P 1500 losing another 2.5 Buckets to the downside on top of the 5.4 Buckets two days previously, the Bulls are hanging on with their finger nails.  This next week will tell:

Floodgates Picture

The knee jerk on Friday is obvious from the next Chart of the Market Indexes:

Floodgates Indexes

The Russell 2000 (RUT) has given up around 3% from its high and has shown its teeth with a drop of %B x BW to below Zero:

Floodgates RUT

The turbulence is evident from our next chart of the damage done to the S&P 1500 these past three days:

Floodgates Pat

I have picked up on a view which I introduced to you in my last Blog Note and hope you will use this to stay on top of the right side of the Market and to understand the shifting winds as we go into the next week using the HGSI software.  There is a lot on information at a glance with this view using the Major Market Indexes with the T1 view in Warehouse:

1.  We had 5 Indexes take a > -0.24 Hit on Friday, with the NASDAQ 100 going down over 4.25 buckets.

2.  We have two indexes, the NASDAQ and NDX, both below the lower Bollinger Band

3.  They ran for cover in the Transports and Utilities on Friday

Floodgates Indexes2

Now for a look at the top two canaries, one gasping and the other healthy…AAPL and GOOG, respectively:

Floodgates Canaries

AAPL’s performance has been worse than dismal and is down about 40% from its high.  Maybe it is finding its bottom, but sad to say with this recent performance it has given up its leadership to GOOG.  However, you must still follow it as its weight on the NASDAQ and NDX Indexes is so out of proportion compared to the rest of the stocks that its movement will influence these Indexes both ways:

Floodgates AAPL

Now, let’s look at GOOG which is behaving substantially better, with the Canary still sitting up and chirping…it is the leader now:

Floodgates GOOG

We shall see if the Floodgates open wide next week or the Bulls come charging back to produce another Fakey!!

Best Regards,

Ian