Wall Street had everything going for it: a weakened hurricane that avoided the off-shore oil rigs, which subsequently saw oil prices sell-off almost a 10% from Friday’s close, combined with enthusiastic traders coming off an extended weekend. However, September lived up to its billing of being a dismal month for positive returns and retreated throughout the entire day.
This is NOT the kind of action that the bulls were hoping for in order to continue the rally that started in mid-July and has since become rather stagnant after reaching its highs in mid-August. While no major technical damage has been done to the charts we are trading off of (below), the S&P continues to channel in a narrow trend, and the Nasdaq is trading much lower than its August highs.
The markets saw a huge influx of shares being traded today, which favors the bears, and should this trend persist, we could see the Nasdaq’s steep upward trend fail, and the S&P break through major support levels. This hasn’t happened yet, but a major sell off Wednesday or Thursday could do the job. Stay Tuned!
Here’s the Nasdaq and S&P charts…