January 18, 2008
Probably worse then a 200-point drop in the market, would have to be what we saw, and continue to see in the market over the past week. The market opened and rallied over 1% – undoubtedly, a very positive beginning to what has otherwise been a very difficult month for many investors. However, those gains could not hold, and by lunch time all the major indexes were trading in the red.
The bears are showing themselves as having full control of this market, and they will not let the bulls have even a single day in the sun – so it seems. Intraday rallies are opportunities for the bears to reload their short positions before sending the market lower, which clearly signals to us that the buying power is weak at best, and cannot put forth the type of buying effort necessary, to ward off another sell-off, even on an intraday basis. Therefore, until we can see the bulls fight off the aggressive bears in this market, and give us a string of successive high-volume days in the green, don’t look for the market to recover anytime soon.
A reminder, that the market is closed on Monday, in observance of Martin Luther King Day.
Let’s review the charts…
While opening very strong after a hard sell-off the previous day, the NASDAQ was unable to hold its gains from the early morning. As a result, the index relinquished its gains and closed slightly in the red.
The S&P continues to show incredible weakness, and is in complete free-fall mode. Any attempt by the bulls to bounce off of oversold conditions, is pounced upon by the bears.
