Stock Market Viewpoint

Stock Market Viewpoint
Reading the Tea Leaves...

Thursday, August 22, 2013

That was close...

Stock Market Technical Analysis Blog

click on image to enlarge

In the market today we had the Nasdaq system shut down for three hours.  Feel free to search the web as there are about twenty different explanations for what might have happened.  We will call the following explanation number twenty-one.  

The QQQ (Nasdaq 100 ETF, daily chart 1), which has been the strength leader in slowing this correction, had its red 5 EMA line cross down thru its blue 20 EMA line a few days ago with the red 5 line turning back upwards in the past two days and finding resistance at the underside of the blue 20 EMA line about 11:15am today.  This setup is the pivot point where a powerplay starts to the downside causing a big swoosh lower in the market as happened to Panera Bread (daily chart 2) with brown arrows showing the corresponding points in chart 1 (QQQ).  

Right at that moment, the TNX (10 yr Treasury Yield, intraday chart 3) popped up to 2.91 (I mentioned in my 8/20/13 blog that huge stock market sell programs are widely known to be set up to go active at 2.90 with the selling to be begin at 2.91).  Right at the moment that TNX hit 2.91 big sell programs kicked in, first taking AAPL (most widely held stock) down sharply in the minutes following (shown in intraday chart 4 above).  Minutes after that quotes started going haywire and a few minutes later, the Nasdaq system shut down stopping trading in all Nasdaq listed stocks.  Three hours later, shortly before the bell, the market reopened and climbed higher (really?).

For whatever reason the market was shut down, the timing of it was very fortunate as the day 5/20 powerplay to the downside was kicking in and it was quite possible the market could have closed down a staggering amount today.  

Trade well my friends


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