Stock Market Technical Analysis Blog
click on image to enlarge
In the market today we had a big gap down as the channel push downs I focused on yesterday followed through. The drop was amplified by Syria worries. This really isn't a fluke though because as the market enters its middle stage of a correction it becomes very sensitive to any bad news that hit the headlines. Currently there is a list of worrying situations that will probably take turns appearing in the daily headlines:
- deteriorating breadth and other market internals
- worsening economy because of consumers pulling back exemplified by the dire outlooks in the Walmart, Target, and Macys earnings reports
- new home sales plummeting because of the spike in interest rates
- worries about the Syria situation
- the approaching debt ceiling fight
- worries of tapering beginning in the fall
- sudden rush to gold instead of equities
- AAPL finding resistance at the 500 level when earlier in the year this level was a support
- heightened fear of a flash crash because of HFT reaching the 75% level
The stock market's heightened sensitivity to bad news is one of the biggest reasons to get out of stocks immediately when the VIX gets to the 12.00 level, as I called out on my 8/2 blog, thereby, preventing yourself from exposure to anything the news media decides to put in the headlines that day.
Trade well my friends
Alan
