Weakness Continues

A plunge like Wednesday should be followed by a better bounce than we have seen. But nobody seems willing to buy, which means that they are probably looking to sell bounces.

The risk indexes were sold pretty hard yet again today – the Russell 2000 -1.21% today and the NASDAQ -0.73% today.

This is the hourly of the S&P 500. The S&P 500 is now below all key moving averages. It has spent the last 2 days in a very narrow range right below the 50-day. This is a really bearish setup and I expect one of two things to occur – a nasty selloff or a nasty short squeeze. The potential is there for both.

Any hard selling early next week will have me looking for a bounce. I will not short a sharp gap down open on Monday. If there is a huge gap up open on Monday, it will be interesting to see if it is immediately sold.



Semiconductors are a critical group and they broke down from a multi-month trading range this week. Disk Drives look horrible and even closed below yesterday’s low today. Yuck. Semis and Disk Drives lead the markets. Financials and Retail are acting poorly as well.



Gold (GLD) has been sitting right above its 50-day (Black Line) for the past two days, in a narrow trading range. Like most everything else, Gold has a critical decision to make in the very near future.