While the Nasdaq sold off more sharply than did the S&P and Dow earlier in the year, the breakdown underway in the Nasdaq at this point bears close watching given that the Dow Transports have been under heavy pressure of late. Within the Nasdaq, big names leading the way lower in recent weeks include: Apple (recently breaking through its 50 dma), Google (breaking down following a head and shoulders top) and Ebay (falling apart following a break below its 200 day moving average). If those examples aren't shabby enough, behold... Gilead's chart... Yikes, it has Sominex written all over it:
So more reasons to be cautious going into the New Year. Whether it's 2005 all over again and the markets slump and dump right away in '07, or the topping out process results in one more blow off rally and the process takes us into February is anyone's guess. But it does appear as if the winds are shifting and we're now getting a whiff from the direction the bulls have been grazing in.... potent aroma.