I look at the Dow and S&P charts and see the same old pleasantries: the on going upward channel with the price action floating above an ever rising 50 day moving average. But that's the Dow and the S&P and certainly Friday's red line is a not so nice scar in the picture.
A few of the stocks that are always on my screens are Apple, Google and Microsoft and each have been looking ugly of late. The SOX is another one on my screen and that's been in terrible shape too. So all totaled, the Nasdaq (QQQQ) is once again below its 50 day moving average. Something's gotta give here. Brings back memories of the great Johnny Mercer...
When an irresistible force such as you
meets an old immovable object like me
you can bet as sure as you live
something's gotta give, something's gotta give,
something's gotta give.
They don't make lyrics like that any more and I always liked the way Sinatra sang it. But I digress. Something indeed has gotta give.
The above is a fun chart showing the S&P 500 ($SPX) in bars, the other thin black line is the Nasdaq Composite divided by the S&P 500 to demonstrate an important ratio that illustrates how the Nasdaq had led the S&P higher; now the Nasdaq is under performing. John Murphy at Stockcharts.com had reminded me to pull this one out and it's especially useful given my March put bet on Google that I initiated on Friday. Not only is GOOG below its 50 day, but so to AAPL and MSFT. John had also noted the relative strength of those three big names was far under performing the RSI of the Nasdaq itself and that's another indicator of problems for the overall 'daq'.
So I can't help but to expect, or wonder when the S&P 500 tests its 50 day - still a fairly far 16 points away down at 1422 in light of major Nasdaq names faltering and the SOX group remaining short circuited. There's also the issue of subprime and how much more of an impact that has on the market in the week ahead along with more economic data, etc. It's going to be an interesting week ahead and I'll have more of a preview, including a look at commodities where I've been actively trading, a little later.