Market Continue to Tumble

Market Continue to Tumble

(Note: Unless otherwise stated, the index action described below relates to the EMini futures contracts for the respective indices. Actual index action may differ slightly in terms of pattern formation, although the market bias will remain the same.)


Good day! The market continued to push lower into the weekend on Friday with selling particularly heavy once again in the tech stocks. Apple (AAPL) and Microsoft (MSFT) both felt considerable strain and held down the Nasdaq. AAPL has been struck with the "sell the news" bug after its new iPad announcement and, while good, MSFT's earnings were apparently not good enough to excite investors. Materials and energy shares also felt the pressure. Crude oil closed lower at $72.89 a barrel and is down 8.2% ytd.

The market's selloff resumed despite several pieces of decent economic data. The gross domestic product grew 5.7% last quarter, January's Chicago PMI climbed to 61.5, and consumer confidence hit a new two-year high of 74.4. The dollar reacted favorably, hitting new highs for the year, while gold slipped to $1,083.80 an ounce.

Dow Jones Industrial Average ($DJI)


Despite the losses, the market has been establishing some really nice intraday trends over the past couple of weeks. The indices had been narrowly traded and choppy at the start of the new year, but since then the intraday action has widened and the follow-through has been more straight-forward.

Friday's session kicked off with a mild upside gap that was followed by two waves of upside before the channel from Thursday afternoon broke lower to trigger a late-morning reversal. The volume picked up nicely to confirm the move and the indices sold off steadily into noon before hitting support from previous 15 minute lows. A solid continuation pattern then formed along the lows with two waves of correction off the support before the downtrend resumed into 13:30 ET. The selloff that followed established an equal move compared to the morning's descent, which served as support going into the final hour of trade.

S&P 500 ($SPX)


The Dow Jones Industrial Average ($DJI) ended the session on Friday at 10,067.33 with a loss of 53.13 points, or 0.53%. Home Depot (HD) was the Dow's best-performer. It rose 2.45%, followed by a 1.56% gain in Wal-mart (WMT), and a 0.90% gain in DuPont (DD). The Dow's worst-performers were Microsoft (MSFT) (-3.36%), Boeing (BA) (-3.13%), and Intel (INTC) (-2.61%).

The S&P 500 ($SPX) fell 10.66 points, or 0.98%, and closed at 1,073.87. Tenet Healthcare Corp. (THC) was the best-performer in the S&P 500, rising 7.36% in Friday's session. It was followed by a 3.39% gain in Peoples United Financial (PBCT), a 2.97% gain in Bard C R Inc. (BCR), and a 2.47% gain in Citigroup (C). Avery Dennison (AVY) was the worst-performer with a loss of 14.67%, while Sandisk (SNDK) fell 11.67%, and Airgas Inc. (ARG) fell 9.76%,

The Nasdaq Composite ($COMPX) fell 31.65 points, or 1.45%, and it closed at 2,147.35 on Friday. Urban Outfitters (URBN) was the Nasdaq-100's best performer. It rose 3.44%. It's worst-performer was Seagate Technology (STX) (-8.99%).

Nasdaq Composite ($COMPX)


January was the worst month the market has seen since it reversed course last March. The indices pushed through their 100 day simple moving averages last week, leaving them with more room for further downside during this week. It's likely to be a daytraders market though since we should start to see greater day to day overlap start to sneak in once again to make follow through from one session into the next more difficult for the overall market.