Morning Update: 9/26/2012

The stock market indices suffered steep-rollover losses and closed at the session lows, breaking key support today. The top may be in, so we have to see what kind of follow-through we get. It certainly wasn’t a pretty day today. The session lows were right at the close, and the indices spiked down to them, after trying a late rally.

The day started out, however, with a little gap up, followed by a pullback that held support, and then a new rally to snapback highs at nearly 2859 NDX. The S&P 500 just got up to 1463. They were right up to key resistance, though, and then they backed off. But when they broke the 2-day rising trendline, they accelerated midday, consolidated early afternoon, and then rolled over hard, bouncing the last hour to initial resistance, failing there, and rolling over very hard into the close.

Net on the day, the Dow was down 101.37 at 13,457.55, about 175 points off the high. The S&P 500 was down 15.30 at 1441.86, 22 points off the high. The Nasdaq 100 was down 39.45 at 2804.53, 54 points off its high.

Today was a very big, negative afternoon reversal day.

Advance-declines were a little less than 3 to 1 negative on theNew York Stock Exchange, and 3 to 1 negative on Nasdaq. Up/down volume was 8 to 1 negative on New York, with total volume of 1 billion shares. Nasdaq traded over 1.95 billion shares, and had a 5 to 1 negative volume ratio.

Increasing volume on the down side today is a very bad sign for the bulls.

Wednesday, September 26

07:00 MBA Mortgage Purchase Index
10:00 New Home Sales – consensus 380K, prior 372K
11:00 Fed to buy $4.25b-$5b notes in 6 to 8-year range
1:00 US to sell $35b in 5-year notes
12:00 EUR German CPI
10:30 Germany to sell EU5b in 10-year notes


No major earnings

The Case Shiller home price index rose 0.4%, less than the expected 0.9%. Consumer confidence came in at 70.3, better than last month’s 61.3. On Wednesday we will get oil inventories and new home sales.


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