Morning Update: 10/10/2012

 

Very Nasty Day for the NDX

The stock market indices had a very nasty session today.

The day started out with gap down followed by backing and filling on the S&P 500, but the NDX just kept falling as Apple, Google, Amazon, etc., all got hit harder early. The tumbling dissipated just before noon, and throughout the next few hours they formed bear wedges and coils. They rolled over in the afternoon with the Nasdaq 100 taking out the lows slightly, and the Dow and S&P 500 closing near the session lows. The NDX held above the lows, but not by much, and closed down sharply as well.

Net on the day, the Dow was down 110.12, under 13,500 at 13,473.53. The S&P 500 was down 14.40 at 1441.48. The Nasdaq 100 was down 45.00 at 2741.92.

Advance-declines were more than 3 to 1 negative on New York Stock Exchange, and nearly 4 to 1 negative on Nasdaq. Up/down volume was 3 to 1 negative on New York, with total volume of 600 million shares. Nasdaq traded over 1.66 billion, and had a 7 to 1 negative volume ratio.

Stepping back and reviewing the hourly chart patterns, the indices came down very hard as the NDX dropped from 2785 down to nearly 2735, almost 50 points. They snapped back about 20 points, and then rolled over into the close to close down a nasty 45.00 today. The S&P 500 dropped from 1456 down to 1441, bounced, and then rolled over into the close, closing at the lows for the day.

It was a very bad day, with key support being pressed here after initial support was violated earlier in the day.

We are down pretty sharply after the last couple of sessions and are at key short-term support. Perhaps a little oversold. We could see it bounce tomorrow, but this could also accelerate lower and crack some key levels

Wednesday, October 10

Economics
07:00 MBA Mortgage Purchase Index
10:00 JOLTs Job Openings – prior 3664
10:00 Wholesale Inventories – consensus 0.4%, prior 0.7%
2:00 Fed’s Beige Book
11:00 Fed to sell $7b-$8b notes in 1 to 3-year range
11:30 US to sell 4-week bills
1:00 US to sell $21b in 10-year notes (reopening)
23:50 JPY Machine Tool Orders
10:00 Italy to sell bills
10:30 Germany to sell EU4b in 5-year notes
11:00 Germany to sell EU1.5b 10-year inflation linked bonds

Earnings
Before:
Costco (COST) EPS $1.31
Progressive (PGR) EPS 26c
After:
ADTran (ADTN) EPS 16c
OCZ Tech (OCZ) EPS -13c

There were no important economic releases on Tuesday. On Wednesday we will get the Fed’s Beige Book.

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