AheadoftheNews.com

NYSE advance/decline line has hit two days this week of extreme selling versus buying, in fact levels I cannot find as far back as my Qchart goes for such an indicator, which is about mid 2000.
I noted earlier SPX major support levels below the July lows. They were 1157 and 1130. We closed right at the first one. Trading this will be relatively simple, since resistance will be the July lows at 1168.20. The note on the ten year was also discussed earlier with emphasis on the 3.325% level, which turned out to be pretty much the low of the session. But bonds is not where most of the money fled, it was to oil and especially gold. That is troubling, because now we have multiple frames of reference to deal with in terms of outflows and inflows. Of course, if you diversified and bought gold on Monday, as charts suggested, you are weathering this mess a little better. The entire option expiration week calculations have been thrown out the window by news events and what appears to be hedge funds pushing us into a "black swan" event. This is something a few of those very large funds have been dreaming about for some time in the hopes of making a killing. What better time to hit the gas when you are in option expiration week loaded with puts and really bad news hits. The ensuing delta hedging is like jet fuel poured on an already blazing fire.

I'm noting a few interesting facts. XLF (financials) did not make a new low today, if you count the pre-open hit yesterday of 18. Today's low was 18.11. In fact, XLF is still above the July lows (16.77). The group really pushing new 2008 lows this month is the semiconductor. SMH (semiconductor ETF), is only within a few points of a 76.4% retrace of the entire bull market (chart). This is an extraordinary event. I noted over the weekend support at 24.50, but I would not be surprised to see 24.04 tomorrow. Will this be the end of the slaughter? No one knows. But with the Q's approaching 40 and the COMP right at the August 2006 gap, some bargain buying should start taking place. The TED spread has now exceeded the crash of 1987 record.

By the way, not that I want to scare anyone, the August 2006 gap for QQQQ at 37.76 is still open...Maybe not this week, maybe not next month, but it is now back on the radar.

Note: Blogger is giving me chart upload problems today. I can't wait for the new site which will feature much more reliable uploads and of course live trading. We are behind schedule, but lots of care is being taken to not lose Google search presence when transferring years of posting. Thank you for your patience.