Wednesday, October 15, 2008

NASDAQ Technical Picture - Sharp Retracement

The markets had a lot of bad news to digest today including disappointing Retail Sales (-1.2% vs. consensus of -0.7%, X-auto -0.6% vs. consensus of -0.2%), core PPI (+0.4% vs. consensus +0.2%) and NY Empire manufacturing index (-24.6 vs. consensus of -10.0). In addition we had to listen to the Fed Chair and Beige Book headlines which only served to accelerate the selling into the close with the Nasdaq 100 and Nasdaq Comp setting new multi-year closing lows. It was a broad based sell-off with the worst performing sectors led by Steel -16%, Paper -16%, Coal -16%, Oil Service -15%, Natural Gas -14%, Oil -14%, Broker -11.6%, REITs -11%, Casino -11%, Rail -10%, Chemical -10%, Networking -9%, Clean Energy/Solar -9%. Futures sold off on EBAY earnings but have since stabilized in a narrow range. The only good thing I can say is that sellers are getting a little weary as volume contracted on today's swoon.

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