stock-market-outlook-intraday-midday

Selling continued this morning and pressured the SPX down to 4315.

Next support level is at 4300. The drop this morning marked a 3.3% decline from the high of 4465 on Sep 23. That was the highest point of the last rally. From the all-time high of 4545 set September 2, the SPX is now down 230 points for a drop of 5% or exactly a typical drop in a bull market.

From the low today of 4315 the 200 day moving average is still about 185 points lower to 4130 for another 4.2% decline. From the all-time high of September 2, this would be a decline of 9.1% or not quite 10%. Whether the index stumbles lower, will depend on the 10 year Treasury and a number of reports, not the least of which is inflation and the September unemployment report due out Friday Oct 8.

The drop this morning was on lower than usual volume on both New York and the NASDAQ.

On New York 63% of all volume is to the downside and 61% of all stocks are falling. There were still 57 new 52 week highs and 81 new 52 week lows.

On The NASDAQ down volume was just 31% but there are 163 new 52 week lows. 50% of all stocks on the NASDAQ were falling this morning.

Outlook:

The numbers are not pointing to this being a pivotal day for a rebound back up but stocks are oversold. There is no panic selling however and the VIX is up just slightly at $24. A bounce in the afternoon should be expected and then probably further selling back down late in the day, similar to yesterday’s final half hour.
Investors are taking a wait and see approach at present and a lot of cash is sitting on the sidelines ready to pounce on any signal that the selling will stop, even if for just a few days. Bears are out but bulls are everywhere. Making a list of deeply undersold stocks is suggested to be ready for a bounce probably early next week.


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