While markets look perhaps somewhat calmer today, the midday analysis still indicates the S&P will reach the 200 day moving average either later today or more likely early next week.
New York Stats:
Volume is well above average at 3 billion shares traded but it is also triple witching today so volumes will be a lot higher this afternoon.
New 52 week lows are at 434 while new highs are just 6. This is very bearish but also indicative of an oversold market.
Volume is heavily to the downside at 80%.
70% of all stocks are falling on New York.
NASDAQ Stats
Volume is also heavy on the NASDAQ at 3.5 billion shares to the end of the lunch hour.
New 52 week lows are an astounding 1,160 which is extremely bearish.
New 52 week highs are just 17.
77% of all volume is moving lower.
68% of all stocks are continuing to fall.
Outlook:
Outlook remains very bearish but with new lows at very high numbers, the markets are oversold to the point where a bounce should be expected that could be strong enough to last more than several hours, but perhaps a couple of days.
Next week we could get some soothing words from the Fed to try to calm the markets. Meanwhile an invasion of Ukraine by Russia would add further negative sentiment and push markets lower.
The NASDAQ is already down 14% and could slide to 18% to 20% before a bottom appears.
The S&P is down 7.6% and a drop of 10% would not be unusual before a bottom is built.
TSX Composite Index – Canadian Stock Market Outlook
For those who follow the smaller Canadian Market, the TSX is down 328 points for the worst one day pullback since November 30. It is back to 20,730. The index has continued to hold up better than the bigger USA markets. Often we see the TSX fall deeply when the USA markets are nearing a bottom in a major sell-off, so today’s decline in the TSX could be a good signal for the bulls.
Volume is high at 270 million shares traded out of the lunch hour. Of volume 94% is to the downside which is staggering.
74% of stocks are falling which is one of the worst days since November 30.
The outlook is still bearish although many fund managers are eager to get more capital into Canadian Bank stocks. That should help deter any major collapse of the Canadian market.
Summary
The outlook is very negative for indexes at present. Work toward preserving capital and close trades that are profitable or even those at break-even to keep capital freed up for when the market bounces back. The afternoon could still see a rally attempt but at 2:00 PM or 3:00 PM watch for heavier selling to enter the markets. The SPX will reach the 200 day moving average in my opinion either later today or more likely at the start of next week.
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