Schaeffer's Trading Floor Blog

Final Figures

by 3/9/2005 4:51 PM
Stocks quoted in this article:

With "forgotten" posts out of the way, we can turn our attention to the day's action...

Index Index Value Point Change Percent Change
S&P 500 (SPX) 1207.0 -12.4 points -1.02 percent
Dow Jones Industrial Average (DJIA) 10805.6 -107 points -1.0 percent
Nasdaq Composite (COMP) 2061.3 -12.3 points -0.59 percent
Russell 2000 (RUT) 631.1 -6.9 points -1.08 percent
CBOE Market Volatility Index (VXO) 12.59 0.64 points 5.4 percent

Which was dominated by selling. The COMP suffered the least, but has also been the weakest index in terms of the recent rally.

Overall we see that only networkers, crude oil, and gold stocks showed gains. But while oil stayed positive, oil stocks sold off sharply. The XOI showed the largest loss from this list as the index closed below its 10-day moving average for the first time since mid-January.

A number of themes could be discussed based on today's action, but I want to sleep on these to try and sort things out. Overall, what stood out to me today was the tenacity of the selling. It seemed as if there was a lot pressure that just didn't let up...

As you can guess, today's action did little to change to the QQQQ and SMH charts we have been watching as they remain in a holding pattern below resistance. The SPX chart broke through the support I noted this morning and that is where I will pick up tomorrow morning...

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Oops

by 3/9/2005 4:22 PM
Stocks quoted in this article:

File this under the "I can't believe I did that" category...but the post below about "catalysts" was something I typed up very earlier this morning and thought for sure that I had posted it. I just reviewed the day's posts and noticed it wasn't on the site!

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Catalyst versus Excuse

by 3/9/2005 4:19 PM
Stocks quoted in this article:

For more than a month, I have had a reminder note on my desk that simply reads - "catalyst versus excuse" - and it was supposed to be a reminder to myself to discuss this topic.

However, like many things on my "to do" list, I never quite get around to it so I want to take a quick stab at the topic now and follow-up later if needed. As always, my intent is to give you a better understanding of how I view things - not because it is the "correct way" but because it will allow you (hopefully) to better use this space and understand its limitations (should you not agree)...

The short explanation of this topic is summed up in the excerpt below from an old post...

    ...I think it is important to differentiate between "after the fact explanations" and legitimate catalysts...Sometimes you never know the "why"...

On some days, you see an obvious "event" that causes the buy/sell equilibrium to get skewed and I think everyone is has seen these. It is the day when you see a surprisingly strong/weak economic report or comments from a bellwether company that has sector wide implications. There is the event that everyone "sees" and then the reaction. On some of those days the reaction may seem "out of line" and I tried to address that in my "why" link above - but keep in mind - while the magnitude of the reaction may seem out of line, the catalyst was "seen" by everyone.

The scenario above is what I call the "catalyst "...The "excuses" or "reason" days where the market (or stock or sector) is up/down but there is no immediate news. A look at the intraday may show a small initial move but what stands out is the general trend up or down. It is on those days that I think there is a tendency to look back and assign a reason. As humans we seem to have a certain need for explanations. We like to "know" why things happen. But in the market we don't always get that luxury, but it doesn't stop us from trying anyway....


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Into the Close

by 3/9/2005 4:16 PM
Stocks quoted in this article:

Since we followed it all day long, I thought I should show how the SPX "closed"...


Chart Courtesy of Thomson/ILX

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More Selling

by 3/9/2005 3:20 PM
Stocks quoted in this article:

We enter the final 45 minutes of trading with no let up from the bears...


Chart Courtesy of Thomson/ILX

...as NYSE net ticks push past -1000 and the SPX makes another new low for the session...

I am hard pressed to remember a day when we have sees net ticks be so active on my downside alert. I would consider this a sign of underlying selling pressure...

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