The Nasdaq Composite (COMP – 3882.5) is now knocking on the door of its 50-day moving average (as defined by its 10-unit weekly moving average) amid today’s 4.5-percent drop. A break of this moving average on a weekly basis would mark the first such close since October 15, when the COMP was just about 1,000 points lower.<
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As January comes to a close without any major global hitches related to the much maligned Y2K rollover, investors are probably not entirely happy with the January hangover that has lingered with equities. With the S&P 500 Index (SPX - 1365.98) down 4.05 percent and the Nasdaq Composite (COMP - 3880.7) down 3.12 percent in the past month, the sector indices have seen mixed activity with 10 of 27 indices in positive territory over that time. The following are the top four performing indices over the last 30 days excluding today: the AMEX Biotechnology Index (BTK - 425.07), up 13.48 percent; the PHLX Semiconductor Index (SOX - 748.6), up 11.39 percent; the Morgan Stanley Healthcare Providers Index (RXH - 179.29), up 9.35 percent; and the AMEX Natural Gas Index (XNG - 134.03), up 6.67 percent.

The four indices showing the most weakness in the last 30 days excluding today are: the AMEX Airline Index (XAL - 129.92), down 14.91 percent; the PHLX Forest and Paper Products Index (FPP - 330.65), down 12.09 percent; the Morgan Stanley Commodity Related Equities Index (CRX - 181.07), down 6.13 percent; and the AMEX Oil and Gas Index (XOI - 462.11), down 5.83 percent.

The airline sector has been is noteworthy for the very optimistic configuration of the group’s open interest. The Schaeffer's put/call open interest ratio put/call open interest ratio for the airline group is lower than 96 percent of such readings over the past year with about two calls for every put (taken from Schaeffer's Daily Sentiment).<
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The CBOE Market Volatility Index (VIX – 28.55) is spiking higher today amid the sharp downdraft in equities. It will be telling if this fear barometer can penetrate the 30 level. Moves up to the 30 level have been associated with short-term bottoms in equities with eerie regularity in the past year. A VIX rally to 30 signaled a turning point was not far off in early August, late September, mid-October, and early January. Albeit, this is certainly not the holy grail, but the regularity of the relationship bears noting.<
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Nextel Communications (NXTL - 106-15/16) is holding at the support of both its 20-day and 10-week moving averages in today's broad sell-off. The stock has been technically solid, rallying 135 percent from the early August test of its 10-week trendline, which has contained all but one weekly close since then. NTXL's solid performance has occurred amid investor skepticism. Schaeffer's put/call open interest ratio (SOIR) for the security is currently higher than 88 percent of all readings taken over the past month. (For more information on SOIR, please visit Schaeffer's Daily Sentiment) In addition, short-interest players have been piling on the bearish wagers. Between December 15 and January 15, short interest on NXTL rose by 10.5 percent to reach 27.2 million shares, which is its highest level ever and represents the eighth largest number of shorted shares on the Nasdaq. With a short-interest ratio of six times the stock's average daily volume, a short-covering rally could emerge if the equity pushes higher off its double-barreled support.
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The mood on Wall Street has become decisively less positive in the last few hours as is evident by the internal readings. The S&P 500 Index (SPX - 1376.11) is lower by 1.61 percent. Currently, there are 1,006 advancing issues versus 1,945 declining issues. Up volume of 245,054,976 shares is lagging down volume of 488,067,232 shares. New highs of 15 are behind new lows of 136.

The Nasdaq Composite (COMP - 3923.4) is lower by 2.87 percent in a dismal day. There are 1,235 stocks advancing and 2,749 declining. Up volume of 332,471,616 shares is behind declining volume of 812,575,616 shares. New highs of 80 are ahead of new lows of 78.<
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