RETAILERS AND TECHS PULL MARKET LOWER -- YAHOO LEADS INTERNET DROP -- NASDAQ FALLS FURTHER UNDER 200-DAY LINE -- GOLD AND OIL CLIMB AGAIN
YAHOO PULLS NASDAQ LOWER... The technology sector got battered again. The most prominent casualty was Yahoo which tumbled more than 7% to get the day off to a weak start. Chart 1 shows Yahoo gapping down to its 50-day average on massive volume. That made Internet stocks the day's biggest technology losers. Weakness in technology hurt the Nasdaq market, which pulled the rest of the market lower along with it.
Chart 1
INTERNET INDEX BREAKS 50-DAY LINE... Chart 2 shows the Interactive Week Internet Index having failed a challenge of its January high last week. Today's selling pushed the IIX below its June low and its 50-day moving average. The relative strength line, which had been rising since early May, is starting to fall. Instead of pulling the Nasdaq higher, Internet stocks are now pulling it lower.
Chart 2
NASDAQ FALLS FURTHER UNDER 200-DAY AVERAGE... The Nasdaq market led today's selling. The Nasdaq Composite Index fell further under its 200-day average. The Nasdaq 100 closed below that long-term support line as well (Chart 4). The Dow Industrials closed right at their 200-day average.
Chart 3
Chart 4
RETAIL LOSERS... Retail stocks also got hurt today. Big Lots fell below its May trough on heavy volume. TJX did the same and also broke its 200 day average. Not good.
Chart 5
Chart 6
RISING GOLD PUSHES NEWMONT HIGHER... Gold prices rrose $5 to $408 which is a new three-month high. That boosted gold stocks. Newmont Mining reached 42 for the first time in three months and is nearing a challenge of its 200 day line. Oil prices closed over $40 today, which boosted energy stocks but weighed on the rest of the market. The stock market doesn't like oil prices over $40. Tomorrow will be an important day. That's because Friday closes determine what sort of damage is done to weekly charts, which helps determine major trend changes. Unless the market can stage a Friday rebound, the daily and weekly charts will have taken a turn for the worst.
Chart 7
