The major US stock indices are still up on the week…
The broader S&P and Nasdaq indices are both down over 2.2% on the day. The S&P is down -2.22%. The Nasdaq is down -2.85% That’s horrible.
However, both indices
Indices
Stock market indices represents an index that measures a particular stock market or a segment of the stock market. These instruments are important investors as they help compare current price levels with past prices to calculate market performance.The main two parameters for indices are that they are both investable and transparent. For example, investors can invest in a stock market index by buying an index fund, which is structured as either a mutual fund or an exchange-traded fund, and track an index. The difference between an index fund’s performance and the index, if any, is called tracking error. Most major countries boast multiple indices. Commonly traded indices include the S&P 500, NASDAQ-100, Dow Jones Industrial Average (DIJA), EURO STOXX 50, Hang Seng Index, and many more.Stock market indices can be characterized or segmented by the index coverage set of stocks. The overall coverage of an index constitutes an underlying group of stocks, most commonly grouped together by underlying investor demand.How to Trade IndicesRetail brokers offer indices exposure through the use of contracts-for-difference (CFDs) or exchange-traded funds (ETFs). Each are popular ways to trade specific markets and are almost always on offer at most brokers.Investors can choose between multiple types of indices that traditionally fall within several categories. This includes country coverage, regional coverage, global coverage, exchange-based coverage, and sector-based coverage.All indices are ultimately weighted in a number of different ways. The most common mechanisms include market-capitalization weighting, free-float adjusted market capitalization weighting, volatility weighting, price weighting, and others.
Stock market indices represents an index that measures a particular stock market or a segment of the stock market. These instruments are important investors as they help compare current price levels with past prices to calculate market performance.The main two parameters for indices are that they are both investable and transparent. For example, investors can invest in a stock market index by buying an index fund, which is structured as either a mutual fund or an exchange-traded fund, and track an index. The difference between an index fund’s performance and the index, if any, is called tracking error. Most major countries boast multiple indices. Commonly traded indices include the S&P 500, NASDAQ-100, Dow Jones Industrial Average (DIJA), EURO STOXX 50, Hang Seng Index, and many more.Stock market indices can be characterized or segmented by the index coverage set of stocks. The overall coverage of an index constitutes an underlying group of stocks, most commonly grouped together by underlying investor demand.How to Trade IndicesRetail brokers offer indices exposure through the use of contracts-for-difference (CFDs) or exchange-traded funds (ETFs). Each are popular ways to trade specific markets and are almost always on offer at most brokers.Investors can choose between multiple types of indices that traditionally fall within several categories. This includes country coverage, regional coverage, global coverage, exchange-based coverage, and sector-based coverage.All indices are ultimately weighted in a number of different ways. The most common mechanisms include market-capitalization weighting, free-float adjusted market capitalization weighting, volatility weighting, price weighting, and others. Read this Term still remain up on the week.
Yahoo! Yippee! What a great starrt to October.
A week ago the NASDAQ index and the S&P index both closed just off there lows for the day and the lowest levels for the year. The S&P closed just below its 200 week MA. The Nasdaq closed below its 200 week MA for the 2nd week in a row. It was the month end/quarter end and September is a seasonally bad month for stocks. It was indeed a bad month.
This week, the indices squeezed higher on Monday (the month got off to a great start). On Tuesday they added to the gains. Yesterday’s intraday high took the Nasdaq up 6.22% from the Friday close, but sold off into the close. The closing level was still up 4.74%. Not bad, but is it?
Today more has been lost and the index is now up just 1.43%.
For the S&P it moved up 6.22% from the close to the intraday high on Wednesday. It is now up 2.25%.
There is time left in the day, but the when they close the books on week #1 of October, it will likely still show a gain for the week for both broad stock measures. The S&P might even rise by more than 2%. Not bad.
But is it? Underneath the price action shows a dead cat bounce.
Technically speaking:
For the Nasdaq
NASDAQ
The Nasdaq Stock Market or NASDAQ is an American stock exchange. It trails only the New York Stock Exchange (NYSE) in market capitalization and is part of a network of stock markets and options exchanges.Launched back in 1971, NASDAQ is the acronym for the National Association of Securities Dealers Automated Quotations. Since then it is known simply as NASDAQ and has become one of the most influential exchanges worldwide.The NASDAQ was the world’s first electronic stock market, and has since assumed the majority of major trades that had been executed by the over-the-counter (OTC) system of trading.What Makes Up the NASDAQ?In particular, the exchange also features the NASDAQ Composite, which includes almost all stocks listed on the NASDAQ stock market. Along with the Dow Jones Industrial Average (DIJA) and S&P 500 Index, this is one of the three most-followed stock market indices in the United States.Overall, the NASDAQ stock market has three different market tiers. This includes the Capital Market, or an equity market for companies that have relatively small levels of market capitalization. The listing requirements for small cap companies are less stringent than for other Nasdaq markets that list larger companies with significantly higher market capitalization.Additionally, the Global Market is made up of stocks that represent the Nasdaq Global Market. The Global Market consists of 1,450 stocks that meet the exchange’s financial and liquidity requirements, and corporate governance standards.Finally, the Global Select Market is a market capitalization-weighted index made up of 1,200 US-based and international stocks that represent the Global Select Market Composite.
The Nasdaq Stock Market or NASDAQ is an American stock exchange. It trails only the New York Stock Exchange (NYSE) in market capitalization and is part of a network of stock markets and options exchanges.Launched back in 1971, NASDAQ is the acronym for the National Association of Securities Dealers Automated Quotations. Since then it is known simply as NASDAQ and has become one of the most influential exchanges worldwide.The NASDAQ was the world’s first electronic stock market, and has since assumed the majority of major trades that had been executed by the over-the-counter (OTC) system of trading.What Makes Up the NASDAQ?In particular, the exchange also features the NASDAQ Composite, which includes almost all stocks listed on the NASDAQ stock market. Along with the Dow Jones Industrial Average (DIJA) and S&P 500 Index, this is one of the three most-followed stock market indices in the United States.Overall, the NASDAQ stock market has three different market tiers. This includes the Capital Market, or an equity market for companies that have relatively small levels of market capitalization. The listing requirements for small cap companies are less stringent than for other Nasdaq markets that list larger companies with significantly higher market capitalization.Additionally, the Global Market is made up of stocks that represent the Nasdaq Global Market. The Global Market consists of 1,450 stocks that meet the exchange’s financial and liquidity requirements, and corporate governance standards.Finally, the Global Select Market is a market capitalization-weighted index made up of 1,200 US-based and international stocks that represent the Global Select Market Composite. Read this Term index, the price corrected to the 38.2% retracement of the move down from the September high near 11229.93 and stalled (see chart below). That was the minimum retracement to get to and through to give the buyers more confidence. That attempt failed.
Nasdaq stalls at the 38.2% of move down from the Sep high
For the S&P it fared a little better on it’s bounce. It DID get above the 38.2% from the September high at 3787.27 but fell well short of the 50% target at 3850.02. The close on Tuesday was right near the level. The “tries” above the retracements on Wednesday and Thursday still closed below the 38.2% retracement level. Once again the retracement was the minimum target given the trend move lower. The price could not sustain the breaks. Failure.
S&P index still up on the week but well off its highs
What about the 200 week MAs?
For the Nasdaq, I outlined the 11130 level as a key upside target for that index in my video from Monday’s trading (see video here). The price did extend above that 200 week MA level this week, but closed back below the level yesterday and is well below that MA level now. It will be the 3rd close below the 200 week MA which has not occurred since 2010.
For the S&P index, it’s 200 week moving average comes in at 3594.49. The current price is still above that level at 3661.64.
However, if the dead cat bounce seen this week has follow through selling next week, closing below that level for the 2nd time in 3 weeks is well within the sites for traders.
S&P index is still above its 200 week moving average
Stock buyers had there shot this week. Closing back above the 200 week MA would have been a good signal for the Nasdaq. Bouncing higher away from the 200 week MA on the S&P was also good news. However, the retracements fell woefully short of the upside targets and the price action today is not looking good for the price action. It is not looking good.
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