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Aug 11th, 2010: Update 2 – Morning

Posted by pugsma on August 11, 2010

12:10 pm EST:  The DOW-30 is the strongest of the 4 major US indices and it’s struggling to maintain support at the 200-day SMA level of 10436.

DOW-30 Daily Candles (12:02 pm):

10:15 am EST:  Nasdaq-100 daily candle chart is showing a very bearish island reversal pattern with the large gap up and now large gap down.  The pattern is named an island reversal, because the candles left behind from the gap up and back down form an island.   However it is holding support above the 50-day SMA of 1847, which is bullish for now.

Nasdaq-100 Daily Candle Chart (10:08 am):

10:06 am EST:  The Small Cap Russel-2000 daily candle chart is very bearish after today’s gap below all moving average levels of support.  The small caps certainly suffer the most as the risk trade is reduced.

Russel-2000 Daily Candles (9:58 am):

9:55 am EST:  SP-500 has hit 1097 already and is near the first target of 1093, where C=1.62A.   I had wave iii-C reaching this 1098 level and then a wave iv-C bounce to about 1105 before the wave v-C drop to between 1084 and 1093.

Looking at the Daily Candle Chart, you can see how technically damaging a sustained drop below the 50-day SMA of 1088 would be.  Already this morning the daily RSI has been driven into bear territory below 50, the daily MACD signal line is nearing a bear cross, the daily MACD histogram is going below zero into bear territory, and the Full STO has recieved a bear cross.

SP-500 Daily Candles (9:50 am):

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