Major market indexes cascaded lower into the end of the trading week after the NASDAQ Composite failed and reversed at its 50-day moving average earlier in the week. The S&P 500 Index ended the week below its 200-dma for the first time since March of this year. It now joins the Dow, the NYSE Composite, and the small-cap Russell 2000 indexes as it now plumbs lower lows below the 200-day line.
Many believe the market's woes are due to the current crisis in Israel as the IDF prepares to invade Gaza, but we might argue that it may more about interest rates, which continue to move higher. The Ten-Year Treasury Yield ($TNX) on Thursday hit a new 16-year high at 4.996%, levels not seen since mid-2007, well before the Great Financial Crisis in 2008. Despite backing down slightly on Friday, interest rates remain in a sharp uptrend, and this can be expected to maintain the pressure on stocks. The line of resistance remains to the downside.
Apple (AAPL) was first reported on as a short-sale entry along its 50-dma two Tuesdays ago on October 10th. Adobe Systems (ADBE) was also reported on as a short-sale on the same day but quickly pushed through 50-dma before anyone had a chance to short it. It then evolved into a double-top short-sale (DTSS) at the left-side peak at 569.98. On Friday, it broke below the 10-dma and is now finding support at the 20-dema. If that is broken then it would trigger yet another short-sale entry in ADBE using the 20-dema as a covering guide, while the 50-dma looms just below as another short-sale entry trigger if the stock breaks below the line.Meanwhile, AAPL has been shortable along the50-dma over the past four trading days and finally peeled away from the line on the downside on Friday as it looks set to test is 200-dma.
Agco (AGCO), Confluence (CFLT), MongoDB (MDB), Qualcomm (QCOM) and TJX Companies (TJX) were reported on as short-sale set-ups the next day, October 11th. AGCO was a short entry at the 50-dma at that time and has broken to lower closing lows in a straight drop from the 50-dma over the past week. CFLT was initially a short along the 50-dma and then the lower 20-dema before breaking for the 200-dma on Friday where it held support. MDB triggered a short-sale entry along the 50-dma on Friday and broke lower from there.QCOM was a short at 50-dma resistance as it was building a bear flag and on Friday finally came loose as it breaks to the downside. TJX was a stop-out at the 50-dma on Monday and rallied a bit further before reversing and again triggering a short entry at the 50-dma as it broke back below the line on Friday. This remains in short-sale entry position using the 50-dma as a covering guide.
Amazon.com (AMZN), Cisco Systems (CSCO), and Workday (WDAY) were reported on as short-sale set-ups on October 12th. At that time AMZN was a short entry at the 50-dma and has since broken lower, while CSCO was a short entry at its 20-dema. One "shake in" this past Monday took it just past the 20-dema before it reversed and triggered a proper short-sale entry at the 20-dema on Tuesday, Wednesday, and Thursday before breaking lower on Friday. On October 12th WDAY was a short entry at the 20-dema and followed the line lower since then. This past week it offered short-sellers at least two short entry opportunities along the underside of the 20-dema before breaking to lower lows on Friday.
The Market Direction Model (MDM) remains on a SELL signal.