9:00am (EST)
The bears went to work after our midday update as the market reversed course and ended significantly lower. The bulls pushed near-term resistance in the morning but the rally had started to fade once Wall Street got back from its lunch break. The dip below key levels of support flushed out a few traders and more joined the fray once the final hour of trading hit.
The Dow dropped 101 points, or 0.75%, to settle at 13,457. The blue-chips went out on their low and the break below 13,500 opens the door for a retest of 13,350. The bulls managed a brief trip past resistance, reaching 13,620, but they were unable to hold the gains which resulted in a 163-point swing.
The S&P 500 fell 15 points, or 1.1%, to close at 1,441. The index traded to a high of 1,463 but also went out at its low for the session. The bears triggered 1,450 with an hour left in the session and once this level gave way, the selling pressure picked up. The next level of support is at 1,425 and a break below the second layer of support could get 1,400 in play.
The Nasdaq declined 43 points, or 1.4%, to end at 3,117. Tech touched a high of 3,176 and a close above 3,175 would have been bullish. Instead, the bulls failed to hold 3,150 which could lead to a test of 3,050 if 3,100 is busted.
The Russell 2000 gave back 12 points, or 1.5%, to finish at 839. The drop below 850 could lead to a back test down to 820. The S&P Volatility Index ($VIX, 15.43, up 1.28) zoomed 9% and closed above 15 after reaching a peak of 15.72.
Yesterday’s close was bearish and we have listed some more put option candidates on our Watch List to play if the bears continue their attack. We have updated our current trades and we are showing some solid gains on our puts opti
Futures are showing a lower start to today’s session and look like this: Dow (-19); S&P 500 (-3); Nasdaq 100 (-9).
Subscribers, check the Members Area for the updates and stay ready after the open for possible action.