F.GEMS: MICROS to GO!...

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The Bottom Is Near

By Paul Cherney, S&P Market Analyst

NEW YORK, Oct. 18 (Standard & Poor's) - The excessive volume, extremely high put-call ratios, excessive levels in the VIX (a double top at 36.74 exactly) suggest that if today wasn't the bottom then it is within only a few trade days.

In a market which is in a well-defined uptrend (which these markets are not), an excessive P/C ratio can coincide with the bottom, to the exact day of the bottom, but once the markets have gone into a prolonged decline it can take an excessive P/C ratio and several trade days of nervous, frenetic flip-flopping market action before a more sustained uptrend can unfold. Downside risk appears limited.

Immediate NASDAQ resistance is 3212-3258 but the real break-point higher which should bring in the sideline observers would be a move above the 3348.61 level which is accompanied by an expansion in volume. Immediate NASDAQ support is 3121-3026 with a focus of support 3121-3093.