*** TA Updtate: 10/22/2008 1:49:28 AM
Tuesday's action was disappointing for longs on the heels of Monday's sharp rally and positive technical signs, e.g. McClellan Oscillator/Summation Index.
The NYSE and Nas internals were negative and the majority of stocks closed near their LOD.
The Spx fell to a level where it isn't far away from 943 support, and could breach that Wednesday morning in a follow-through to the downside from Tuesday's closing action.
While profit-taking was expected Tuesday morning, the market could not muster up a late rally, so it is important for strength to come on Wednesday sometime, or else the Summation Index will turn down again.
One thing that was negative for the Monday rally was the lack of volume overall and for rising stocks.
Crude oil was also down significantly and support at 67-68 needs to hold and quickly.
The market seems to have great difficulty in following through on any rallies despite it being so extremely oversold.
A weak close on Wednesday would be quite negative as a signal for the next ST trend, for the overall market.
drbob
