November 20, 2008 By Paul Shread: More stories by this author:
The market gave up a very big trading range today on near-record volume, yet another breakdown in the most brutal bear market in 70 years.
It now falls to the Dow (first chart below) to keep this market from hitting much lower levels.
The Dow should have strong support between here and 7000, which would cover the 1998 and 2002-2003 lows (7200-7400), the 50% decline mark (7100) and the October 1997 low (6971). A very important place for the market to make a stand.
We would also note that at -38.4%, the 9-month ROC is now at its most oversold level since it hit -40% at the 1938 low. It's worth noting that the SEC implemented the uptick rule in 1938 in response to the 1937-1938 decline, just one more piece of evidence that the SEC needs to revisit its ill-timed decision to revoke the rule in July 2007, and sooner rather than later.
To the upside, a move back above 7900-8000 would be a good start for the bulls.
The S&P (second chart) lost major support today; the next possible support levels are 733, 716 and 681. To the upside, the index needs to get back above 768-789 and 818-840 to make a bare beginning.
The next support levels for the Nasdaq (third chart) are 1253, 1160-1180 and 1108, while a move above 1430 and 1493 would be a good start for the bullish case.
We had warned repeatedly that a break of the 2006 low of 10,683 on the Dow could mean a full-fledged systemic crisis, but the speed with which events have since unfolded has been nothing short of shocking
Tech Earnings Hold Up, But Stocks Don't Dell, Brocade and Salesforce post solid results, but will investors care? Ask Print this Article Email this Article November 20, 2008 By Paul Shread: More stories by this author:
Technology earnings may be holding up, but they're getting little attention from a market fretting about the solvency of Citigroup (NYSE: C) and automakers.
On a day that the S&P 500 closed at its lowest level since April 1997, Dell (NASDAQ: DELL), Brocade (NASDAQ: BRCD) and Salesforce.com (NYSE: CRM) came out with some pretty solid earnings results after the close.
Shares of all three companies edged higher after hours on their earnings news. Dell rose about 5% after beating earnings estimates but missing sales expectations. Brocade was little changed despite beating earnings and sales estimates, while Salesforce gained after beating estimates but issuing mixed guidance.
But it remains to be seen if the solid earnings are enough to help a market that has been in full-fledged panic since mid-September, when Lehman Brothers filed for bankruptcy. The S&P fell below its 20002-2003 lows today to close at 752.44, an 11 1/2-year low.
AMD (NYSE: AMD) and Micron (NYSE: MU) continued to tumble, but the rest of the chip sector stabilized, with Lam Research (NASDAQ: LRCX) and Novellus (NASDAQ: NVLS) posting small gains.
Apple (NASDAQ: AAPL) and Google (NASDAQ: GOOG) lost about 7% each and Research in Motion (NASDAQ: RIMM) shed 8%.
Symantec (NASDAQ: SYMC) fell 10% on worries about competition from Microsoft (NASDAQ: MSFT).
Verifone (NYSE: PAY) plunged 43% after lowering its outlook. The Nasdaq fell 70 to 1316, the S&P lost 54 to 752, and the Dow plunged 445 to 7552. Volume rose to 10.27 billion shares on the NYSE, and 3.2 billion on the Nasdaq. Decliners led by a 34-3 margin on the NYSE, and 25-4 on the Nasdaq. Downside volume was 94% on the NYSE, and 92% on the Nasdaq. New highs-new lows were 45-1684 on the NYSE, and 2-1272 on the Nasdaq.
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