The market plunged today on heavy volume, as all the major indexes closed down around –3%. A huge decline that never let up. Traders were concerned about bad economic news concerning the state of the economy. Not all news was bad though,. WalMart reported better than expected earning. But in a Bear market, good news is often interpreted as bad. Traders saw this as a sign that the economy is turning sour, as consumers are looking for bargains on essential items.

The S&P 500, which I like to use as a market proxy, plunged through a trendline and through the 50-Day SMA today. It did find some support, but there are signs pointing lower.

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On the 08/14/08 report, I posted a weekly chart of the S&P 500, and pointed out that it is approaching the 200-Day SMA, and to watch for some resistance here, as it did when it hit the 50-Day SMA in May. Although the weekly chart did not touch the 200-Day SMA, it did find resistance in this area and has reversed since then.

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Trade Ideas for 09/05/08:

No trades for tomorrow. Waiting for a playable bounce next week, and hopefully the next rally will have some leaders this time.

Good luck and good trading!