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‘m not going to talk about it because we already did so extensively in Member Chat. What we will be concerned with is how much of a drag AAPL is on the Nasdaq this morning as the stock makes up 10% of the index. At the moment, AAPL has recovered from a low of $350 in overnight trading (down 7.5%) back to $368 at 8am so little effect so far but what we don’t expect is for AAPL to go up and that’s going to weigh on the Nasdaq, which needs to add 83 points (3.3%) to get back to last week’s highs and give us our W pattern back to last week’s high.
NOW do you see the problem. If 10% of the index is going down or simply frozen, now the other 90% has to gain 3.6% to drag the index back to where it was (2,550). So now we can probably say that the Nasdaq will fail to make our pattern – certainly ahead of Bernanke tomorrow morning.
That means there will be a lot more pressure on the other indexes to perform and we need Dow 11,500, S&P 1,200, Nas 2,550, NYSE 7,500 and RUT 710 JUST to make (in the Dow’s case) an 800-point 40% bounce off the 2,000-point drop. That 40% bounce is essentially the Fibonacci Retracement of 38.2% we EXPECT and, if we stop there – it only serves to confirm a broader downtrend. As we have discussed, we are at a very dangerous inflection point this week and the ONLY thing that is going to turn us higher is some sort of announcement of QE3 – without it, we will be flipping bearish once again (and it’s not like we’re very bullish now!).
We’ll be watching that 2,473 line on the Nasdaq very closely today – considering it’s handicap, just getting over the -5% line will be a small victory. The Russell, of course, MUST get over 697 – we’ve already seen what happens when one of our indexes is two of our 5% levels behind the rest when the NYSE dragged us under and it’s NOT PRETTY!
Meanwhile, 416,999 people besides Steve lost their Jobs this week as Unemployment Claims kicked back up 5,000 vs down 3,000 predicted by Economorons.
We went short on the Dow Futures (/YM) off the 11,300 line in Member Chat…
