SHORT TERM: neutral
Is this such a fragile market for it to react as it did to the statements of one CFO from one high tech company: Google. It does this quite often with other tech companies too. I do not believe it is fragile. I do believe when expected or unexpected bad news hits the NQ trading floors, the buyers get out of the way (pull their bids) because they know the sellers will be coming out in droves. Such is a derivative driven market!
The market opened lower today due to selling in europe overnight. The selling initially seemed to hit only the indices that have been registering recent new highs: TRAN/R2K/NYA/DOW/SPX. The NAZ/NDX was down modestly. Then the statement of expected lower revenue growth in the future was made by the CFO of Google at a Merrill Lynch conference, hit the floor. This information, btw, was already made public in their end of year statement made the end of January. It is common knowledge that Google has been growing at an unsustainable rate. The stock reacted to the financial statement at the end of January, and now reacted to the same news again the end of February? Like I stated earlier, such are the risks of a derivative driven market.
Short term: the indices are extremely oversold and due for a bounce. The NAZ/NDX/SPX all have positive divergences on their RSI and are oversold on MACD. The EW pivots and support levels, mentioned this morning, held fairly well for the rest of the day. I would expect the following pivots to provide support tomorrow: NAZ 2278, NDX 1671, SPX 1276 and DOW 10960. If they do not hold, the list of pivots are on the 60 minute charts for each index on the chart link. I’m waiting for things to stabilize, after this unexpected end of month selling, to assess the short wave count. So far, it still looks good! Best to your day!
INTERMEDIATE TERM: UPTREND
LONG TERM: BULLISH