Market Recap For 8/19/2015

With the continuation of the currency war, a clear sign the global economy is under some stress. The CPI report did not show much inflation in the US, and the FOMC minutes did not reveal any certainties from the committee on the timing of a rate hike. They appeared to be just as confused as all the talking heads in the media. One wonders what did that 4 trillion dollars the FED spent on will end up giving us. Another global financial crisis? It certainly looks that way at the present with economic slowdown and currency devaluation taking place in the Far East.

From the market breadth, the U/DVOL at one time was almost 10:1 in favor of the down volume. And the decliners were more than 2500 while only slightly more than 500 issues traded in the NYSE were advancing. Since there are only slightly more than 3000 issues being traded in the NYSE and having this many issues declining, it is like sell everything in sight then ask questions later. The advance/decline (A/D) did not show sign of reversing until after the noon hour. The up/down volume (U/DVOL) did not start to reverse until approximately 30 minutes before the release of the FOMC minutes. Guess what, some dummy claimed to have released the minute early, “ACCIDENTLY!” That is why you will see on the intraday chart that the market had started to move up 30 minutes before the scheduled release time, 2:00PM ET. The TICK also shows there were a lot of sell programs being executed throughout the session. There were many TICK under -800 and quite a few were below -1000 in the NYSE. After the ‘official’ release of the FOMC minutes, the market rallied and recouped all its losses for a short period before it resumes to the downside.

Breadth chart

(click on the chart to enlarge)



The SP500 at its low point of the day was down -26.39 or -1.3%. It ended the session at 2079.61, just barely above the 2079.11 support, with a loss of -17.31 or -0.83%. This 2079.62 level is being challenged once again. If it breaks below this support level, watch for the 2063.52 or the 2056.15 level to be tested for support. If it can find support from the 2079.62 level, then the 2108.86 remains to be the potential resistance.

SPX




The SPY continues to close above the 207.95 support level. If this support level is breached, look for a move to potential support level at 206.26 or 205.27. The potential short term resistance remains to be 210.68 and the near term resistance levels could be 211.63 and 211.99.

SPY




The Nasdaq 100 broke below the engulfing candle and through the 4506.19 support during intraday. At the end of the session, it closed at 4510.90, slightly above the support level with a loss of -31.17 or -0.69%. The 7/13/15 price gap remains to be the potential near term support level, and the potential short term support remains to be 4506.19. The short term potential resistance is 4562.33 and the 7/22/15 price gap is the potential near term resistance.

NDX




The Russell 2000 did not waste any time on breaching the 1208.47 support level. It opened with a gap down 8 cents above the 1208.47 level. It came down and tested the 1200.74 level again before it ended the session slightly above this level. It closed at 1202.98 with a loss of -11.90 or -0.98%. The short term potential support is 1200.74 with the 2/3/15 price gap being the potential near term support. The potential short term resistance is 1215.42 and the potential near term resistance at 1238.76.

RUT



The Dow Jones Industrial and the Russell 2000 closed today with a new post all time high low. Although the breadth indicators did not confirm the DJI & RUT price action, but they are sending mixed messages. Therefore, one needs to remain defensive while waiting for the market to decide which direction it will move in the near term. Until then, cash is a position.