Stocks fell slightly yesterday by about 40 basis points to close at 3,116, holding support at 3,110. So did we bottom?
Again, the signs continue to suggest that we are bottoming. You want to agree with the six signs I pointed out yesterday, that’s up to you. But after a drop of 8% in a straight line, a 40 basis point drop to around Tuesday’s lows of 3,118, seems even to me.
Regardless we need to hope this is around the bottom. Otherwise, things are going to get much worse. We are at an inflection point for many important indicators, as well as the 10-year yield. So we need to see some signs of improvement and soon.
The number of stocks below their 50 and 200 day-moving average are now at the low end of the range, and there has only been a handful of other times it has gotten lower.
You can see in both of the charts above those ratios could fall significantly from their current levels if we don’t see a change in sentiment.
S&P 500 (SPY)
Anyway, by days end, it became clear that 3,130 was resistance, and 3,110 was acting as support. So what happens today? I’m still in the camp that this region is around the bottom. We remain in oversold conditions on the RSI, and as I showed you in the chart above, the number of stocks below their respective moving average suggests they bounce.
Acadia (ACAD)
ACADIA Pharmaceuticals (NASDAQ:ACAD) reported strong results beating on the top and bottom, and guiding revenue well above expectations. The stock is trading up to around $41.30 after hours. I’m interested in what they say on the call.
Square (SQ)
Square (NYSE:SQ) is popping after reporting better than expected results and guiding inline. The stock is jumping, filling the gap up to $83 in the after hours. That is resistance, be careful here.
Microsoft (MSFT)
Microsoft (NASDAQ:MSFT) is falling after announcing it would not meet guidance on its More Personal Computing unit guidance. The stock is trading around the range it has been in the last few days.
