While the broad market has been in the doghouse for some time, this week marks the (welcomed) entrance of the NDX to the Street's anti-party.
Let's hear it for high-heeled boots! That venerable Flotsam of Jetsetters.
The hot-money, permanently-cheap-on-a-valuation-basis GoGo-growth names are now leading on the downside.
We're talking sucking sound here. A sinking, rainy-day-feeling-again cauldron of distress - A Costco of Canned Worms - A Chicken of Doubt...
And Google ain't even hit 1000 yet.
You could argue this is bullish. I mean, hey - the Financials are hardly falling any more, even in the face of further and unrelenting horror. That's gotta be a good sign Mr. Kurtz, right?
Indeed, the Financials are turning up-on-the-day as I write this - Woot! We're going up in the face of negative news. If that ain't the light at the end of the tunnel then I don't know what is. We have got to see a bounce in this market soon.
Or, selling has simply rotated and the weakest areas in the market are in a sort of dead-zone; too washed-out to sell much more and too god-awful to begin any sizeable recovery.
FWIW, here is my 2 cents: We could in fact be ready to bounce here, but if we do it is merely going to set-up for lower-high failure; even in the NDX. Otherwise, we will see a further, accelerating decline (accelerating in the Nasdaq and NDX at least) straight away.
The latter scenario is more of a lancing blow, which is probably more bullish as far as prospects for recovery in the intermediate term.
The former, set-up for failure scenario, I would argue is the scariest potential action for the near-term. I suspect it will amount to a Pied Pipering of individual investors who have so knowingly and lovingly learned to forever buy-the-dips, since they lead to ever-higher highs; and usually sooner rather than later.
In the old days, a lower-high failure after an initial break in the market (where some old index like the DJIA had made new all-time highs while the Nasdaq had...not) was a common kick-off to a genuine bear market.
I don't want to sound alarmist (Ha!)...but decent people should be very careful at this time.
...the rest of us should just be short.