Markets imploded Monday, as the start of the weeks have been somewhat unfriendly as of late. The Nasdaq lost 2.38%, but did manage to close precisely at 50 day SMA support. It did just that on 2/25-26, and fell below it intraday on 4/5, only to make a spirited comeback to close just above. It recovered 35 handles from its lows on 4/5. The S&P 500 lost almost an identical amount to the Nasdaq falling 2.3%. It is less than 1% away from its own 50 day SMA test at 1540. The ETF SDS which has been a pretty good indicator of when selloffs potentially end, is articulating a move to 45.90, where the rally can resume, or if its pierced to the upside can spell further misery. The questions is the loud noise prognosticators have been making expressing that a 5-10% correction is imminent. Both benchmarks mentioned above are about 2.8% off their most recent 52 week highs. Now if the strong consensus is for a 5-10% correction, what occurs when that happens is anyone’s guess. If everyone is of the belief that will happen, perhaps we get more downside. But the indexes have to be given the benefit of the doubt, but that doubt is becoming more alarming each and everyday. Even merger Monday with DISH S and TMO LIFE could not stem the heavy outgoing equity tide.
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