Markets displayed bifurcated action Monday as the Nasdaq took a body blow to begin the week falling 1.1%, compared to a flat finish essentially for the S&P 500. The action foreshadowing some gloom around the corner, or was the Nasdaq simply taking a day to rest and catch its breath? Could it be rotation back into some energy plays which reside mostly on the S&P? We did speak recently about the Nasdaq retesting its double bottom breakout trigger at 4485 on 8/18. Volume was well below even the average daily volume on that breakout, so it was hard to get really excited about the move. The auto and auto related group was taking a beating last week, before the TSLA move lower today on a downgrade. Notice however, it did catch bids at the round 250 handle, and its 50 day SMA. Names like CMI down now 15 of the last 17 sessions. Or you can look at a TEN chart and see it on a steep 7 session losing streak. Those names have some ugly weekly charts, and both are on consecutive losing streaks with CMI down 3 weeks in a row, and TEN four. You have GM sitting on the bear threshold brink down basically 20% from recent 52 week highs. The auto group is not as relevant as it was once in years past, but you can not help but wonder is this group getting ready to “drive” the benchmarks lower, pun intended?
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