Stocks ended sharply lower Friday On the 25th anniversary of “Black Monday” – the market crash of 1987. Logging their worst one-day drop in four months, following disappointing quarterly results that highlighted the global economic slowdown.
The NASDAQ fulfilled perfectly the “Head & shoulders” pattern we highlighted in our recaps in the last 2 weeks. The target we called was $65.50 area on the QQQ’s that was achieved today. This area will act as major support with the 200ma nearly there and as it was the breakout area in early August. Volume was higher last 2 sessions and this move can continue going lower from here espcially if tech big names will continue to disappointing this week.
The S&P also fulfilled his target has it reached the lower end of the channel. The 143 support line that was highlighted here earlier this week is still holding for now but a new descending channel maybe started to shape even before the current one finished. One should know that a break down will not necessarily say that the uptrend is over and will need to prove itself. We saw that in late July when the market was at the bottom and ended up breaking to new highs and in mid September when the market broke out with no continuation.
On the tap next week:
Monday: Final Presidential Debate; Earnings from Caterpillar (CAT), Freeport McMoran (FCX) , Hasbro (HAS), Peabody Energy (BTU), Texas Instruments (TNX) , Yahoo (YHOO)
Tuesday: NFIB small business optimism index, FOMC meeting begins; Earnings from DuPont (DFT), 3M (MMM), United Technologies (UTX), UPS (UPS), Coach (COH), Xerox (XRX), Amgen (AMGN), Facebook (FB), Netflix (NFLX), Gilead Sciences (GILD)
Wednesday: new home sales, FHFA home price index, oil inventories, FOMC mtg announcement; Earnings from AT&T (T), Boeing (BA), Bristol-Myers (BMY), Delta (DAL), Eli Lilly (LLY), Akamai (AKAM), Symantec (SYMC), Zynga (ZNGA)
Thursday:Durable goods orders, jobless claims, Chicago Fed nat’l activity index, pending home sales; Earnings from Altria (ALTR), AstraZeneca (AZN), ConocoPhillips (COP) , P&G (PG) , Aetna (AET), AutoNation (AN), Credit Suisse (CS), Dow Chemical (DOW), Pulte (PHM), Sprint (S), United Continental (UAL), Apple (APPL), Amazon.com (AMZN), Coinstar (CSTR)
Friday: GDP, consumer sentiment; Earnings from Comcast (CMCSA), Merck (MRK)