Too many factors are affecting the markets recently causing choppy action and a sideways price action across all the indexes. Some of these factors include:
-Uncertainty in Greece. Debt issues coming to the surface again. Need more bailout. I’m watching the Eurodollar
-USA Debt ceiling is maxed, who will give us credit?
-The Middle East issues are causing havoc. Lybia, Syria, and Egypt
-Spain riots getting out of control due to government cutbacks
-Presidential Elections are coming up and economic policy is subject to change causing institutional investing to take a halt. Election season historically has a sideways market.
We can see in the Nasdaq chart below we are approaching the 2600 support level. What has me worried is how the price action has been gapping to the downside in an accelerated manner is we breach the support level, further downside and a major correction could be a possibility. The last few months breakouts have been failing after an 8%-10% run. The weakness is evident. Keep an eye on the 2600 level as well as how individual stocks behave when we reach that critical level. This will help you decide if we will bounce or not. Price and Volume are your best indicators. Good luck.
