Last Shake or the Start of Something Ugly?

Fortunately today’s scans didn’t reveal quite the same ugly picture projected by the indices yesterday. The Dow plunged 166 points making for quite a dramatic shake down, but unless the market follows through with more selling there doesn’t appear to be a reason to panic. We must, however, see the QQQQ hold support at $35.00-$35.25. This area represents its 50- and 200-day averages. If it fails there, it will likely get pretty ugly over the next 4 or 5 weeks. The good news is we didn’t find any strong short set ups in our analysis today and we actually did come across some nice individual stocks showing some strength. In other words, selling pressure is not yet reaching the level where it is indiscriminately taking everything down with it. Hopefully we are only seeing the final shake out that loosens the weak hands before the market resumes the uptrend.