If you’re bearish…

Yesterday, I posted charts that indicated the market didn’t know what it wanted to do.  Well, it decided.  Most all my indicators rolled over to sell signals as of the close. 

On the NASDAQ, the Summation Index, Percent of Stocks Above the 50 Day MA, and Bullish Percent Index all rolled over.  The Summation Index sell signal is especially troublesome because those signals typically last for several weeks at a minimum. 

Ndx_summation_092105

Ndx_50_day_092105

Ndx_bullish_percent_092105

On the NYSE, the Summation Index and the Percent of Stocks Above the 50 Day MA have also given sell signals.

Nyse_summation_092105

Nyse_50_day_092105

The question now becomes when and where to expect a bottom.  It looks to me that the NASDAQ is in a new downtrend channel which shows the first line of support around 2,100.

  Nasdaq_092105

As to when the index might bottom, I’ll defer to master market timer Tom McClellan who believes that the 20 week cycle will bottom around the beginning of October.  No surprise there, since the market has a tendency to find bottoms in October. 

2040_week_cycle

Source: McClellan Market Report

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