There was a pick up to Friday’s selling, but while the one-day loss approached 2% for the Nasdaq and S&P it wasn’t accompanied with the kind of volume such selling can typically scare up.
The concern is that last week’s peak for the Nasdaq morphs into a double top, but for this to be true there would need to be an undercut of the September swing low – and that could take well into November. Until then, we are looking at a sideways consolidation.
Selling for the S&P(NYSEARCA:SPY) matched that of the Nasdaq(NYSEARCA:QQQ) with the same outlook with respect to the potential double top. The S&P is a little closer to its converged 20-day and 50-day MA as the Nasdaq, but both indices will have an opportunity to attract buyers at these levels. Again, until we see a larger move lower we are looking at a sideways consolidation bound by September’s high and swing low. Technicals are all net positive.