The NASDAQ continues to be the weak sister of the major indexes – both leading the market down during this selloff, and today falling much lower in relation to previous levels than the S&P 500 and Russell 2000. Both the S&P 500 and Russell 2000 tested yearly lows this morning (and bounced – no shocker, dip buyers still working overtime), the NASDAQ gapped down and we have to look back to latter 2010 levels for potential levels of support.
S&P 500 – Intraday low matches second week of January 2010 bottom.
Russell 2000 – this index hit its lows a few weeks later than the S&P 500 in January, and has come back to test it.
NASDAQ – broke all lows for the year, tested mid December 2010 lows intraday.
Any aggressive dip buyers who think the coast will soon be clear and this is an overreaction can go in with a proposition that the S&P 500 will hold its yearly lows. Of course, if proven wrong by a move to new yearly lows – evasive action would be prudent. The lows of this morning will be a line in the sand many of the more nimble traders will be watching, after any cursory bounce. But rarely do you gap down and then do a 180 degree move back up.