Dow, NASDAQ and S&P all crater on good news

When good news is bad news.

Hooray, hooray the Fed cut interest rates 25 basis point yesterday ... good news, right? This should have been good news for stocks so why did the markets crater? If the FED had cut by 50 basis points, would the market have fallen twice as far?

Here's a case of good news being bad news. When the market finally digest the Fed notes and saw that the odds where high that the FED was done cutting for the year, it said to itself OH, OH, no more getting the keys from the FED to take stocks for a ride.

Here's my take, and we have mentioned this before on this blog. The longs after a five year bull run are just tired. The technicals are beginning to break down and weaken.

MarketClub members should look at the MACD and see that several major indicies are rolling over but have not yet dropped into a full bear mode.

Here are the key levels we are watching very carefully ...

DOW: Major Support at 12,517

S&P: Major Support at 1,370

NASDAQ: Major Support at 2,386

We would go into an extreme bearish mode if these levels were to give way. Right now the indices are in a broad trading range that appers to have a negative bias.

As we have said before it's going to be a bumpy and interesting ride.

Watch the trade triangles for confirmation.

Good luck and stay tuned to this blog for updates.

Adam Hewison