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If You Squint, You'll See Some Bright Spots

Let's review some of the positives of the day, and check out Apple, Nvidia, Disney and Microsoft.

The Market

In the spirit of trying to find positives in a sea of bad news, let me note a few items for you.

The late-day rally actually saw the Nasdaq and the S&P close higher than Monday’s low. I’m sure we’ve seen that before in this downdraft, but that’s a plus, not closing at a lower low, especially after being down so much.

In addition, for the third time since last Thursday’s decline, the number of stocks making new lows on both the New York Stock Exchange and Nasdaq did not expand beyond Thursday’s peak reading. Remember that, after we get a peak reading, it typically takes months of rallies and lower lows to see fewer new lows develop over time. Should last Thursday’s reading hold that means the last few days should be viewed as part of the process.

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Unfortunately, the credit exchange-traded funds continue to act weak. The iShares iBoxx High Yield Corporate Bond fund (HYG) - Get Free Report; SPDR Barclays Capital High Yield Bond fund (JNK) - Get Free Report; and iShares IBoxx Invest Grade Corp Bond Fund (LQD) - Get Free Report were all off their lows, but all made new lows.

On the sentiment front, the Investor’s Intelligence bulls came down to 35%. This is barely a move from last week. But at least they didn’t increase. It was the bears that finally shot up, with bears now at 33%. So we haven’t seen more bears than bulls – we saw that at the December 2018 low. But this is a marked change in bears. I’ll take this as another step in the right direction.

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On a shorter-term basis, the Daily Sentiment Indicator (DSI) fell back under 10 for both Nasdaq and the S&P with the readings at 6 and 5 respectively. And the Volatility Index shot back up to 93. You might recall during the fourth quarter run up, each time we saw Nasdaq’s DSI over 90, we got a down day (once or twice it was more than one day). In this downdraft we have seen an up day after each single digit reading. Let’s see if the pattern continues.

New Ideas

For the person who keeps asking me about Nvidia (NVDA:Nasdaq) it came down and tagged the line. I am not sure I want to catch a falling knife, but if we are going to get a bounce, this should participate. There is light resistance at $220, with much more at $230. On the downside, today’s low is support, at least it’s tentative support.

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Today’s Indicator

Shockingly, the Volume Indicator still sits at 41%, which is oversold, but not an extreme oversold.

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Q&A/Reader’s Feedback

Helene welcomes your questions about Top Stocks and her charting strategy and techniques. Please send an email directly to Helene with your questions. However, please remember that TheStreet.com Top Stocks is not intended to provide personalized investment advice. Email Helene here.

I had to go to a three year chart of Disney (DIS) - Get Free Report, and I still could not find support. The best I can say now is that if it could gap up over $90, it could leave this as an island below. Barring that, if it gets to $95 to $100, it’s a good place to sell it.

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It is curious that Apple (AAPL:Nasdaq) is not down that much on a relative basis. There is support not far below at $230. I am not even sure where I would sell it on a rally. $260 looks like first resistance.

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Microsoft (MSFT:Nasdaq) is into support here and it goes all the way down to the low $130s. It, too, is not down that much to my surprise. The only resistance that is clear to me is $150-$155.

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