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Market Insight: S&P 500 Hits Closing Low for 2010

By Nico Isaac
Tue, 29 Jun 2010 16:30:00 ET
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On June 29, the U.S. stock indexes fell from the open, as the S&P 500 hit its lowest level of the year, while the Dow Industrials suffered a triple-digit slide beneath the psychologically important 10,000 level.
The fundamental experts rushed to the scene like medics to a car crash. There, they determined one main cause for the rout: a bearish June 29 Conference Board report on falling consumer confidence.
From an Elliott wave perspective, the first suggestion of a slide in confidence did not come from the latest economic numbers. The initial tip-off came much earlier, on June 21, when the corrective rebound in the Dow reached a common Fibonacci retracement level. From there, one technical indicator after another turned red, prompting Elliott Wave International's June 28 Short Term Update to suggest the coming weakness in the markets:
"There is clearly little buying interest among investors. NYSE breadth was negative, with 301 more shares down than up. With the exception of June 25, every day of the decline since the June 21 high has occurred in conjunction with a negative advance/decline ratio. Additionally, this afternoon's minus 1141 NYSE Ticks was the lowest since last Thursday, suggesting a late day stock 'DUMP' by investors and institutions. If the decline is extending lower immediately, prices should rapidly decline beneath 10,081 in the Dow, 1067.89 in the S&P over the coming day or so."
-- The Short Term Update, June 28.
A new Short Term Update publishes every Monday, Wednesday and Friday and is available via a risk-free online subscription to Elliott Wave International's Financial Forecast Service.

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