Monday Blues

The Nasdaq fell for the fourth day in five and, like the S&P 500, had its largest decline since Feb. 4th. The Nasdaq has now lost -6.7% since January 26, when it reached its high for the rally. In comparison, the S&P 500 has only fallen -0.7% in the same period.

To be sure, the day certainly was a disappointing one for the bulls. While trading volume wasn't particularly heavy on the NYSE, the volume on the Nasdaq was heavier. As mentioned previously, there is lots of negative technical action, particularly in the Nazzdogs. While the reports from Texas Instruments (TXN) as well as Triquint (TQNT) and Cymer (CYMR) were positive in after hours, it will be interesting to see if that brings out the buy-the-dippers tomorrow. Today's analyst upgrades to the chip sector didn't do any good so it will be noteworthy if good news can do the job instead.

Beneath the surface, I personally don't like to see a negative Monday. As I've commented upon before, we usually see nice inflows over the weekend that makes for a strong Monday as portfolio managers put that money to work. Perhaps those inflows are finally starting to taper down a bit, which is yet another red flag that we will want to keep in mind in the short-term. As always, we should continue to expect the best, but plan for the worst. See you tomorrow!