Why Investors Should be Very, Very Worried

Stocks opened with a technical recovery yesterday after a drubbing on
Wednesday. This followed positive news from Europeand a drop in weekly jobless
claims. By 10 a.m., the Dow Jones Industrial Average was ahead by almost 200
points. But a sell-off in the afternoon in technology stocks drove the broad
market lower, and by late afternoon, the Nasdaq was deep in the red. A late
rally recovered most of the losses, but the Nasdaq closed the day down 0.43%.
Yesterday's extreme volatility may not be evidenced by the closing numbers.
But note yesterday's trading bar showing a swing from high to low of 4.25%.
Despite the dizzying pace, the Nasdaq failed to close higher. Even more
important was its failure to hold above the 20-day moving average (green line)
and its consistent inability to mount an attack on its 50-day moving average
(blue line).