Stocks erase gains from yesterday in early trading

The US stocks have taken a turn to the downside in the process has erased most of the gains from yesterday:

• Dow is down -544 points or -1.84%
• S&P is down -85 points or -2.3%
• Nadaq is down -317 points or -2.88%

Looking at the Nasdaq , the price is approaching the lows from last week and earlier this week at 10732.72 (see hourly chart below). A move below opens the door for further selling. Yesterday, the high stalled just ahead of a downward sloping trend line. Sellers remain in control below the line.

Taking a broader look at the weekly chart below, the rally yesterday also stalled just ahead of the 200 week MA at 11112.17. Staying below that MA kept the sellers more in control from a longer-term perspective. The last time the price closed below its 200 week moving average was back at the lows from the pandemic in March 2020. Last week, the price closed below the moving average.

The downside targets on the weekly chart will look toward the low from June at 10565.14. The 61.8% of the move up from the 2020 low comes in at 10291.29. That retracement would be another downside target on more selling technically.

One bright spot is that the S&P index remains above its 200 week moving average at 3589.59. The price of the S&P has not traded below its 200 week moving average since the week of April 6, 2020. A move below that level would have traders targeting the 50% midpoint of the move up from the 2020 low at 3505.24 (see weekly chart below).

Apple which has a weight of 7.24 in the S&P (it is the highest weighted stock in the S&P) is trading down $6.70 or -4.47% at $143.10. It’s shares have fallen below its 100 week moving average at $146.02 this week. Relatively speaking, Apple shares have held up well in 2022. There shares are currently down 19.51% versus at -23.7% for the S&P index and -31.4% for the NASDAQ index.

PS: Microsoft reached a new 52-week low of $234.43.

Below are the top five weighted stocks in the S&P:

Sellers remain in control.