The morning sun is shining like a red rubber ball It's bouncing and it's shining like a red rubber ball -- Simon and Garfunkel
Slumping like all-star shortstop Alex Rodriguez in the baseball playoffs, the markets are now 0-for-3 in 2005. After ending 2004 with a solid fourth-quarter gain, the Nasdaq Composite continues to bounce downward, producing ever-uglier charts. On Wednesday, the index opened higher and quickly sold off, as it has all this week. As on Tuesday, the intraday high of 2116.75 was lower than the previous day's, and the intraday low of 2091.24 was lower. Volume was high again -- albeit down from Tuesday's level -- amid the slippage, and losers outnumbered gainers by more than 2 to 1. The action was bouncier on Wednesday, bringing to mind the Simon and Garfunkel verse cited above. There were eight thrusts upwards during the day, all of which failed to hold, and the Comp closed at its low for the session, down 0.8% to 2091.24. The charts portend more weakness in the short term. But as mentioned yesterday , all hope is not lost. The deep selling frenzy seen over the past few days has occurred a dozen times in the past two years, usually as a bottom was forming. There were three days like Tuesday back in January 2003. Compared with the Comp, the Dow Jones Industrial Average has had a less unpleasant but still losing voyage so far in 2005 as well. It lost almost 33 points, or 0.3%, to 10,597.83 on Wednesday. The S&P 500 lost 0.4% to 1183.74. The story was much the same for three groups that led Tuesday's plunge. The Philadelphia semiconductor index opened higher despite Xilinx's ( XLNX) lowered forecast, but ended up losing 1.5% to 404.25. The exchange's housing index also opened higher then slumped and closed down 1.1%. The Amex Gold Bugs index held a gain of over 1% almost until lunchtime before it too swerved down, finishing at 0.2%. Xilinx ended the day down 3.2%, homebuilder Pulte ( PHM) lost 0.8%, and Goldcorp ( GG) ended with a 1.4% loss. Futures on gold hit their lowest level since November, finishing at $427.20.