ETF And Stock Indexes Drop To Major Support Levels

Major stock indexes and their related ETFs fell on Thursday with the Dow Jones Industrial Average (DIA) posting its second day of losses, along with the s&P 500 (SPY) and Nasdaq 100 (QQQ)

The Dow (NYSEARCA:DIA) slid 0.34%, the S&P 500 (NYSEARCA:SPY) dropped 0.63% and the Nasdaq 100 (NYSEARCA:QQQ) fell 1.04%.

VIX, the CBOE S&P 500 Volatility Index, also known as the “fear indicator,” jumped again today, up 3.68% to add to yesterday’s 18% gain.Today’s decline brought the S&P 500 (NYSEARCA:SPY) back to a major support level at 1500.

The day’s economic reports were fairly weak with jobless claims rising, the Philadelphia Fed report declining to -12.5, a sharp miss from the expected +1.6, and Markit Flash PMI registering a 55.2, down from last month’s 55.8, and also below forecasts. Leading indicators also weakened with a a 0.2 for January, down from 0.5 in the previous month and 0.3 expected.

Markets have been spooked over the last couple of days by the possibility that the Fed might be ready to curtail its quantitative easing program and also overbought conditions added to recent selling pressure.

In other major markets, gold (GLD) continued to fall, -2.5% today to close at $1564/oz. Gold (NYSEARCA:GLD) has suffered a sharp decline in recent days and is close to forming a “death cross” which is a sell signal generated when the 50 day moving average crosses below the 200 day moving average.

Oil (USO) dropped 1.94% to $92.99, its lowest level so far in 2013 as supplies grow and demand dims.

The U.S. Dollar (UUP) continued its recent rally, gaining 0.41%.

On the sequestration front, President Obama called Speaker of the House, John Boehner and Republican Senate Leader, Mitch McConnell, but no announcement came from the discussion and apparently the two sides are no closer to a deal with just 8 days remaining before the mandatory spending cuts take place.

Friday wraps up the week with no economic reports and little else to move markets as earnings season winds down.

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