Oil Hits Another Record High, Indices Fall From 200 DMA

DJIA - 199.68, -1.53% SP500 - 13.23, -0.93% NASDAQ Comp. - 23.83, -0.95% Russell 2000 - 2.60, -0.35% Oil closed at a new high of $129.07. The DJ Transportation Average closed down 0.79%. The bearish candle patterns on the chart yesterday followed through with a significant pull back in the DJIA, S&P and Nasdaq Composite on Tuesday. A late rally in the Russell actually resulted in a smaller down move on Tuesday than Monday’s 0.37% drop. All four broad indices closed well below their 200 DMA. The move down was broad with 392 stocks in the S&P 500 and 74 stocks in the Nasdaq 100 moving lower. On the NYSE decliners 2,031 lead advancers 1,114 and on the Nasdaq decliners led advancers 1,749 to 1,139. The previous low point in the indices was on May 9. That is the support low and a break below could represent a change in the intermediate term trend. A break below the 12,700 level (May 9) on the DJIA would be a double top confirmation with a price target below 12,300 on the Dow. While a conclusion of a trend change is still premature we want to be aware of where these key reversal levels are on the chart. Agriculture related, steels, coal, utility and select technology stocks moved higher. Many technology, transportation and financial stocks moved lower. This may be nothing more than an attractive bull flag support pullback opportunity and we do need to stay focused on key support levels just like we have been watching the potential resistance at the 200 DMA. Today’s Action Moving Up: POT, X, CLF, AGU, FSLR, MOS, CF, MON, PCLN, AAPL, SCHN, CNX MEE, BIDU, RIMM, FWLT, XLE, XLU Moving Down: DRYS, MA, GS, AMZN, BRCM, NUE, DECK, MER, MS, IBM, SOHU, CELG, XLF Intermediate Term Market Trend: Up Short Term Market Trend: Down