Boy Oh Boy, What a Great Trend

DJIA - 205.99, -1.68% SP500 - 22.95, -1.69% NASDAQ Comp. - 54.93, -2.24% Russell 2000 - 14.74, -2.01% Oil closed at $138.38 up $5.07 After two down days oil prices moved higher and stocks moved lower in a big way. We wrote in our June 9 and 10 posts how decliners leading advancers highlighted the weakness in the rally in the DJIA. Well today decliners led gainers by even a larger margin and the DJIA dropped in a big way. Decliners led advaners 2,588 to 590 on the NYSE and 2,224 to 669 on the Nasdaq. If you read our May 30 post and took the technical evidence presented there seriously you probably love trading right now. If you didn’t or you forgot what we wrote, take a moment and go review it. Learn from the technical evidence that we presented there so when it occurs in the future you will be prepared the next time. We wrote in our June 7 post regarding the S&P, “If Friday’s break below 1,370 holds, look for a target of 1,334, in the area of mid April horizontal support.” Today’s close of 1,335.49 is eerily close to that target. The only downside to our accurate reading of the Chart Signals is that someone says something like “you knew that was going to happen didn’t you?” The reality is we don’t see the future; we just understand the Chart Signals and know they give us a solid insight into what is likely to happen. The good news is that oil prices rose and the Nasdaq and Russell followed the Dow and S&P and broke support today. The Nasdaq broke below its double top support in the 2,425 and with a resulting price target of 2,300 on the index. This support area also represents the old horizontal support area from January which has been acting as an area of support that was broken today. The Nasdaq is now trading below its 20, 30, 50 and 200 DMA. Broken support suggests more down trend to follow. The Russell 2000 closed below its May 23 low horizontal support area which is suggesting a change in trend from up to down. As of today the Russell is also trading below its 20, 30, 50 and 200 DMA. The S&P which fell below its 50 DMA on Friday continues to move lower. The next horizontal support area is in the 1,324 area. The DJIA which has been trading below its 20, 30, 50, 200 DMA since May 21 continued its downtrend today. The next major support area is the mid-March lows in the 11,800 area. Watchlist Stocks Still In Intermediate Term Up Trend: AGU, MOS, USO, MEE, IPI, POT, CNX, BTU, STRA, SCHN, IBM, MON, CLF, MA, SOHU Potential Double Tops: X, AAPL, CF, MTL Most of the other stocks have shifted into a sideways trading range or down trend already. Most other stocks in our watchlist have already changed to sideways trading range or down trend. We'll share more Chart Signal insights on individual stock charts over the balance of the week so check back regularly. Today’s Action Moving Up: FSLR, AGU, MOS, USO, MEE, IPI, POT, CNX, JASO Moving Down: BIDU, MA, PCLN, DECK, AAPL, GS, DRYS, CLF, X, LEH, RIMM, MON, SCHN, IBM, V, MER, FWLT, AMZN, MS, NUE, GRMN, STRA, CELG, EBAY, EXPE, NEK, ESRX, UAUA, BRCM Intermediate Term Market Trend: Down Short Term Market Trend: Down