Profit Taking Drives Stocks Down From Resistance

DJIA - 486.01, -5.05% SP500 - 52.98, -5.27% NASDAQ Comp. - 98.48, -5.53% Russell 2000 - 31.13, -5.74% Exchange NYSE NASD Advancing 690 596 Declining 2,765 2,272 Oil $65.30 -$5.23 Gold $742.40 -$14.90 SOX 236.25 -11.46 VIX 54.56 +6.83 Strongest Sectors: XLV -1.47%...XLP -1.77%...XLU -1.85% Weakest Sectors: XLF -9.15%...XLK -6.05%...XLY -5.52% Sector Watch Up Trending: Sideways: Down Trending: XLP, XLF, XLY, XLV, XLI, XLE, XLU, XLB, XLK Tuesday’s Election Day rise into resistance reversed on Wednesday as profit takers sold at resistance. The decline was relatively modest until just before mid-day when the sell off accelerated. Wednesday’s sell off took back all of Tuesday’s gain and more. Stocks, oil and gold all fell pulling over 75% stocks down on both the NYSE and Nasdaq. The sell-off was broad as all nine sectors moved lower. Many stocks, like the DJIA and other indices, over the last six days had moved into the horizontal resistance, established since October 14. The broad indices have been in a sideways trading range over the past three weeks bouncing between support and resistance. Wednesday’s move down did break the low of the high day creating an entry signal for short-term bearish trades on many stocks, ETFs and indices. The price action was also an exit signal for many short-term bullish trades. Index Commentary The DJIA formed a bearish engulfing pattern in the area of horizontal resistance candle closing below its 30 DMA. The SPX formed a bearish engulfing like pattern closing below its 30 DMA and near its 20 DMA. The Nasdaq formed a large black candle that broke the low of the high day and closed at its 20 DMA. The RUT formed a large black candle falling from horizontal resistance, breaking the low of the high day and closing just below its 20 DMA. Wednesday’s Action Moving Up: None in our watchlist Moving Down: FSLR, BIDU, MA, GS, POT, ANR, MON, AMZN, CF, DECK, SOHU, V, NUE, CNX, FWLT, MEE, X, MOS, BTU, IPI, SCHN, SINA, ZION, KRE, KBE, PNRA, CLF, NIHD, LDK, BUCY, MER, INFY, FMCN, DRYS, MS, AEM, PCLN, KMT, JASO, ONXX, HANS, LCC, UAUA, RF, NDAQ, STRA, AGU, GRMN, EBAY, EXPE, LAMR Intermediate Term Market Trend: Down Short Term Market Trend: Neutral