Stocks Pull Back in Continuing Trading Range

DJIA - 73.27, -0.82% SP500 - 11.78, -1.27% NASDAQ Comp. - 30.66, -1.86% Russell 2000 - 12.69, -2.51% Exchange NYSE NASD Advancing 1,155 857 Declining 2,372 1,985 Oil $62.41 +$1.37 Gold $746.50 +$12.30 SOX 214.48 -8.71 VIX 59.98 +3.88 Strongest Sectors: XLE +0.34%...XLP +0.29%...XLI +0.04% Weakest Sectors: XLF -2.95%...XLU -2.41%...XLY -2.32% Sector Watch Up Trending: Sideways: Down Trending: XLP, XLF, XLY, XLV, XLI, XLE, XLU, XLB, XLK Buyers came in early Monday to follow through on Friday’s rally but a sell off began in the first 30 minutes and by mid-day E.T. the broad indexes were turning negative. While the DJIA and SPX kept more than half of Friday’s gains, the Nasdaq gave back more than 75% its gains and the RUT fell more on Monday than it rose on Friday. Monday is a good example of why pre-market futures are an inconsistent guide to the trading day. Today was just another example of futures being up nicely and the open and the market finishing down for the day. Both gold and oil rose on Monday and commodity related stocks gold, coal oil, steel and Ag-related were relatively strong. Solar stocks were weak on Monday as were financial and tech stocks especially semiconductors. The market continues to trade in the current sideways trading range since the October 10 low bouncing between support and resistance. The failure of all four broad indexes to confirm Friday’s bullish harami is classic sideways trading range price action; Buyers and sellers fighting it out. As we wrote on Friday;”Either way Monday should prove to be an exciting day of market action as buyers and sellers continue to battle it out.” And sure it enough that’s exactly the way it was. Index Commentary The DJIA rose to its 30 DMA where sellers pushed it back to close under its 20 DMA…failed to confirm Friday’s bullish harami. The SPX rose above and then closed below its 20 DMA…failed to confirm Friday’s bullish harami. The Nasdaq traded and above and then closed below its 20 DMA and failed to confirm Friday’s bullish harami. The RUT gapped up to its 20 DMA and sold off below Thursday’s low…did not confirm Friday’s bullish harami…continues to form a potential head and shoulders bottom. In the DJIA, SPX and Nasdaq Thursday’s low and Monday’s high is the key short-term support and resistance areas to watch. On the RUT it is Monday’s high and low. Stocks to Watch on Tuesday Leading Stocks Breaking Above 30 DMA ESRX...PRGO...SHW...UTX Support Bounce FLS...VMI...MTD...AZO...SYNA...UNP...BNI At Resistance CLI...AVP...DB...CRDN...SPG...DRIV Stock Commentary PCLN pulled back at its 30 DMA for the second straight day. ONXX rose further confirming its breakout out of head and shoulders bottom with price target of $34.50 NVDA pulled back after rising to 9.10 and did not breakout above $9.11…pulling back from its 50 DMA to the support of its 30 DMA. Monday’s Action Moving Up: ANR, BTU, AEM GDX, POT, CF, CNX, BUCY, ONXX, ESRX, STRA, HANS Moving Down: FSLR, BIDU, GS, MA, DECK, LAMR, V, MER, PNRA, NIHD, LDK, NDAQ, ZION, KMT, JASO, RYS, AMZN, MS, KBE Intermediate Term Market Trend: Down Short Term Market Trend: Down