SPX, DJIA & RUT Break Support...Nasdaq Holds

DJIA - 297.81, -3.79% SP500 - 37.67, -4.56% NASDAQ Comp. - 63.70, -4.15% Russell 2000 - 19.46, -4.34% Exchange NYSE NASD Advancing 357 416 Declining 3,453 2,361 Oil $34.93 -$2.58 Gold $967.00 +$25.50 SOX 205.87 -14.68 VIX 48.66 +5.73 The VIX moved up confirming the move down in the SPX on Friday. Strongest Sectors: XLP -1.45%...XLV -1.73%...XLY -3.79% Weakest Sectors: XLF -9.94%...XLY -6.92%...XLP -5.06% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK Down Trending: XLF Sellers took over on Tuesday after the three-day President’s Day weekend. Bullish patterns and candles from Thursday which did not confirm on Friday, failed to confirm again on Tuesday. All sectors were lower as Financial Sector etf, XLF led the market lower falling another -9.94%. Bank stocks STT, KEY, USB, WFC, ZION, C, JPM, and BAC all were down more than 10% on Tuesday. Transports dropped -5.20% making a new 52 week low. Rail stocks, BNI, CSX, NSC and UNP all moved lower. Oil fell to another low while gold reached its highest level in seven months as gold stocks GDX, GOLD and AEM also moved higher. The SPX broke below January’s short-term support levels by 1.88% and is still 48 points above its November low. The DJIA moved lower on average volume while breaking well below January’s lows, closed 103 points or just 1.38% above it’s November lows. The Nasdaq is still above its Feb 2 short-term support low. AKAM formed a black candle and moved to the support level of its horizontal bull flag…it is above the S1 level of its Feb 5 candle. AMZN formed a doji and found support at the S2 level of its Feb 5 large white candle…today is the new low day in its current bull flag. FOSL, MDT, TEVA and WMT all moved higher on better than expected earnings reported before the open on Tuesday. Index Commentary The DJIA formed a large black candle which fell below short-term support of 7,693. The SPX formed a large black candle. The Nasdaq gaped lower and formed a black candle breaking last Thursday’s support of 1,495…short-term support is 1, 460. The RUT formed a large black candle…closed just below its Jan horizontal support of 432. Stock Commentary None of the 22 Bull Flags that we selected from the NDX 100 on Thursday night moved higher on Tuesday. All moved lower still in their bull flag patterns, all forming a new low day. What to do now? Since today is a new low day, watch for a break above the high of the low day on Wednesday. If they don’t bounce don’t trade them yet. Here is the list: CHKP, DISH, EXPE, HANS, ILMN, LLTC, MRVL, MXIM, STLD, XLNX, VRTX, AAPL, AKAM, BIIB, GILD, AMZN, CEPH, GENZ, GOOG, JAVA, RYAAY, SYMC Steel stocks STLD, NUE and SCHN in bull flag pull backs fell to a new low day in the pull back. Coal stocks KOL, BTU, CNX, FCL, JRCC, MEE and WLT all formed a new low day in their pullbacks. Semiconductor stocks ALTR, LLTC, MRVL, NSM, NVLS, TXN and XLNX pulled back and formed a new low day. Earnings Tuesday, Feb 17 AMED +0.98 beat +0.91…moved lower FOSL +0.69 inline +0.69…moved higher MDT +0.71 beat +0.70…moved higher RJET +0.56 beat +0.47…moved lower TEVA +0.76 beat +0.73…moved higher RIG +3.69 below +3.70…moved lower WMT +1.03 beat +0.99…moved higher AXYS +0.59 below +0.61 CHK +0.73 below +0.74 LZB -1.25 below -0.10 UPL +0.43 below +0.48 Numbers exclude non-recurring items Wednesday, Feb 18 BMO – CMCSA, DE, GT, OMX, STP AMC – AAP, AEM, CAR, BIDU, NILE, DENN, DBRN, HPQ, NHP, NTRI, OII, ORLY, PAAS, PCLN, SNPS, WFMI Thursday, Feb 19 BMO – APA, CCC, CTL, DSX, EV, EXPE, GM, GG, HOS, MGM, NEM, PDCO, PNCL, RS, SPAR, S, TRAD, WST, XTO AMC – BUCY, CECO, CYH, RIO, DRYS, HE, JCOM, OIS, OSIP, RRGB, TSO, VLCMWBMD Fri Feb 20 BMO – ABX, JCP, LPNT, LOW, Learn the Discipline The Model Portfolio was stopped out of positions in ATW, AMX, EBAY, FLS, NIHD and PCLN on Tuesday. We entered no new positions. There are eight open positions. Stocks to Watch on Wednesday Leading Stocks: Holding Above 30 DMA NFLX, ESI, MYGN, SYNA, APEI, HANS, WRC, GMCR, PCP, GES, MHS, MOS, TDG, AAPL, BIIB, GPRO, WCG, VAR, VPRT, AMZN, SLGN, RBN, AMED, DLB, PSYS, CTSH, ESRX, CPLA, GXDX Moving Above 30 DMA = 1 DV Moving Below 30 DMA = 18 ATW, BIDU, BLUD, CHL, FLS, GILD, GME, ICE, JCOM, JW.A, MUR, ORCL, PCLN, RCI, SWN, GR, MON, SPWRA Staying Below 30 DMA FSLR, HLF, EBAY, AMX, STRA, PCR, PWR, RIMM, BDX, BYI, CAM, PPD, ACN, NIHD, SNHY, JOYG, CLB, DLTR, K, BKC, JOSB, JEC, PETS, NTLS, BAP, HDB, CBST, DECK, SNA, AFAM, EZPW, WAB, ALGT, AXYS Tuesday’s Action (=> +0.70 or -0.70) Moving Up: GOLD, AFAM, GDX Moving Down: FSLR, GS, POT, MA, SCHN, CLF, ANR, MOS, AGU, X, BTU, CF, CNX, NUE, MON, MS, PCLN, STRA, SOHU, IPI, NIHD, MEE, FWLT, NDAQ, KBE, ESRX, V, ZION, ONXX, INFY, KRE, ADM, HANS, DRYS, KMT, SINA, PNTRA, BRCM, EBAY, LAMR, GRMN Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Down