SPX Breaks Support...

DJIA - 200.72, -2.35% SP500 - 28.19, -3.06% NASDAQ Comp. - 61.28, -3.35% Russell 2000 - 19.91, -3.88% Exchange NYSE NASD Advancing 326 443 Declining 2,709 2,288 Oil $66.93 -$2.62 Gold $920.40 -$15.20 SOX 254.60 -9.87 VIX 31.17 +3.18 The VIX moved up and did confirm the move down in the SPX on Monday. Strongest Sectors: XLU -0.29%...XLP -0.39%...XLV -1.80% Weakest Sectors: XLF -5.81%...XLB -5.06%...XLE -5.00% All nine sectors moved lower on Monday. Utilities, Consumer Staples, Healthcare Technology and Consumer Discretionary were down but were down less than the SPX -3.06%. Among financial stocks AOC, CB and MMC were down less than 2%. Among tech stocks VZ and T were up for the day while GLW, IBM, ADP, AMT AAPL and HPQ were down less than 2%. Sector Watch Up Trending: Horizontal Breakout: XLB, XLK, XLY, XLE Sideways: XLV, XLF, XLP, XLI, XLU Down Trending: SPX Key resistance levels: 897 = 50 DMA 903 – 905 = horizontal, 200 DMA & Monday’s R1 920 - 930 = horizontal 944 – 956 = January/June horizontal 962 = 161.8% Fib extension Key support levels: 875 = horizontal The SPX traded a 25 point range to the downside on Monday breaking its 903 horizontal support and 200 DMA and its 897 50 DMA level. Next level of support is the 875 horizontal support level. Monday’s sell off was attributed to the World Bank releasing its forecast that the world economy will contract by 2.9% in 2009 lower than its 1.7% forecast released in March. On Tuesday morning the Existing Home Sales report is expected to rise to 4.85 M. This could set the trading tone for a potential support bounce if it is positive or a continuation of Monday’s drop if the report is below expectations. Stay tuned and trade accordingly... Oil prices fell leading oil and energy stocks lower, XLE -5.00%, on the forecast of larger estimated economic contraction. Educational stocks APEI, APOL, CPLA, DV, ESI, COCO, and STRA did rollover as they bounced down from resistance and CECO and EDU gained 3 and 8 cents respectively. Index Commentary The DJIA moved formed a large black candle…broke below its 50 DMA…three month chart target 10,340…volume was an average 291 million shares…closed below its 20, 30, 50 and 200 DMA. The SPX formed a spinning top…broke below it 200 and 50 DMA …3 month chart target of 1,075…closed below its 20, 30, 50 and 200 DMA. The Nasdaq formed a large black candle…broke below its 20 and 30 DMA…3 month chart target of 2,065…closed above its 50 and 200 DMA. The RUT formed a large black candle…broke below its 30 and 50 DMA….3 month chart target 606…closed above its 200 DMA. At the Open on Monday SPY – below 50 DMA QQQQ – below 30 DMA FUQI – above 20 DMA AAPL – above 30 DMA NFLX – above 30 DMA QCOM – above 30 DMA SHLD – above 30 DMA MRVL – at 30 DMA STT – at 30 DMA ADBE – below 30 DMA PCLN – below 30 DMA USD – below 30 DMA ICE – below 30 DMA TRLG – below 30 DMA PRU – at 50 DMA FAS – below 50 DMA SPG – below 50 DMA URE – below 50 DMA Stocks to Watch on Tuesday Leading Stocks Holding Above 30 DMA BIDU, VPRT, BAP, GR, HDB, K, DV, AXYS, CPLA, SYNA, X, MCD, BDX, AAPL, GXDX, ORCL, WRC, DECK, CPLA, MYGN, DV, STRA, BLUD, GILD, JW.A, ACN, APEI, PSYS, CBST, ESRX, JCOM, NFLX, BYI, Moving Above 30 DMA = 1 FAZ Moving Below 30 DMA = 20 AFAM, AMZN, ATW, BAP, BIIB, FLS, GMCR, HLF, ICE, JEC, JOYG, MHS, NIHD, PCLN, PPD, RBN, SLGN, SNHY, USD, VAR Staying Below 30 DMA CHL, ESI, PCP, SWN, MUR, RIMM, SPWRA, AMX, ATW, BYI, CAM, CLB, GES, MOS, PWR, SLGN, CTSH, EBAY, FAS, MON, PCP, RCI, SNA, TDG, TRLG, URE, UYG, DLTR, EZPW, WAB, FSLR, WCG, WMT, DLB, JOSB, NTLS, HANS, AMED, PETS, ALGT, GME, GPRO, BKC Intermediate Term Market Trend: Neutral Short Term Market Trend: Down