Tuesday, April 27, 2010

SPX Breaks Support Amid Concerns of European Debt Issues...

DJIA                            10.991.99 -213.04 -1.90%
SP500                           1,183.71 -28.34 -2.34%
COMPQ                        2,471.47 -51.48 -2.04%
Russell 2000                  721.27   -17.59 -2.38%

Exchange                   NYSE              NASD
Advancing                     500                 535
Declining                    2,604              2,218

Oil         $82.44         -1.76
Gold    $1,161.70      +8.20
SOX      386.78         -14.03
VIX          22.81         +5.34

Index  Direction       Confirmation
VIX      Up Yes – SPX
SOX    Down Yes – COMPQ

Key Resistance Levels
1,200 = Jul 2008 support
1,216 = Fib extension
Key Support Levels
1,178 = Fib extension
1,155 = 1,119 BO chart target – Dec 23

The SPX broke through its 1,200 support level and fell to its 1,178 support area closing at 1,183.71. The SPX broke the low of the high day which represents an exit for many short term traders. Prices moved lower against the back drop of worries over the debt crisis in Europe, a falling Euro, a rising dollar and falling interest rates in the U.S. Strong earnings and rising consumer confidence were not enough to counter today's selling.

MMM, DD, SWK and X reported better than expected earnings and closed lower than their opening price because of the broad based selling on Tuesday.
Look at these Charts
(click image to enlarge)
Key Earnings to Watch:
Monday – CNI, HUM, JEC, KSU, EL, LXK, MHP, NOV, ODP, RSH,TSM, TXN,
Tuesday – MMM, ADP, AFL, DD, F, JBLU, LIFE, MHS, NEM, NSC, NUS, PNRA, LCC, SWK, UAUA, X
Wednesday – AKAM, ATI, APA, BIDU, BKC, CME, CERN, CLF, COP, DOW, ESRX, DAVE, FSLR, GMCR, HES, ILMN, K, LOGI, ORLY, OII, POT, RCL, HOT, VAR, VRSN, V, WLT, WLP, XLNX
Thursday – AET, AEM, AGN, AMX, BDX, BMY, CAM, CELG, CVX, XRAY, DLB, EXPE, XOM, JRCC, KLAC, MXIM, WFR, MET, PG, SPG, SWN, VPRT
Friday – AVP, DISCA

Guidance:

Monday's potential bearish harami was confirmed on Tuesday and did represent a short term exit for some short term traders. Even though Tuesday's move is a counter trend against the intermediate term up trend, be willing to enter bearish trades in accordance with your rules. If 1,178 support breaks, expect price to drop to the next support level at 1,155.

Monday's pull back setups formed into classic bull flag patterns on Tuesday. Be prepared to trade a support bounce on up trending stocks making higher highs and pulling back to higher lows.

Continue to trade with the trend. Be mentally flexible and be willing to trade when your entry and exit signals appear.

The intermediate term chart target is still 1,255 in approximately nine weeks after the 1,150 breakout on March 16.

The VIX rose +5.34 and did confirm the move down on Tuesday.

The short term trend is down.
The four-month trend is up.
The twelve-month trend is up.

Continue to focus on and trade setups on the charts of the stocks you watch trade with the trend and follow your rules.

Continue to adjust stops according to your rules.
AAPL -7.46
QCOM -0.19
GOOG -2.58
BIDU -20.74
NDX 100 stocks stronger than the NDX include: PPDI, CHKP, GRMN, VRTX, XRAY, ILMN, GENZ, HSIC, FLIR, BIIB, ESRX, HOLX, GILD, GOOG, QCOM and ERTS.

Stocks to Watch on Wednesday
Holding Above 30 DMA
NFLX, WHR, UNP, CAT, V, URE, DHR, JEC, USD, SNDK, FLS, AMD, MA, ZION, BKC, MCD, GME, TSL, BYI, SYNA, ATW, SWK, ACN, HLF, ICE, PCLN, PCP, SPG, DECK, GES, GR, BA, ATI, UNG
Moving Above 30 DMA = 2
FAZ, MYGN
Moving Below 30 DMA = 16
AMX, CAM, CHL, HANS, SWN, FAS, UYG, CREE, DE, DOW, BUCY, UAUA, WLT, BAC, WFC, CLF
Staying Below 30 DMA
MHS, WCG, USO, ESI, GMCR, GS, FCX, X, WMT, PWRD, AGU, IPI, POT, MOS

Intermediate Term Market Trend: Up
Short Term Market Trend: Down

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