VIX Closes at 48, SPX Down 79 Points, SPY Heaviest Volume in Over Two Years...

We had a great discussion with over 490 traders this evening on support and resistance, support and resistance measuring targets, channels, fibonacci extension price targets, VIX above 25, the Market Forecast green line, on being prepared for a support bounce and how to use these concepts in managing and exiting trades.  We also discussed the importance of learning from the past two weeks and making changes moving forward that will allow to achieve better results.

The price action said it all.  S & P downgrade of U.S. long term bonds leads to rise in bonds, yes a rise in bonds, but a massive selloff in stocks.  All 100 NDX stocks have fallen below their 30 DMA.

(click image to enlarge)

INDU -634.76, -5.55%
SPX -79.92, -6.66%
NDX -134.09, -6.11%
COMPQ -174.72, -6.90%
RUT -63.67, -8.91%

XLF -1.27, -9.48%

The ES support levels that I gave yesterday in the S & P Wrap and in Chart Signals this morning 1,160, 1,147, 1,134 and 1,108 were all hit except 1.108 with a close at 1,109.75.

After hours 1,108 is broken with the ES at 1,103.

Next levels of ES support:  1,088, 1,067, 1,047, 1,026

Breadth collapsed as decliners led advancers 67.67 to 1 on the NYSE and 20.76 to 1 on the NASDAQ …

Exchange       NYSE        NASDAQ

Advancers          46              125  

Decliners        3,113           2,595

Index         Change    Close    Direction    Confirmation

VIX             +16.00       48.00       Up              Yes – SPX

SOX            -18.89     331.33       Down         Yes – COMPQ

Leading stocks > +2% on Monday included FAZ, TLT

Losing stocks < -10.0% included FAS, BAC, ANR, URE, C, LDK, AKS, MCP, PCX, UCO, CROX, IL, STI, TPX, JDSU, FWLT, ANF, X, CIEN, ATI, COH, HLF, DECK, CLF, ZAGG, A, CAM, LVS, TSL, NDAQ, DOW, GES

Interest rates TNX closed -2.19 at 23.39, bond ETF TLT rose 3.23 cents and Financials XLF was down $1.27.  The Euro moved down 115 pips to close at 1.4175 at 5 pm on Monday.

SPX

Resistance: 1,134, 1,146, 1,158

Support: 1,119, 1,103, 1,080

The short term 3 day trend is down.

The six-month trend is down.

The twelve-month trend is neutral.

Trade with the trend of the chart you are trading.

Bullish entry signal is a bounce off support and a break above the high of the low day or a break out of horizontal resistance.

Bearish entry signal is a break of short term support or a bounce down from the 30 DMA or other resistance.

AAPL -20.41 large black candle, close below 30 DMA

AMZN -9.00 – high wave candle, below 30 DMA

BIDU -10.54 – inverted hammer, below 30 DMA

GOOG -33.02 – large black candle, close below 30 DMA

NFLX -14.47 – high wave candle, below 30 DMA

PCLN -22.81 – inverted hammer, close below 30 DMA

QCOM -3.73 – large black candle, below 30 DMA

NDX 100 stocks stronger than the NDX include ORLY, GILD and MXIM.

Stocks weaker than the NDX include SIRI, SHLD, VMED, TEVA, JOYG, STX, CTXS, MU, CTSH and WYNN.

Stocks to Watch on Tuesday

Holding Above 30 DMA

FAZ, TLT

Moving Above 30 DMA = 0

Moving Below 30 DMA = 3

CROX, GMCR, HLF

Staying Below 30 DMA

CHL, CAM, CDE, CF, CMG, CREE, DECK, IAG, LVS, MCP, MHS, MOS, SLW, SNDK, SOHU, SWKS, TPX, V, WTW, ESI, NTES, ANF, ATW, COH, FCX, GS, POT, SLB, WLT, NKE, SINA, SWN, ACN, AGU, DOW, UCO, UNP, VMW, CLF, NGLS, ANR, ATI, CAT, CIEN, CRM, CRUS, CY, DLR, FAS, ICE, JNPR, LDK, NDAQ, SMH, STI, TIF, URE, WDC, AKS, CSTR, DE, PCX, TBT, X, ZION, KKD, NETL, DHR, FFIV, SWK, UNG, ARUN, RVBD, HUM, ENTR, INFA, A, F, GES, HAS, BAC, TSL, UAL, VECO, NVDA, FWLT, JDSU, GLW, IL

Intermediate Term Market Trend: Down

Short Term Market Trend: Down