EU Fears (Speculation) Sends Euro, Stocks Lower Again...

Another speculative selloff on Tuesday.  All nine sectors moved lower on Tuesday. XLP -1.74%, XLV -1.91% and XLU -2.09% were the strongest sectors.

The Euro continued to fall Monday evening and was already down 221 pips at 9:30 am EDT when U.S. markets opened.  The ES SP e-mini futures were down -31.75 from their 4:15 pm EDT close on Monday.  Traders appear to be spooked by Greece’s Prime Minister’s call for referendum vote on the EU debt deal.

The Euro was down 160 pips to 1.3695 at 5 pm EDT up from its overnight low of 1.3670 at 6:28 am EDT.  TNX closed down -1.74 at 20.01.  TLT was up +3.57.  Financials XLF was down 63 cents.

The broad indexes formed day three of a bull flag pattern with the SPX reaching a 78.6% Fib retracement from the Oct 18 low.  The broad indexes moved lower with the INDU -2.48%, NDX -2.61%, SPX -2.79%, COMPQ -2.89%, and RUT -3.67%.  The SPX moved down -35.02 to close at 1,218.28.

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Typically following a strong down day in a potential bull flag formation a smaller range day will form in the form of a hammer, doji, bullish harami or other bullish candle pattern that sets up a potential entry signal at a lower level than the large down day’s high.  We see that type of formation on the SPY and many individual stocks on Tuesday.

The two day FOMC meeting announcement will be released about 2:15 pm EDT on Wednesday.

Our Monday night paper trade did not fill on Tuesday as HON moved lower.  Time to adjust the HON order based on Tuesday price candle: E = 52.28, S = 50.16, T2 = 56.25

New paper trade X = E = 25.39, S = 23.14, T2 = 31.80

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The VIX moved up +4.81 to 34.77. 

AAPL, AMZN, BIDU, GOOG, PCLN and QCOM moved lower on Tuesday.  QCOM reports earnings after the close on Wednesday.

Breadth weakened as decliners led advancers 5.84 to 1 on the NYSE and 5.27 to 1 on the NASDAQ.

Exchange        NYSE        NASDAQ

Advancers          445              409

Decliners         2,603           2,158          

Leading stocks > +2% on Tuesday FAZ, TLT

Losing stocks < -2.0% included FAS, IL, PCX, ENTR, RCL, C, HLF, URE, RVBD, TBT, BAC, HAL, GS, KKD, VECO, LDK, F, ICE, TSL, NVDA, STI, JNPR, A, MOS, FWLT, GES, SINA, JDSU, GMCR, TPX, AKS, ZION, INFA, ANR, FCX, SWKS, POT, V, COH, TIF, X, SNDK, FFIV, ZAGG, SLB, ARUN, DECK, UCO, CAT, SWK, DE, SWN, SMH, GLW, UNP, NDAQ, CREE, ATI, NKE, CRUS, CSTR, CMG, NTES, CF, UAL, ESI, CRM, DHR, SOHU

NDX 100 stocks stronger than the NDX included EXPE, STX, ORLY, COST, SHLD, MAT, BBBY, GRMN, VMED and AMZN.

Stocks weaker than the NDX include HSIC, FSLR, MU, CSCO, MYL, NVDA, NWSA, ADSK, MCHP and SPLS.

Fifteen NDX stocks including AAPL, AMGN, BRCM, DELL, MSFT, NVDA, PCLN, WYNN and YHOO moved below their 30 DMA leaving 66 NDX stocks above the 30 DMA. 

Stocks to Watch on Wednesday

Holding Above 30 DMA = 66

IBM, ARUN, DECK, FFIV, SNDK, F, NKE, ANF, COH, ENTR, UNP, DHR, DOW, SMH, SWK, TIF, TPX, VMW, C, JNPR, NGLS, RCL, ZAGG, CAT, DLR,  HLF, LNKD, SWN, NTES, WLT, RVBD, SLB, UCO, AKS, FAS, GLW, GS, ZION, A, BAC, CIEN, URE, ATI, CF, CMG, DE, FCX, FWLT, GES, HUM, ANR, HAL, PCX, STI, CDE, CLF, CRUS, MCP, SLW, SOHU, TSL, CRM, JDSU, LDK, LVS, X

Moving Above 30 DMA = 1

TLT

Moving Below 30 DMA = 9

CSTR, ICE, IL, INFA, KKD, MOS, NDAQ, NVDA, V

Staying Below 30 DMA

CREE, ESI, POT, SINA, TBT, VECO, WDC, CHL, SWKS, UAL, CROX, FAZ, GMCR

Four Week Intermediate Term Market Trend: Up

Short Term Market Trend: Down