Markets Break Support

DJIA - 344.65, -2.99% SP500 - 38.15, -2.99% NASDAQ Comp. - 74.69, -3.20% Russell 2000 - 23.29, -3.14% Exchange NYSE NASD Advancing 522 576 Declining 2,568 2,281 Oil $107.89 -$1.46 Gold $803.20 -$5.00 $SOX 324.08 -11.46 Strongest Sectors: XLP -0.64%...XLU -1.26%...XLV -2.20% Weakest Sectors: XLF -4.90%...XLK -3.58%...XLB -3.55% On Tuesday we wrote, “Should the other indices break their horizontal support levels, for the DJIA 11,300, the SPX 1,260 and the Nasdaq its 50 DMA at 2,334, it will shift our trend status to down.” Today these indices fell below their respective support levels and it is clear from looking at the charts that these three indices are down from four weeks ago. Accordingly as we stated on Tuesday we have changed our intermediate term trend status is down. It is also true that looking at the past 10 weeks on the chart one could come to the conclusion that the trend is sideways. We have changed our trend status to down due to direction of the past four weeks and the breaking of both horizontal and diagonal support. We also want to point out that this potential support break was visible on Tuesday and alerted readers that we would change our status if this condition was met. We hope you were watching for this break and were able to take advantage of the opportunity it presented. Each index formed a large black candle today, so keep in mind that the mid-section of Thursday's candle or the R1 level is now the short-term resistance that any rally must break through before the trend can reverse to up. Take notice that several sectors have also changed trend.

The Russell is the only broad index that is not currently in a down trend and a break below 715 will change our trend status as that price level will be a lower low.

Sector Watch Up Trending: XLP, XLY Sideways: XLF, XLI, XLV Down Trending: XLE, XLU, XLB, XLK

Index Commentary The DJIA failed to confirm Wednesday’s hammer, broke support at 11,300, fell below its 30 and 50 DMA and is now trading below its 20, 30, 50 and 200 DMA. The SPX failed to confirm Wednesday’s hammer, broke support at 1,260, fell below its 50 DMA and is now trading below its 20, 30, 50 and 200 DMA. The Nasdaq fell below its 50 DMA support at 2,334 and is trading below its 20, 30, 50 and 200 DMA. The RUT fell below its 20 and 30 DMA and found support at its 200 DMA and its recent 716 horizontal support. The RUT is at its 200 DMA and still above its 50 DMA. This is a potential M top pattern. Thursday’s Action Moving Up: STRA Moving Down: BIDU, CF, FSLR, MA, ANR, CLF, AAPL, DECK, IBM, PNRA, AMZN, MTL, GS, X, MOS, POT, SCHN, MEE, MON, SOHU, DRYS, BUCY, V, MER, IPI, AGU, FWLT, CELG, ESRX, KMT, NIHD, MS, NDAQ, WRC, HANS, FMCN, INFY, LCC, AMLN, SNDK, UAUA, BTU, SINA, NUE, GDX, AEM, GRMN, FNM, LEH, JASO Intermediate Term Market Trend: Down Short Term Market Trend: Down