Stocks Give Back Gains on Economic Weakness

Monday, December 1, 2008 DJIA - 679.95, -7.70% SP500 - 80.03, -8.93% NASDAQ Comp. - 137.50, -8.95% Russell 2000 - 56.07, -11.85% Exchange NYSE NASD Advancing 502 466 Declining 3,329 2,445 Oil $49.28 -$5.15 Gold $774.60 -$41.60 SOX 183.24 -15.00 VIX 68.51 +13.23 Strongest Sectors: XLV -5.14%...XPI -5.53%...XLU -6.64% Weakest Sectors: XLF -16.67%...XLE -10.64%...XLY -8.74% Sector Watch Up Trending: Sideways: XLE, XLP, XLU Down Trending: XLF, XLY, XLV, XLI, XLB, XLK Concerns over weak retails sales over the Thanksgiving Holiday weekend had sellers in control from the opening and a series of economic reports kept the selling pressure up all day long as the broad indices gave back half of the gains the achieved over the past week. The SPX and RUT fell back below their Oct. 10 low and the Nasdaq which failed to close on Friday above its Oct. 10 low, fell below its Nov. 13 low. As we pointed out in our weekend post, each of the four indices had formed a bullish engulfing pattern on their weekly charts. In an intermediate term sideways trend, DJIA and SPX, a trader should be ready to close long positions as the market falls from resistance and initiate short positions. This is also true for intermediate term down trends with the Nasdaq and RUT. All sectors were lower on Monday. Oil and gold were also down big today and energy related and gold stocks fell with the rest of the market. The VIX confirmed today’s down move as it moved significantly higher. The broad indices and many stocks in down trends or trading ranges formed classic bullish exit signals and classic bearish entry signals on Monday. Review our Stocks to Watch on Tuesday list for current ideas. Index Commentary The DJIA gave formed a bearish engulfing patter and made a 50% Fibonacci retracement fro its recent low. ProphetCharts The SPX formed a evening star pattern and moved down to a 50% Fibonacci retracement. The Nasdaq formed a bearish engulfing pattern and moved down to the mid point between its 50% and 61.8% Fibonacci retracement. The RUT formed an evening star pattern and moved down to the mid point between its 50% and 61.8% Fibonacci retracement. Stocks to Watch on Tuesday Leading Stocks: Holding Above 30 DMA AXYS…AYE…DV…EZPW…MMM…PCLN…PPD…ASIA…BAP…CBST…DLTR…ESI…FLR…FSTR…TKC…JCOM…JEC…MTD…PCR Moving Above 30 DMA RCI Moving Below 30 DMA AFAM…AGN…AME…ANSS…AOB…ATK…B…CHTT…CL…CTSH…DGIT…ESRX…FLIR…IRIS…JW.A…LAYN…MIG…NIHD…NOV…OSIP…PCP…PETS…PRGO…RIO…RTN…SHW…SINA…SNA…SOHU…SWN…TEVA…VIVO…VMI…WAB…WMS Staying Below 30 DMA MYGN…GIS…AMX…BCR…CERN…CHU…GILD…HAS…LFC…PSSI…URBN Monday’s Action Moving Up: None Moving Down: BIDU, STRA, FSLR, MA, GS, CF, MON, DECK, PCLN, ZION, ESRX, AEM, SINA, POT, KRE, MOS, CNX, X, ANR, NUE, SCHN, GDX, CLF, SOHU, V, NIHD, MER, AGU, BTU, MS, MEE, KBE, NDAQ, HANS, UAUA, IPI, BUCY, ONXX, AMZN, RF, LDK, KMT, INFY, LAMR, DRYS, BRCM, COH, FWLT, GRMN, LCC, EBAY Intermediate Term Market Trend: Neutral – DJIA, Down – SPX, Nasdaq, RUT Short Term Market Trend: Neutral