Yellow Alert Turns to Red as Stocks Break the Low of the High Day

DJIA - 289.60, -3.56% SP500 - 37.21, -4.28% NASDAQ Comp. - 54.86, -3.88% Russell 2000 - 26.88, -5.61% Exchange NYSE NASD Advancing 461 457 Declining 3,327 2,321 Oil $45.88 -$4.45 Gold $887.20 +$19.40 SOX 240.19 -14.62 VIX 39.18 +5.24 The VIX moved up and did confirm the move down in the SPX on Monday. Strongest Sectors: XLU -1.12%...XLV -1.94%...XLP -1.95% Weakest Sectors: XLF -11.16%...XLE -5.53%...XLB -4.62% All Sectors moved lower on Monday led by XLF -11.16%. Utilities, Healthcare, Consumer Staples, Technology and Consumer Discretionary were stronger than the SPX. Financial stocks weaker than XLF, -11.16% include: BAC, RF, C, KEY, WFC, PRU, USB, ZION, AFL, AXP, SPG and PNC. The Tech Sector XLK was down -3.18%. Leading tech stocks stronger than XLK –3.18%: IBM, ORCL, ADP, EBAY, AAPL, T, EMC, VZ, SYMC and MSFT. The SOX -5.74%, was down more than the SPX, a confirming sign of weakness. Sector Watch Up Trending: Sideways: XLE, XLY, XLV, XLK, XLB Down Trending: XLF, XLP, XLI, XLU We put you on Yellow Alert and the market opened lower and traded down all day long. Our post on Friday elaborated the reasons for the Yellow Alert. Click here to review those technical factors: http://chartsignals.blogspot.com/2009/04/spinning-top-on-friday.html Short term traders may have had an exit signal on their trades or an entry signal for counter trend trades. Intermediate term traders may be holding as Monday’s pullback did not break intermediate term support. With the the thrust pause cycle of the past 6 weeks lasting one to days up and then one to two days down...maintain your focus on Tuesday for any signs of a support bounce. The red line in the Marke t Forecast indicator is in the lower reversal zone indicating approximately a 65% of a technicacl bounce within one day. The SPX, Nasdaq and RUT all closed above the short term support of their 20 DMA. The DJIA which closed just below its 20 DMA traded 453 million shares down from 537 million shares on Friday. Index Commentary The DJIA formed a large black candle and closed below the low of the high day…volume decreased to 453 million shares…closed above its 30 and 50 DMA. The SPX formed a large black candle and closed below the low of the high day forming an evening star pattern that we alerted to on Friday…closed above its 20, 30 and 50 DMA. The Nasdaq formed a large black candle closing below the low of the high day …closed above its 20, 30 and 50 DMA. The RUT formed a large black candle closing below the low of the high day…closed above its 20, 30 and 50 DMA At the Open on Tuesday SPY – large black candle DECK – large black candle bull flag SNDA – large black candle, bull flag EBAY – spinning top in bull flag SCHN – black candle broke low of high day GME – hammer in bull flag SHLD – inside day close above 200 DMA ADS – black candle in bull flag STT – black candle in bull flag AG – black candle in bull flag XRT – evening star USD – confirmed bearish harami URE – break low of high day WYNN – black candle break low of high day LEAP – break horizontal support and 200 DMA FAZ – whit candle break high of low day ISRG – shooting star…bearish harami Stocks to Watch on Tuesday Leading Stocks Holding Above 30 DMA BIDU, CLB, NFLX, DLTR, ICE, ALGT, DLB, JEC, PWR, VPRT, AMZN, USD, AAPL, CTSH, AXYS, BAP, CAM, GMCR, GPRO, JCOM, JOSB, ATW, GR, SYNA, EBAY, GES, SNA, ORCL, WRC, DECK, HDB, PCP, UYG, FSLR, GME, WCG, RIMM, X, BDX, BYI, CBST, EZPW, HLF, MYGN, AMX, MHS, WAB, FAS, AFAM, CHL, JW.A, K, RBN, ESRX, PCLN, URE, VAR, PCR, PPD, HANS, PETS, STRA, SWN, MCD, CPLA Moving Above 30 DMA = 0 Moving Below 30 DMA = 10 AMED, DV, FLS, MUR, SLGN, TDG, NIHD, SNHY, SPWRA, JOYG Staying Below 30 DMA BIIB, MOS, NTLS, RCI, MON, WMT, GILD, BKC, APEI, BLUD, ESI, GXDX, ACN, PSYS Intermediate Term Market Trend: Neutral Short Term Market Trend: Down