Yellow Alert Turns to Red...Again...

DJIA - 137.63, -1.71% SP500 - 17.23, -2.01% NASDAQ Comp. - 27.59, -1.67% Russell 2000 - 14.83, -3.17% Exchange NYSE NASD Advancing 1,186 916 Declining 2,533 1,870 Oil $49.41 -$0.64 Gold $891.20 -$3.80 SOX 250.00 -0.60 VIX 37.67 -0.14 The VIX moved down and did NOT confirm the move down in the SPX on Tuesday. Strongest Sectors: XLE -0.27%...XLV -0.45%...XLK -1.08% Weakest Sectors: XLF -6.59%...XLY -2.24%...XLB -1.86% All Sectors moved lower on Tuesday. The Financial Sector was the weakest sector with a -6.59% loss. Financial stocks stronger than -6.59% include: C, AOC, MMC, BK, TROW, CB, ALL, TRV, ICE, RF and SCHW. Leading tech stocks stronger than XLK at -1.08%: AMAT, TXN, EMC, CSCO, DELL, INTC, QCOM, IBM and ORCL. Sector Watch Up Trending: Sideways: XLE, XLY, XLV, XLK, XLB Down Trending: XLF, XLP, XLI, XLU Yellow Alert on Monday turned to Red giving a short term exit signal to some short term traders as indices broke below the low of the high day. The SPX broke below recent resistance now support and formed a morning star pattern. The trend is still up and today's action is still a pullback, not yet a trend change. The pattern of the past six weeks has been pause/pullback for two days following a strong move up. Watch to see if this pattern repeats and we see another short lived correction. Remember pullbacks that find support in up trends are potential entry opportunities. (click image to enlarge) Volume on the DJIA increased to 513 million shares up from 424 million shares on Monday. INTC released earnings after the close that beat both earnings and revenue estimates. On that positive the stock fell 5% in after hours trading. Apparently some analysts felt that INTC guidance was not detailed enough, even though the Company expected flat revenues from the first to second quarter, which in the current economic environment is considered a positive. We'll see if traders on Wednesday morning feel the same as Tuesday evening. Another excellent example of it's not the news, but institutional reaction to the news that counts. The SOX which was barely down on Tuesday, was also down in after-hours trading as other semiconductor stocks like BRCM and LLTC also moved lower. Watch INTC and the SOX in the morning to see if the sentiment is still negative. They will give strong clues to early trading in NASDAQ stocks. Index Commentary The DJIA formed a large black candle that confirmed Monday’s hanging man pattern as it broke the low of the high day…closed above its 20, 30 and 50 DMA…volume was 513 million shares. The SPX formed a large black candle that confirmed Monday’s hanging man pattern as it broke the low of the high day…closed above its 20, 30 and 50 DMA. The Nasdaq broke the low of the high day...closed above recent resistance…closed above its 20, 30 and 50 DMA. The RUT formed a large black candle that confirmed Monday’s hanging man pattern as it closed below the low of the high day… …closed above its 20, 30 and 50 DMA (click image to enlarge) At the Open on Wednesday SPY – breaks low of the high day DECK – doji SNDA – large black candle breaks low of high day CTSH – closes at low of Monday’s doji EBAY – closes at low of Monday’s doji SCHN – white bearish harami above horizontal breakout GME – breaks low of high day doji SHLD – inside day GS – breaks low of high day after announcing offering XRT – closes below low of high day doji on Monday USD – white candle following doji URE – breaks low of high day with close below horizontal resistance/support UYG – closes below low of high day WYNN – white candle new high close at horizontal resistance CELG – black candle after bear flag break LEAP – inside day after break of 30 DMA support FAZ – bullish harami Stocks to Watch on Wednesday Leading Stocks Holding Above 30 DMA BIDU, CLB, NFLX, DLTR, ICE, ALGT, DLB, JEC, PWR, VPRT, AMZN, USD, AAPL, CTSH, FLS, JOYG, AXYS, BAP, CAM, GMCR, GPRO, JCOM, JOSB, MUR, WMT, ATW, GR, BIIB, SLGN, SWN, SYNA, SNHY, EBAY, GES, SNA, ORCL, WRC, DECK, HDB, PCP, UYG, FSLR, GME, WCG, RIMM, X, BDX, BYI, CBST, EZPW, HLF, MYGN, MCD, AMX, MHS, WAB, FAS, AFAM, CHL, JW.A, K, MOS, NTLS, RBN, ESRX, PCLN, URE, GILD, AMED, VAR, PCR, PPD, MON, NIHD, SPWRA Moving Above 30 DMA = 0 Moving Below 30 DMA = 2 BKC, HANS Staying Below 30 DMA APEI, PETS, TDG, RCI, BLUD, DV, ESI, GXDX, STRA, CPLA, ACN, PSYS Intermediate Term Market Trend: Neutral Short Term Market Trend: Neutral