Yellow Alert Turns to Red...

Stocks broke the low of the high day on Thursday leading to lower prices on the last day of trading before the three-day July 4 Independence Day holiday weekend. DJIA - -223.32, -2.62% SP500 - 26.91, -2.91% NASDAQ Comp. - 49.20, -2.66% Russell 2000 - 20.25, -3.91% Exchange NYSE NASD Advancing 512 454 Declining 2,440 2,246 Oil $66.73 -$2.58 Gold $930.70 -$10.30 SOX 263.81 -3.21 VIX 27.95 +1.73 The VIX moved up and did confirm the move down in the SPX on Thursday. Strongest Sectors: XLP -2.10%...XLV -2.39%...XLK -2.52% Weakest Sectors: XLY -4.05%...XLE -4.01%...XLF -3.46% All nine sectors moved lower on Thursday. Consumer Staples, Healthcare, Technology, Material and Utilities were stronger than the SPX -2.91%. Financial stocks weaker than XLF -3.45%: PRU, SPG, AFL, MET, RF, IVZ, MS, TRV, JPM, WFC, TROW, ALL, CB, BK, PNC, AOC and ETFs UYG and FAS. Tech stocks weaker than XLK -2.52%: ADBE, ADP, ORCL, DELL, IBM, GLW, MSFT, EMC, YHOO and EBAY. Sector Watch Up Trending: Horizontal Breakout: XLB, XLK, XLY Sideways: XLE, XLV, XLF, XLP, XLI, XLU Down Trending: SPX Key resistance levels: 908 = 50 DMA 920 = horizontal end of May high 930 = horizontal 944 – 956 = January/June horizontal 962 = 161.8% Fib extension Key support levels: 888 = June 22 weekly low 887 = 200 DMA 875 = horizontal The broad indices as well as many individual stocks broke the low of the high day as our Yellow Alert turned red. A potential exit signal for short term traders. The SPX broke the support of the 50 DMA and the S1 level of June 25 to close at 896. The sell off was broad but on light volume as DJIA volume was a below average 157 million shares. This sell off appears to be an absence of buyers rather than the sellers in strong control. This is not overly surprising in front of a three day weekend as many short term traders like to be in cash over long weekends. We’ll see on Monday if buyers reappear. The SPX is near horizontal support levels of the past 8 weeks. The red momentum line is in the lower reversal zone suggesting approximately two out of three chances for a technical support bounce on Monday. Stocks to Watch on Monday Leading Stocks Holding Above 30 DMA BIDU, VPRT, K, DV, CPLA, SYNA, BDX, AAPL, ORCL, DECK, CPLA, DV, STRA, GILD, ACN, APEI, PSYS, ESRX, NFLX, BYI, MHS, NTLS, BKC, HDB, SLGN, USD, AMED, AMX, CTSH, HLF, GMCR, Moving Above 30 DMA = 1 FAZ Moving Below 30 DMA = 19 ALGT, CBST, CHL, ESI, GES, GXDX, ICE, JCOM, JW.A, PCLN, PETS, PPD, TDG, WCG, WRC, GR. JOYG, MCD, TRLG Staying Below 30 DMA AMZN, MYGN, PWR, X, BAP, GPRO, JEC, NIHD, SNHY, UYG, BLUD, RBN, AFAM, ATW, BIIB, FLS, VAR, PCP, SWN, MUR, RIMM, SPWRA, CAM, CLB, MOS, EBAY, FAS, MON, RCI, SNA, URE, DLTR, EZPW, WAB, FSLR, WMT, DLB, JOSB, HANS, GME Intermediate Term Market Trend: Neutral Short Term Market Trend: Down