SPX Breaks Support...Falls to Next Support Level...

DJIA - 186.06, -2.00% SP500 - 24.36, -2.43% NASDAQ Comp. - 54.68, -2.75% Russell 2000 - 15.72, -2.79% Exchange NYSE NASD Advancing 339 488 Declining 2,736 2,232 Oil $66.75 -$0.76 Gold $934.30 -$12.70 SOX 285.92 -8.73 VIX 27.89 +3.62 The VIX moved up and did confirm the move down in the SPX on Monday. The SOX confirmed the move down in the Nasdaq. Strongest Sectors: XLV -0.39%...XLP -1.02%...XLU -1.38% Weakest Sectors: XLF -4.21%...XLB -3.79%...XLE -3.23% All nine sectors are moving lower on Monday. Healthcare, Consumer Staples, Utilities and Technology were stronger than the SPX -2.43%. Financial stocks stronger than XLF -4.21%: AOC, C, MMC, TRV, CB, NTRS, BK, GS, STT, ALL, ICE, TROW, JPM, CME, AXP and MS. Tech stocks stronger than XLK -2.38%: AMT, IBM, T, INTC, MSFT, DELL, HPQ and ADP. Sector Watch Up Trending: XLK, XLB, XLY Horizontal Breakout: XLV Sideways: XLE, XLF, XLP, XLI, XLU Down Trending: SPX Key resistance levels: 992 = last two weeks low 1,007 = Nov horizontal resistance 1,025 = 950 Chart target 1,044 = October horizontal Key support levels: 980 = last broken resistance now support 962 = July 23 S1, 30 DMA, 38.2% Fib extension 944 – 956 = old January/June/July resistance The SPX opened lower as the ES futures traded lower Sunday night. Within 15 minutes the SPX not only broke the 992 – 996 support zone but fell to the next support level at 980 and spent much until 3 pm ET trading between 980 and 982. The next level of support if the 980 level is broken is the 962 area. Healthcare stocks HUM, MHS and ESRX moved higher on the relative strength of healtcare stocks. XLV was the leading sector. The SPX fell from Thursday’s closing level at 1,013 to the 996 area within the first hour of trading and then traded in a tight range between 999 and 995 until the final half hour of trading when it rose to close at 1,004.09. DJIA volume was an average 207 million shares. All of the larger NDX 100 stocks, AAPL, BIDU, GOOG, MSFT, CSCO, ORCL, INTC, QCOM and TEVA all moved lower on Monday and some more than 4%. Guidance: The intermediate term trend is still up, but the SPX fell to the 980 support area exactly as the chart did suggest. If 980 fails to hold be prepared for a break to the 965 support area. Here is a review of the stocks from Friday’s post that we covered for consideration on Monday, August 17. See Friday’s post for charts and descriptions of the opportunity we saw. Up trending stocks AAPL, ACN, CHL, GOOG, PCLN, PWRD and X all moved lower in counter trend moves on Monday as the market moved down. Weaker to down trending stocks AKAM, BRCM, EXPD, FLIR, FSLR, GENZ, LRCX, SYNA and VRTX moved lower as the market broke support. ESRX moved up 17 cents on the relative strength of healthcare stocks. Stocks with sideways trend characteristics either near support or at resistance AMZN, BIDU, DECK, ESI, GES, ICE, JEC, QCOM, SWN, TRLG and VPRT all moved lower. Finally, if you are using our Short Term Trend Reversal Strategy, see our October 26 post by clicking here: http://chartsignals.blogspot.com/2008/10/reversal-trading-strategy-overview.html The stocks meeting these criteria: AMX, CAM, MOS, NFLX, PSYS, SNA moved lower. MHS gained 82 cents on the relative strength of healthcare. Stocks to Watch on Tuesday Leading Stocks Holding Above 30 DMA PWRD, CPLA, ACN, PSYS, MHS, AMED, AMX, BYI, CTSH, AAPL, PETS, USD, FUQI, JOSB, BAP, CAM, DLB, EBAY, FAS, NIHD, PCLN, SNHY, TDG, UYG, WRC, ESI, MOS, WCG, SNA, X, CBST, WAB, BLUD, CLB, JOYG, PCP, URE, WMT, EZPW, RBN, AFAM, CHL, FLS, VAR, BKC, DV, GR, CLB, HANS, JEC, GME, HLF, BIIB, VPRT, RCI Moving Above 30 DMA = 0 Moving Below 30 DMA = 14 ATW, BIDU, DECK, DLTR, GES, HDB, JCOM, MUR, NFLX, ORCL, SLGN, STRA, MON, SPWRA Staying Below 30 DMA AMZN, GMCR, GXDX, PPD, PWR, SWN, TRLG, MYGN, ESRX, RIMM, ALGT, APEI, GILD, K, FSLR, GPRO, SYNA, BDX, JW.A, MCD, FAZ, NTLS, ICE Intermediate Term Market Trend: SPX, DJIA, RUT = Neutral, Nasdaq = Up Short Term Market Trend: Down