SPX Breaks Support Falls to 1,041...

DJIA              9,870.30  -268.22   -2.65%
SP500           1,041.24    -33.33   -3.10%
COMPQ        2,135.18    -85.47   -3.85%
Russell 2000     615.96    -25.58   -3.99%

Exchange    NYSE     NASD
Advancing      260         294
Declining      2,853      2,410

Oil             $75.94   -2.31
Gold     $1,242.00  +3.80
SOX          337.67 -16.44VIX             34.13  +5.13

Index      Direction      Confirmation
VIX         Up                 Yes – SPX
SOX        Down            Yes – COMPQ


All of our bull flag setups moved lower which is why I teach wait for the break of the high of the low day.  FFIV and BA stopped out while HAS, ABC, CRUS, ILMN, NETL and NYX may have held depending on exactly where stops were placed. 

Flag setups ALK, HSY, SKX, AZO, NTAP, UNP, LCC, UAUA, CAL, VECO, AKAM, UCO, SNDK, CAT, UNG, CRM, ICE, NFLX, TIE, SBUX, AAP, GMCR, SWN, VMW, DLR, CMG, BIDU, DECK all moved lower with many breaking below their 30 DMA.

Remember the entry on a flag is a break above the high of the low day.  While it may seem improbable to have any support bounces on Wednesday, if a bounce does occur trade it according to your rules.  We'll find out if big money is still buying at the 1,040 support on Wednesday.
Guidance:
The SPX broke support at its 61.8% Fib level from its June 8 low and price then fell to its next support level at 1,041 a 100% retracement of its recent rally.  If 1,041 support breaks continue to trade to the downside.

I as wrote last night, "However the failure to make a higher high on Monday puts us on alert for a break of support" and "If support breaks trade the short term down trend."  This continues to be the right view for Wednesday morning.


If you had short term bullish profits you likely were stopped out on Tuesday.  Most up trending stocks in our watchlist have fallen back below their 30 DMA with 27 stocks in our watch list falling below on Tuesday.  Continue to protect profits on your short term trades.

Trade weak stocks down.

The VIX rose +5.13 and closed at 34.13.

The short term 3 day trend is down.
The six-month trend is neutral.
The twelve-month trend is up.

Continue to focus on and trade setups on the charts of the stocks you watch, trade with the trend of the chart and follow your rules.

AAPL -12.13
QCOM -0.90
GOOG -17.82
BIDU -6.87
NDX 100 stocks stronger than the NDX include: TEVA, SRCL, ADP, ORLY, FLIR, CHRW, COST, JBHT, RYAAY and HANS.
Stocks weaker than the NDX: FLEX, BIDU, AKAM, AMZN, WYNN, FWLT, NIHD, JOYG, DISH, ADBE, RIMM, MICC, LINTA, KLAC and NVDA.



Stocks to Watch on Wednesday
Holding Above 30 DMA
TLT, VMW, CHL, CRUS, HAS, HLF, NTRI, GMCR, USO, HANS, ACN
Moving Above 30 DMA = 1
FAZ
Moving Below 30 DMA = 27
AMX, AIV, BA, CAT, CLF, CMG, CRM, DE, DECK, DLR, FFIV, GR, HSY, LVS, MA, NETL, NFLX, NYX, SNDK, SWN, TIE, TSL, UCO, UNG, UNP, V, VECO
Staying Below 30 DMA
BUCY, FCX, GS, ICE, PCLN, SPG, URE, ZION, UAUA, A, AMD, MCD, LXK, ATI, CAM, DHR, DOW, MHS, PCP, USD, WHR, WLT, CREE, PNC, POT, WFMI, WMT, SWK, CSTR, ESI, BYI, STI, JEC, GME, FAS, FLS, PCP, ATW, BAC, GES, X, AGU, IPI, MOS

Intermediate Term Market Trend: Neutral
Short Term Market Trend: Down