SPX Moves Lower Holds Above Nov 16 Low...

On Tuesday the SPX formed a large black candle that stayed above the Nov 16 low.  The SPX closed at 1,180, down -17.11 or -1.43%, the COMPQ moved down -37.07, the INDU pulled back -142.37 and the RUT finished -7.40 on Tuesday.  A sell off day and the small caps and semiconductors are relatively stronger…two interesting clues…

                                    

Breadth weakened from Monday as decliners led advancers 3.51 to 1 on the NYSE and 2.97 to 1 on the NASDAQ…

Exchange       NYSE          NASDAQ

Advancers         673                 672

Decliners        2,366              2,000

Index Direction      Confirmation

VIX       Up                   Yes – SPX

SOX     Down             Yes – COMPQ

Leading stocks on Tuesday included FAZ, CF, CRM, CSTR, SKX, DECK, RVBD, SNDK, TLT, CMG, HSY, PCP, DLR, GES, HAS

Losing stocks included SWN, LDK, FAS, LVS, ARUN, SOHU, VMW, CLF, VECO, FCX, MA, F, PCLN, ATW, WLT, NYX, TIE, ESI, UAL, AMX, ZION, A, GMCR, DOW, AKAM, FFIV, AKS, NTES, GS, CAM, X, FLS, BAC, STI, WHR, PNC, CRUS, CAT, LXK, NETL, URE, JEC, NDAQ

Interest rates moved lower, bonds inched lower, the Euro moved lower and the SOX closed lower -0.78% forming a potential bearish harami.  The VIX jumped +2.26 to close at 20.63.

All nine sectors moved lower on Tuesday with Energy XLE -1.96% and Materials XLB -1.92% leading all sectors lower. 

The SPX, INDU and COMPQ closed below their 30 DMA although all four held above their November 16 horizontal support.  The RUT is relatively stronger and closed above its 30 DMA.

Look for light volume on Wednesday heading into the Thanksgiving Day Holiday.  Half day of trading on Friday, generally the lightest volume day of the year.  2009 was the exception with the Dubai news causing a flurry of selling volume that was reversed the following week.

Watch the big seven AAPL, AMZN, BIDU, GOOG, NFLX, PCLN and QCOM to see if they stay above the Nov 16 horizontal support.  All were well above their Nov 16 low at today’s close except GOOG which closed at last week’s low.  If these stocks stay above their short term support, that increases the probability of the up trend and support of last week continuing into next week.

The news says Korea, euro debt and the Fed’s downgrade in growth for 2010 and 2011 was the cause for the selloff…maybe so, but if these fears were really wide spread among big money, why were semiconductor and small caps stocks relatively stronger?

I hope everyone has a Happy Thanksgiving.

I want to make some comments about the Fed policies and the definition of insanity, however I will wait until after Thanksgiving and just say that EVERYONE should be REALLY GRATEFUL that our economy is projected to grow 2.4% to 2.5% in 2010 and 3% to 3.5% in 2011.  Yes a downgrade from previous projection but still growth in and moving in the up direction.

Let us be Grateful!

Continue to trade with the trend and simultaneously be prepared for any break of support.

SPX

Resistance: 1,182, 1,190, 1,200

Support: 1,170, 1,148, 1,130

Enter bullish trades with a bounce off support and a break above the high of the low day or a break out of horizontal resistance.  Thursday was an entry signal for many stocks.

Look for break of short term support for bearish entry signals or a bounce down from the 30 DMA.

The short term 3 day trend is down.
The two-month trend is up.
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 -4.63 – black spinning top close below 30 DMA

QCOM -0.52– black spinning top

GOOG -8.21 – black spinning top below horizontal support

BIDU -2.56 – spinning top below 30 DMA

NDX 100 stocks stronger than the NDX include HOLX, ALTR, URBN, SNDK, SPLS, MAT, XLNX, MYL, PDCO, BRCM, FSLR and SHLD.

Stocks weaker than the NDX: PCLN, GOOG, AAPL, ISRG, WYNN, BIDU, MICC, AMZN, JOYG, CTXS, RIMM, SIAL, INFY, NTAP and CERN.

Stocks to Watch on Wednesday
Holding Above 30 DMA
HLF, PCLN,  LVS, CMG, SINA, AIV, CAKE, CAM, DHR, UNP, WLT, A, ATW, SLB, NDAQ, USD, AMD, DECK, GR, VECO, CSTR, RVBD, TBT, WFMI, NFLX, BYI, INFA, MHS, NETL, CRM, FFIV, ARUN, SWN, CAT, POT, GME, NTRI, X, CREE, BUCY, GES, HAS, MCD, UNG, ARUN, CLF, CRM, INFA, UAL, VMW, HANS, RMBS, SNDK, CRUS, FAZ, GMCR
Moving Above 30 DMA = 1

CF
Moving Below 30 DMA = 15

AIV, AKAM, AKS, AMD, AMX, ATI, DE, DHR, DOW, ESI, FCX, MA, MOS, PNC, SPG

Staying Below 30 DMA
GS, ICE, JEC, NTES,  FAS, IPI, LDK, UCO, ZION, AGU, BAC, URE, V, ACN, CHL, FDX, NYX, PCP, STI, SWK, TSL, BA, HSY, POT, ESI, SKX, WHR, LXK, TIE, TLT, DLR

Intermediate Term Market Trend: Up – 2 months
Short Term Market Trend: Neutral