Trading Indexes Close Broadly Lower as Euro and Financials Fall...

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All nine sectors moved lower on Tuesday.  XLU, XLP and XLK were the strongest sectors.

Breadth weakened dramatically as decliners led advancers 10.58 to 1 on the NYSE and 4.66 to 1 on the NASDAQ.

Exchange        NYSE       NASDAQ

Advancers          262             451

Decliners         2,772          2,104

On Tuesday futures sold off overnight and the broad indexes open significantly lower.  The selloff was broad and wide as decliners swamped advancers and twenty-two NDX 100 stocks dropped below their 30 DMA.

The short-term trend is down and the price action did break support on Tuesday.  As we posted Friday if the “weakness in the RUT, Euro and SOX…continues could lead to the SPX pulling back more than the 33 point reversal which bottomed on Jan 30.”  On Monday ES futures pull back reached a total of 38 points and the SPX pull back 36 points from Friday’s high.

The weakness did continue on Tuesday as the RUT blew out the bottom of Monday’s hammer and the SOX gapped down and formed a hammer of its own on Tuesday.  The Euro broke its 61.8% Fib support and fell to the area of its 78.6% Fib level.

The SPY moved down $2.00 on 201.9 million shares, its highest volume since Dec 20, the start of the current up trend.

AAPL gapped down and fell almost $17 below Monday’s close.  Buyers stepped in at the 516 area and AAPL closed above its open,  forming a hammer-like spinning top, down 2.90, -0.54%.

AMZN was up.  BIDU, GOOG and QCOM were down and rallied off their lows.  NFLX and PCLN were also down and closed near their lows.

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AAPL accounted for 2.46 points and GOOG, MSFT, ORCL and BIDU  only 6.25 points of the NDX 26 point decline.  The majority of the Tuesday’s decline was spread over the other 84 NDX stocks that declined. 

Money Flow

Euro     -87 pips   1.3108

TNX      -0.61          19.44

TLT      +1.41        117.63

XLF       -0.36         14.44

SPX     -20.97     1,343.36

VIX       +2.82         20.87

NDX -0.99%

COMPQ -1.36%

SPX -1.54%

INDU -1.57%

RUT -2.06% 

Money Flow was typical on Tuesday as the Euro, TNX, XLF, SPX moved lower and bonds TLT and VIX moved higher.  The Jan 18 SPX breakout has an intermediate term chart target of 1,427 within 12 weeks of the breakout, and clearly has taken a rest pulling back from it 161.2% Fib extension.

The VIX made its highest close since Feb 15 and did confirm the SPX move down on Tuesday.  The VIX did begin to rise and a 3 to 5% pull back has become more likely with the slightly more than a 2.6% pullback as of Tuesday's low.

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If you have heeded our guidance over the past two weeks of “continue to follow your rules in looking for entry opportunities, moving your stops and managing your exits,” then you should have been in a strong position today.

Needless to say none of the Bull Flag Setups for Tuesday gave entry signals.  More than half of those listed fell to an equal low or lower low on Tuesday.  Adjust entries for lower entry and stop.

Bull Flag Setups to watch on Wednesday – CCJ, ZAGG, GRMN, QCOM, LNKD, DHR, AKAM, WHR, LO, C, GS, CRUS, SWKS, JDSU, SWI, MOS, SINA, DLR, HLF, FAS

These stocks VRSN, GES, NVDA, BAC, MU, CREE, CHL, RCL, CAT, AXP, HAL, RVBD, KKD, SLB, PCS, WDC, MTW, STI, ADSK, INTU, ESI, ENTR, CF may represent a support bounce from and equal low, a MACD bullish divergence or a potential bearish entry on stocks that have made a lower low.
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Leading stocks > +2% on Tuesday included FAZ, PCX

Losing stocks < -2.0% included FAS, SOHU, LDK, AKS, SINA, CF, CREE, RVBD, C, VECO, ATI, GS, NTES, COH, IL, UCO, POT,CAT, CDE, X, DOW,SLW, MCP, SNDK, ESI, BAC, WDC, ZION, DE, LVS, RCL, PCS, JDSU, CROX, TSL, CRUS, F, STI, UAL, DECK, KKD, SWI, HAL, WLT, SWKS, URE, CIEN, NDAQ, FFIV, CLF, ENTR, SWK, ANF, SLB, UNP, FCX, ARUN, MOS, GES, HLF, TPX, TBT, HUM

NDX 100 stocks stronger than the NDX included SPLS, ALTR, XLNX, KLAC, LLTC, MXIM, AMZN, MCHP, INTC and ATVI.

Stocks weaker than the NDX include FOSL, NUAN, CTRP, ADBE, SNDK, NFLX, NTAP, GMCR, WCRX and WYNN.

One NDX stock SPLS closed above the 30 DMA and twenty-two ADBE, AKAM, BIDU, BIIB, CHKP, CTRP, CTSH, EXPD, EXPE, FLEX, HSIC, INFY, MU, MYL, NWSA, PCAR, SBUX, SIAL, SRCL, TEVA, VMED and XRAY moved below leaving 37 NDX stocks above their 30 DMA.

Stocks to Watch on Wednesday

Holding Above 30 DMA = 27

CMG, NKE, CRUS, SWKS, NGLS, CHL, TPX, HLF, LNKD, LVS, CSTR, CRM, INFA, SWI, VMW, IBM, ZAGG, TSLA, GES, V, ICE, TIF, UCO, DLR, SNDK, SINA, ANF

Moving Above 30 DMA = 2

FAZ, TLT

Moving Below 30 DMA = 18

BAC, C, COH, CREE, DHR, KKD, FAS, GS, NDAQ, NTES, PCS, RVBD, STI, SWK, TBT, URE, VECO, ZION

Staying Below 30 DMA

A, CAT, CF, CROX, DOW, F, FFIV, MOS, POT, SLW, SWN, TLT, WDC, CDE, LDK, SLB, SMH, ENTR, HAL, JDSU, JNPR, UNP, ARUN, ESI, IL, NVDA, CIEN, GLW, CIEN, GLW, DECK, MCP, TSL, HUM, RCL, UAL, WLT, DE, CLF, FCX, X, GRPN, ANR, PCX, SOHU, AKS, ATI, FAZ

Four Month Intermediate Term Market Trend: Up

Short Term Market Trend: Down