Monday, August 8, 2011

Monday Thoughts

Markets were absolutely hammered today. A historic trading session the day after S&Ps downgrade of US debt Friday night. But as we have been saying this downturn has little to do with that, as it was telegraphed for some time now, but more upon a weak domestic and international economic outlook. The Nazz lost 6.9%, leaving it 18.4% off its recent high. Volume grew. Any weakness tomorrow morning would put the index in bear market territory. The S&P 500 lost 6.6% today leaving it 18.3% off its recent high. The Dow Jones Transportation Index and the DAX are already in bear market mode. BAC lost 20% today alone, the classic definition of a bear market. Obviously no companies are near valid base buy points, so the MAs take on a more important role. Very few are above their 50 day MAs. Leaders that found 50 day support today were AAPL GMCR. BIDU GOOG are quickly readying for their 50 day MA challenges. More leaders gave up their 50 day MAs today. HLF down 12%, SODA 10%, CROX 14%, COG 11%, JAZZ 9%, CMG 6%. More recent leaders that lost 200 day support today were TIF down 10%, COH 12%, DECK 12%, PVH 13%, ROC 10%, CBS 10%, HAL 10%. I could go on and on. Traditional fear contrarian indicators such as the Vix exploded today. The VXX took out 200 day resistance today on enormous volume. The put call ratio stands at 1.34, high, but nearly half of its recent crisis high of 2.58 on 10/06/08. Money managers are still very bullish according to recent advisor data. The calls for a snap back rally are growing, which may be a signal that more bearish action is to come. The technicals are broken on the indexes and their charts. A few remain near MAs and they can be played but be small, if you have to play at all. Earnings tomorrow come from DISH FOSL IFF before the open Tuesday and NUAN after the close.

Stocks 200 day support are AMZN 185, AN 31.95, DLTR 57.25, FOSL 89, TJX 49, CL 81.30, TPX 51.20, HSY 52.50, EXPE 25.95, CERN 53.10, V 76.80, ALXN 45.15, WPI 57.85, RRC 50.50, SM 64.50, ACN 52.60, IBM 60.25, WCN 29.30. Stocks that found 200 day support today were ANF DSW DV KO NFLX ADS ROSE. Stocks that can be shorted at 200 day resistance are BBBY 50.95, FAST 31.05, ROST 71, SCSS 12.60, TSCO 55, INFA 49.10, PLCM 24.40, ABV 29.55. Stocks that met 200 day resistance today were DG ORLY. Stocks that lost 200 day support today were plentiful. TGI BBBY COST FAST M LTD MW PAG ROST SCSS SFLY SAH SBUX TSCO WFM CHD TUP BGS CAG HNZ HRL DAR HOG PENN QLIK CRS DISH MTZ MSI MHP NBL OIS OKE PTEN WNR IRM WPRT.

Stocks near 50 day support are BIDU 125, GOOG 541. GMCR AAPL both found 50 day support today. Stocks that can be shorted at 50 day resistance are LULU 54. KO IBM SLW all met 50 day resistance today. GMCR can be shorted under 87 today, its 50 day MA. IACI MSFT PM all lost 50 day support today.

QCOR SOLR both demonstrated decent relative strength today. Keep an eye on those if and when some buying comes back into the market.

Good luck.

The author is 100% in cash.

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