Thursday, March 10, 2011

Thursday Thoughts

Markets careened lower today in big volume. More importantly the indexes all closed below their 50 day MAs. Almost always a sell signal. Indexes have found support their, in some cases intraday, after falling below that line of support only to close above it by 4pm. Economic reports today were poor. Jobless claims were received negatively, Moodys downgrade of Spain, and news that China exports cooled. A trifecta that was a recipe for disaster. News of violent responses to protests in Saudi Arabia did not help the situation either. Leading stocks, the true barometer of market health, are crumbling. Many sank below their 50 day MAs today. The list grows longer each and everyday. Oil stocks were among the worst of the days sectors, although many found 50 day support today. Is it the realization that QE2 is ending and the recently elected Congressman will thwart and talk of QE3? Is it just rotation out of a top performing sector like the semiconductors too? Will it be temporary? Markets in recent months used to garner strength into Friday in anticipation of Monday strength. That ended 2 weeks ago. How long will this correction last? No one knows. The VXX closed up big on heavy volume reclaiming its 50 day MA today. SDS is right smack up on its 50 day. Put in a 22.30 buy stop. Tomorrow should be riveting. Perhaps this will turn out to be a wonderful buying opportunity but it certainly seems like a good time to have plenty of cash on hand. Not much in the way of earnings Friday. ANN reports early and retail sales, business inventories and Michigan sentiment index all come out tomorrow.

Stocks are not breaking out in this environment. Instead look for support at moving averages. Stocks near 50 day support are KLAC 45, GSM 20.10, AZC 4.60, A 43, DHR 49, PLL 52.80, ROK 82, BEXP 30.50, CAM 53.25, CNQ 45.10, CVX 96.50, COP 72, HOC 50, MDR 22, PTEN 24, PBR 38, RDC 37.10, SU 41.70, TSO 21, WLL 61.75, HP 57, ATW 41, WNR 13.70, DNR 21, WMB 27.60, NBR 25.10, OIS 68.50, ABX 49.60, APH 55.50, PVH 60.25, TPX 45, EMC 25.50, JNPR 40, TDC 46, LLL 78, PETM 40.60, BID 45, DIS 41.15, DOW 36.50, EMN 92, PPG 85.75, WYNN 120.50, BUD 56.50, RAI 33, NDAQ 26.10, URI 28.50, CTSH 75.50, ADP 48, IBM 159, INTU 49, TIBX 23, VRSN 34.45, CTXS 68, CSX 71, RJF 36.25, WDR 38, TER 16.50, CVLT 33, ARBA 28, NCR 17.90, ADS 75.80, MMC 28.70, FTNT 39, APKT 65.20, MTW 16.90, AON 48, BGC 40, IT 36.25, AET 3.25, CMCSA 23.95, WU 20.50, IVZ 23.20, TJX 48. As always if this moving average is pierced to the downside get out immediately and even consider shorting. Stocks that found 50 day support today were ATU CAT DOV DVN XOM HAL NOV NBL PXD RIG VLO GFI LOGI COST LTD WAG ACN WY BMC KSU GLW ADTN MOLX ERJ LULU DD CHKP INFA NSC JPM ARW NXPI CXO EXXI RVBD RAX BHI. Stocks that found 50 day support and closed positively on a weak tape and to be commended were CRUS JDSU COH ALTR AVGO JWN MCD.

Stocks that displayed solid relative strength today and closed up today were DKS OPEN BIDU SINA CMG FFIV SBUX YUM NFLX.

Stocks near 200 day support are BRCM 39.10, CAVM 33, LLTC 32.10, MSC 19.25, MIPS 10.50, MT 33.50, X 49, JRCC 19.25, PUDA 10.15, TCK 46, WFT 18.75, HXL here, RIO 61.50, VALE 31, LDK 9.90, SCCO here, SQM 48, BBBY 43.85, ORLY 54, CCL 39.50, MAR 37, INFY 66, RHT 39.10, ROVI 50.80, CHRW 70, EXPD 47, STT 41.55, BEAV 33, SNDK 44, GR 79.50, TTM 25, AMT 49.50, LVS 38. JKS SWN BBD all lost their 200 day MAs. VMW FFIV found 200 day support today. NTAP plunged below its 200 day and rallied decently to close just below it.

ETFs near buy spots are EWC 32, RSX here, FXI 43 all their 50 day MAs. TLT burst through its 50 day today.

Stocks that lost their 50 day MAs today were plenty. They include OXY BTU CLR RRC CRZO BHP LRCX NVLS SPRD NUE CBE APC ACI BP SWC BLL AGCO DE TROW FLR ORCL PMTC RIMM QCOM TTMI MWV XLNX ASML VSEA. Sell stops can be placed on stocks that cut under their 50 days are VSH 16.60, SPN 35.50, DECK 81, AAPL 343, GD 74.50, ANF 53.30, TIF 60.50, WSM 34.75, CBI 34.25. Stocks that can be shorted at their 50 day MAs are ADI 39.30, RS 54, AVT 35, JBL 21. Stocks that we previously identified as potential trend changers that lost their 50 day MAs on massive volume after beautiful uptrends were GR PH ATML. Today we can identify 4 more possibilities. JOYG HES SLB CLF charts all looked damaged today in ways that could be more than short term. Only time will tell. ARMH, a chip leader, plunged below its 50 day Thursday. TCK forming a bearish head and shoulders pattern.

Went long FCX off 200 day support today. Seems the sentiment is so negative on the stock recently. Everyone hates it and is has performed poorly recently. Tight stops as always, especially in this environment.

Good luck.

The author is long FCX.

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