Monday, May 23, 2011

Monday Thoughts

Markets sold off Monday with ongoing overseas concerns in Europe and China. The Euro hit a 2 month low against the dollar and the Shanghai Composite was down 3%.The Nasdaq took the worst of the beating with a 1.6% fall. Both the Nasdaq and S&P 500 lost their key 50 day MAs for the third time since mid-March. Last Tuesday both indexes moved below that key line intraday and rallied to close above it. No such luck today, although volume did cool off compared to Fridays levels. The market has been flashing signs of weakness for sometime now, with sector rotation moving to defensive sectors. One of those was healthcare, which was not immune to the days selloff (excuse the pun). More definitive of the markets fragility has been the lack of breakouts among leading stocks. Monday saw some more leaders pierce their 50 day MAs to the downside. EMN ROC EBAY ORCL MMM AVGO to name a few. Ags bucked the trend today and finished higher. A few other stocks avoided the damage including NFLX EXPE. Take notice when stocks finsih green on a weak tape. Some retail even managed to finish in the black. No coincidence that they were some of the leaders. LULU M ANF EXPR BBBY to name a few there. But buying in this environment is risky. See how the indexes and leading stocks behave around key MAs. The greenback strength continued today which hurt commodities. As we noted on Fridays post commodities somewhat escaped the barrage of selling but not so today. One bullish item to take note of, and a secondary indicator, was the low ratio of bullish money managers. The survey showed just 23% of money managers now bullish. Perhaps some froth getting taken out of the market here. Tomorrow earnings are reported from AMAT AVGO EXPR TTWO after the close. We also hear about housing starts, and retail same store sales.

Stocks near specific buy points which should be considered just a watchlist until the market can muster some strength are: Cup with handles SYK 64.71, CHRW 81.63, MOLX 28.20, TEL 38.16, MXIM 28.50. Double bottom with handles are NKE 86.63, BYI 41.34. EXPE 28.01 in a double bottom base and COH 61.54 in a 4 week tight pattern.

Stocks near 50 day support are CROX 19.40, HBI 29.15, CE 46.10, PPO 60, WYN 32.50, AGP 64.25, COV 54, HS 40, WCRX 23.75, CBS 25.10, VIAB 48, KO 66.75, ABV 30, ABB 25, ITW 55.50, CHKP 52.25, INFA 52, CNI 74.80, KSU54.05, NSC 69.50, A 47.40, AVT 34.80, PKI 27, ADS 87.75, COF 52.60, DFS 24.05, IVZ 23.50, EQT 49, NFX 72, EL 96, TUP 60.50, CCK 38.85, MWV 31.85, TYC 48, ACN 55, ADP 52.40, IBM 166, IRM 32, MCO 36, VCLK 16, EMC 27.05, MSI 44.50, ALTR 44.45, ADI 39.45, MCHP 38.70, SMTC 26.15, B 22.50. Stocks that found 50 day support today were PX BBBY SBUX TIBX VRSN EXPD ARW COG HK IFF IP UTX PLCM. MON can be bought thru 68 i it can take out its 50 day MA.

Stocks near 200 day support are APD 87, DOW 33.60, PPG 82.10, SOA 21.50, VPHM 17, EBAY 29.45, CBE 57.50, DOV 58.35, JOYG 82.65, PH 82.50, MTW 15, ROK 75, RHT 42.95, FDX 90.10, APH 52.05, TTMI 14.15, TROW 60.10, PAY 40, TS 44.50, TKR 46, CXO 86, CLR 57, DVN 77.75, EOG 100, ESV 51.05, HES 72.60, MDR 19.50, NOV 63.20, NE 38, NBL 84.25, PXD 85, RDC 35, RDSA 66.30, SLB 78.15, SPN 32.90, WLL 58, DD 49.60, ETN 48.60, TIN 21.60, MMM 88.80, OMC 45.05, JNPR 36, OPEN 78, NETL 33.95, SPRD 17.50, AA 14.80, BHP 87.80, CLF 80, BWA 65.50, CMI 101, ALV 72.25. Stocks that found 200 day support today were WRC HOT MDRX DO FTI KLAC SLW DE AMAT JPM. Stocks that lost their 200 day MAs today were RCL SWKS F RIO. Stocks that can be shorted at 200 day resistance are LVS 42.30, RCL 39.80, BID 42.50, CAM 49.60, MUR 68, TCK 50.40, RIG 70.30, WFT 20.25, EMR 56, LRCX 48, PAAS 34.20, TTM 27. POT retook its 200 day MA today. Put a buy stop in on ANR at 51.50 if it can retake its 200 day. Put a sell stop in on CTSH at 70.60, if it loses its 200 day MA.

Stocks that can be shorted at 50 day resistance are DECK 88.40, UA 69.50, VFC 99.25, FMC 84.05, LYB 41.10, ROC 50.15, CAR 18, ANN 29.80, AN 34, DKS 40.50, WFM 63, DIS 42.05, ADSK 43.25, KKR 17.50, EXXI 33.80, OIS 76, VLO 28, SGY 31.80, WMB 31, HON 59, NXPI 30.50. Stocks that met 50 day resistance today were DECK JWN RRC UPL. Stocks that can be shorted under their 50 day MAs and their sell stop spots are RL 126.50, ARW 42.75, COG 52.25, TDC 51.60, APKT 73.50. Stocks that lost their 50 day MAs today were PVH PCLN FAST IR RHT AMP GTI ADTN CMCSA JDSU FCS TXN.

Good luck.

We sold most of our BTU today as it lingers below its 200 day MA. We started a small position in FCX today.

The author owns HK TIBX BTU FCX.

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