Markets slumped Wednesday, with indexes closing lower by more than 2%. They finished near session lows, just the opposite of yesterday, in higher than average volume. They pierced their 50 day MAs today, a day after the market gave signals that buys were again prudent. Traders however, need to be flexible and able to change their minds when the circumstances arise. Many leaders themselves, the strongest ones during this recent correction which held above their uptrends, gave up today. DHR UTX TYC all looked to have changed their complexion today for the worse. Sectors hurt the hardest today were banks, transports and commodities. Tech was not immune either. JNPR plunged 10% today, losing its 200 day MA. We first thought it was a CSCO thing, but apparently we were wrong. Some leaders tried to breakout today only to leave ugly negative reversals, such as VMW. Many former leaders also lost their 200 day MAs today. FCX IVZ TROW DE to name a few. Economic news was again weak today as it was yesterday, but the market reaction was obviously very different. ISM data was weak with the index coming close to the magic 50 number. Private job creation came in well below forecasts. Tomorrow brings jobless claims, factory orders and productivity numbers. Earnings reports come from JOYG before the bell, and PAY after the close.
Perhaps we were lucky to close out our profitable positions yesterday in FCX and BTU. But it was intuition as well. Put the buys on hold until the market can assert itself. Instead looks for key moving averages support. Stocks near 50 day support are AGP 66, TDC 53, ADP 53, DTV 48, EL 97.25, MWV 32.40, WAT 93, TRW 54.40, XLNX 33.65, EMC 27.45, MON 68, SYK 60.95, ABB 25.50, MOLX 26, TEL 35.50, HK 25, ANF 70, SMTC 26.90, ABV 30.55, PPO 61, YUM 53, WCN 30.25, TTWO 15.90, HAL 48.15, PCS 17.05. BHI COF found 50 day support today. If these levels do not hold, and they lose their 50 day MAs in big volume cut your losses quickly and even consider shorting.
Stocks near 200 day support are EBAY 29.65, ADSK 39, RDC 35.50, DKS 35.10, DIS 39, ORCL 30.80, NBL 84.75, MM 89, PAYX 30.50, TXN 32.10, FMC 77.40, VPHM 17.05, CBE 58, TTMI 14.50, APA 115, HES 74, NBR 24, RDSA 67, SLB 79.25, SU 38.55, DD 50, AA 15, BHP 88.25, RIO 67.10, DOW 34, ANN 25, JOYG 83.50 (earnings before bell Thursday), MDX 19.65, JWN 42, UPL 45.50, IP 27, TIN 21.90. MOS LVS MAR all found 200 day resistance today. Stocks that lost their 200 day MAs today were TCK WRC RHT BID MUR SUN SWC JPM. Stocks that can be shorted as they lose their 200 day MAs and their sell stop spots are HOT 57.50, PH 83.50, FDX 90, APH 52.15, DO 69.50, FTI 41.60, ETN 48.70, KLAC 40, SPRD 17.50, JCP 32.50, VRSN 33. Stocks that can be shorted at 200 day resistance are PAAS 34.65, RIG 71.
Stocks that can be shorted as they lose their 50 day MAs and their sell stop spots are ACN 55.75, TWC 74.25, PX 102.80, AN 33.70, NSC 70, ABC 40.30, COV 54, BBBY 53, AAPL 340, AVGO 32.50, APD 91.50, UNH 47, CHRW 77.50, WYN 32.75, PKI 27, MXIM 26.05, ROC 50, LTD 38.10, A 47.50, CCK 38.60. Stocks that lost their 50 day MAs today were numerous and include MCHP IP IFF JWN IR JDSU WMB APKT MMM APKT CMCSA TXN GM HBI ARBA WNR EXPD AVT SBUX FAST APC CLR SGY POT RRC DECK SOA PAG FDX GSM NBL. Stocks that can be shorted at 50 day resistance are FAST 33, DFS 24.20, FCS 19, VFC 99.85, CMCSA 25, SAP 63, CHK 32, VLO 28, UA 69.70. Stocks that met 50 day resistance today were PLL HON BRCM EXPR RL VFC KO ORCL TS SE MCP ANR ATW TRN ATI APA CVX EOG XOM HP NE SPN VALE HUN.
Good luck.
The author owns HK TIBX.
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