Saturday, June 18, 2011

Weekend Stock Reflections

Markets Friday sang the same tune they have been singing all week. Opening up, and closing lower. Classic correction behavior. For the week the Nasdaq sank 1%, its 5th consecutive weekly decline. It closed more than 30 points off its intraday high Friday, repelled by its 200 day MA. That is the first time the Nasdaq has closed below that critical line on a weekly basis since last September. It now rests 9.4% from its recent highs, and is now down 1.4% on the year. The 800 lb gorilla of tech, AAPL, is certainly not helping. AAPL itself has now closed below its 200 day MA for a 3rd day in a row. The SMH lost its 200 day MA this week as well. Many in that sector now sit below their 200 day MAs as well including TXN KLAC. A quick look at a recent IPO in that sector shows FSL in free fall. Could Tom Petty have foreshadowed that move with his smash hit back in 1989? The S&P 500 seems to be finding support at its essential 200 day MA. It actually closed "up" 0.1% for the week. Not the type of bounce back you would like to see after 6 down weeks in a row. This week should provide some clarity technically with the S%P 500, for if it loses its uncomfortable flirtation with its 200 day this week, this correction which is becoming a little long in the tooth could get worse. Or could the 7.2% fall from its recent highs be enough of a wash out, and the 200 day support that is has received get stronger? Let the market itself answer that question. A big component of the S&P 500 is energy. Oil lost 6% on the week and the XLE is bracing itself for a 200 day MA battle near 70 as well. Should be an exciting week. All of this talk about the 200 day MA, is prevalent because lots of stocks and indexes are hovering around that line in the sand. It displays that long term secular trends (more on that below in the 200 day paragraph). A look at leading stocks, or should I say former leading stocks in this environment, always a good barometer of market health, looked shaky this week at best. MCO MOS down 12% on the week. CTXS APKT WLT TIBX down 7%. TDC gained 6% on the week hitting an all time high. Watch strong relative strength on a weak tape. When indexes rebound they often outperform handsomely. Not much to report on the earnings front or economic reports for Monday.

Stocks near 50 day support are CROX 21.05, EXPE 26, AET 41.95, AGN 80, CI 47.35, UNH 48.25, WPI 62, M 26.70, YUM 53.80, WCN 30.55. Stocks that found 50 day support Friday were BAX FTNT TMO EQT PLCM DISH SQM DAR. Stocks that can be bought as they reclaim their 50 day MAs and their buy stop spots are HLS 26.25, LULU 94.40, SBUX 36.25, INFA 54.75, A 49.25, AXP 49.25, TPX 61.75, UTX 86.30, TWC 76, BWA 72.85, B 23.45. Stocks that did reclaim their 50 day MAs Friday were FAST SCSS QLIK ROVI NSC KEG.

Stocks near 200 day support are DECK 77, HBI 26.60, APD 88.50, EMN 89.75, FMC 78.25, LYB 34.40, PPG 84, CAR 15, ANN 25.40, JWN 42.90, PIR 10.05, ROK 77, CTXS 70.75, NUAN 18.50, TIBX 23, CHRW 75.05, ARW 36.50, PKI 25.55, KKR 15, XOM 76.25, NOV 66.20, HK 20.75, CCK 35, HON 54, EMC 24.50, APKT 59.75, CMCSA 22.55, CY 18.45, SMTC 23.75, ACOM 32, RAX 34.05. Stocks that found 200 day support Friday were DKS CAT ORCL APA CHK CLR EOG RDSA FCS NXPI MCP TRW. Stocks that can be shorted at 200 day resistance are SOA 22.25, EBAY 30, WSM 36.20, DIS 39.10, IR 44.75, VRSN 33.70, IVZ 24, PAY 42, GTI 19.70, TS 45.55, APC 71.95, BP 44.05, CXO 88, DVN 79.30, FTI 42.50, NE 38.75, NBL 86.10, PXD 87.40, SU 39, SUN 40.55, DD 50.55, ETN 49.75, RVBD 34, JDSU 17, AA 15.25, ALV 74, RIO 68, ARUN 26, DNR 20. Stocks that met 200 day resistance Friday were PVH JOYG WM TTMI TEL ATI TKR UPL IP OMC AAPL ADI BHP POT. Stocks that can be shorted as they lose their 200 day MAs and their sell stop spots are DOW 34.25, SYK 56.20, CBE 58.50, PH 84.75, MOLX 24, ATW 38.50, RDC 35.75, SLB 80.50, SPN 33.75, VLO 23.50, QCOM 51.40, MCHP 35.30, MON 65.25. Stocks that lost their 200 day MAs Friday were VPHM JBL NBR MXIM CLF. To again demonstrate the importance of a stock losing its 200 day MA, look how poorly the following have performed after sinking below that line of support. ADSK AVT HES MDR WFT WLL JNPR OPEN KLAC LRCX SWKS TXN CMI TTM F DE JPM GS.

Stocks that can be shorted at 50 day resistance are NKE 82, ALB 66.25, CE 48.50, ROC 50.25, WYN 33, COV 54.80, STJ 51, AN 33.55, PAG 20.50, VIAB 49.10, ITW 56.05, ARBA 32, BMC 52.10, CSX 25.40, KSU 55.05, ADS 90, DFS 24, GSM 21.50, MTL 26.85, DRC 50.10, HAL 48, PTEN 29.45, IFF 62.85, ADP 53.25, VECO 51, XLNX 34, AEM 64, SWC 20, WAT 94.25, WSH 40.85. Stocks that met 50 day resistance Friday were CE COST CBS ABV PM VMW UNP R MRO OXY SWN EL TPX TUP BLL MSI XLNX BWA WSH. Stocks that can be shorted as they lose their 50 day MA and their sell stop spots are ABC 40.75, HUM 76, WLP 75.50, ERTS 21.80, NTGR 37.75. Stocks that lost their 50 day MAs Friday were UA NFLX AVGO VECO.

Good luck.

The author remains 100% in cash.

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