Monday, July 11, 2011

Monday Thoughts

Markets sold off hard Monday closing near their lows for the day. Volume picked up, clouding the strength of the recent rally. The Nasdaq took the hardest fall today declining 2%. The S&P 500 lost 1.81%, although it did manage to find support at its 50 day MA. Whether you want to blame Italy or last Fridays horrible jobs report, the markets are taking a more somber tone. The Nasdaq itself ran up 230 points in 3 short weeks, basically in a straight line, so some weakness was to be expected. It was the volume that alarmed us. We have to remember the bull market is into its third year and traditionally they are very volatile. The recent action of leading stocks, the markets true barometer of health, has been suspect. Breakouts in light volume, finishing below buy points after surpassing them intraday. No sectors were immune from the slaughter Monday, but banks and transports suffered mightily. A look at the UUP, a US dollar ETF , shows a collision course with its 200 day MA near 22.15. The challenge could provide some answers to sectors such as energy and materials. Today after the bell we had 2 reports. AA was down slightly and NVLS dropped hard in after hours. Tomorrow brings earnings from FAST before the bell. Economic reports include chain store sales and minutes released from Fed meetings.

We are being cautious here and watching previous buy points. We are following how stocks will hold up around their MAs. Also we will watch stocks in cup or double bottom bases that are forming handles. Remember handles must be 5 days in duration to be considered valid. Some that are very close are CAKE BID AGN JAZZ EMN PVH UA NUAN APKT TRN RAX DD MMM AME CAT JOYG KMT GSM TKR ALTR HP NBL PXP SPN WTI CBI. Keep them on a watch list and buy only if they take about the proper buy points on big volume.

Stocks near 50 day support are EAT 24.85, LTD 38.75, M 28.05, MW 33, PETM 44.10, SCSS 16.50, WYN 33.35, AGN 82, AGP 68, BDX 87, CAH 44.95, CI 49.25, XRAY 38.05, HS 44, FRX 37, UNH 50.05, VPHM 18.50, WCG 49.90, HLF 54.25, APD 92.60, ALB 68, ASH 62.45, GRA 44.10, GD 72.60, PVH 66, BMC 53.70, ERTS 23.05, NUAN 21.05, TIBX 28, DISH 29.25, QCOM 56.10, CBS 27, VIAB 50, CHRW 78.50, CSX 25.50, CNI 76.75, KSU 56.30, NSC 72.40, ARUN 28.40, GOOG 519, RAX 42, BLL 38.50, UTX 86.75, CTAS 32.05, VCLK 17.10, TEL 36.10, TDC 56, ITW 56.60, TKR 50, WOR 21, ARMH 28.25, CRUS 15.40, SMTC 27, XLNX 35, WPRT 23.05, APC 75, BHI 72, CAM 47.85, CRZO 37, CPX 32, KEG 16.95, NBL 88.50, RDSA 70.20. Stocks that found 50 day support today were ABV ANF ILMN EMN ORCL UNP COF WDR AGCO IPI MOS ROP DHR JBL NTAP ALTR BRCM WBC APA XOM WY BHP ABX SCCO.

Stocks near 200 day support are PEP 66.30, KMX 32.15, BID 44, CAR 15.45, SYK 57.10, ZMH 58.25, SAP 57, UPS 72, ETN 50.40, ABB 23.50, ADI 38, ATML 12.90, APA 117.60, HK 21.35, SUN 41, VLO 24.50, WMB 27.10, AA 15.55 (earnings after bell), FCX 52.50, RIO 69. VMED EXPD AGU ATI CXO SU all found 200 day support today. Stocks that can be shorted at 200 day resistance are SOA 22.80, DIS 39.50, KKR 15.50, TXN 33.15, NBR 25. ADSK found 200 day resistance today. Stocks that can be shorted as they lose their 200 day MAs and their sell stop spots are ANN 25.75, DKS 36.50, STJ 45.20, INTU 50, VMED 27.50, PAYX 30.60, ARW 37.25, OPEN 81.75, CBE 59.50, PH 85.60, ATI 59.65, FCS 16.10, NXPI 23.50, CMI 103, TRW 53.10. Stocks that lost their 200 day MAs today were LVS DOW VRSN DIS KKR STT EMR APH IR CAM DVN PXD.

Stocks that can be shorted as they lose their 50 day MAs and their sell stop spots are CPO 54.75, HNZ 52.75, COST 80.15, YUM 54.50, MAR 35.60, HUM 79.20, DGX 58.25, TWC 76, MWV 32.75, PLL 54.50, RRC 53.20, SGY 30. Stocks that lost their 50 day MAs today were PAAS WAT EMC MT X ATML OXY BTU AEM PEP CAR HOT AET LYB TXT CTXS APKT TROW DE HON MCO A APH TMO. Stocks that can be shorted at 50 day resistance are CCL 38, FLIR 34.45, TXT 23, MSI 46.05, RJF 33.75, AKAM 32, CCK 39, RS 50, MUR 66.20. Stocks that met 50 day resistance today were WLK BG DAR CCK IP.

Good luck.

We bought some WNR today as it retreated back to its 19.60 cup base buy point on light volume. DE lost its 50 day today but we are still profitable on the trade and will keep it on a tight leash.

The author owns FCX DE WNR.

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