Wednesday Game Plan

Markets displayed classic bear market behavior Tuesday opening on the highs and closing hard upon the lows. Volume grew as stocks reversed. The Nasdaq had a bearish outside day, lost its 10 week MA, and its "psychological" 2600 level. Not the kind of trifecta bulls were wagering on. The S&P 500 managed to hold 10 week support, but the action here was troubling as well. It had been up over 1% earlier in the day. Leading stocks that held up recently on down days, had no such luck today. SWI, a recent standout lost 4% on average trade today. Many retail names performed poorly today. DSW was down almost 5%, surrendering 40 week support. Its wide and loose base errs on the side of failure. M lost more than 5% on huge volume but did catch a bid at 10 week support. AMZN imploded 5% as its chart resembles a head and shoulders pattern reminiscent of the hunchback of Notre Dame. Right side a little slumped. Other individual stocks I am keeping an eye on are HUM. Looks like it could be shorted against that 90.76 12/5 all time high. It had an outside day, reversing from an all time high. Others experiencing significant bearish outside days today were SIMO EOG NUE AAPL VMW. Energy has been under pressure as the greenback solidifies. In retrospect when leaders in the group were behaving soft, a red flag should have been highlighted. COG has been a group under performer since losing 5% 12/7. Today its 10 week support gave way. FTI, another leader in the group, started its descent 12/8, and finished 5 of 6 days lower in bulging volume. Finally lost its 50.30 cup with handle buy point. When the generals start lagging, pay attention. The Euro, based on FXE, looks poised for another leg down. But then a look at its daily chart makes you feel at the very least a dead cat bounce should occur soon, and therefore be careful with shorting commodities. SPR met 40 week resistance today, following an upgrade. The euphoria run usually is halted at 10/40 week resistance areas in general. Stocks that look decent amid the recent carnage are PM V both in the process of developing 3 week tight patterns here. Some gap ups still intact include ARG PLL OKE. IYT found 10 week support today and groupmates NSC UPS are searching for 40 week support, both at the same price of 70.10. CNI JBHT both found 40 week support today.

Stocks near specific buy points include only the very safest of names, and not a lot to inspire confidence. Flat bases are ABT 55.71, ED 59.99. Cup with handle is MJN 76.14.

Stocks that can be bought at 40 week support include DECK 93, RL 135, ASML 38.20, BEAV 36.15, KMX 29.95, WSM 37, TMK 40.95, VAL 35.15, XOM 79.10, NBL 89, PXP 33.25, NTGR 34.15, BUD 56.95, DGX 54.70, BR 22.05. Stocks that found 40 week support today were ADP MENT ROK CBI APC QCOM.

Stocks that can be bought at 10 week support are KLAC 45.20, KSU 63, TRN 27.10, UNP 98, AAP 65.60, ABG 19.10, BBBY 60.60, FAST 38.30, LKQX 28.70, PETM 46.80, SBH 19.10, SCSS 19.05, SBUX 42.25, WMT 56.95, RATE 18.15, INTU 52.15, DOV 54.05, JEC 39, KEG 13, INT 40, CSCO 18, AET 39.05, BIIB 108.50, MRK 34, TROW 53.50, SO 43.15, X 25, EL 106, GIS 39.20, HSY 58, DE 74. Stocks that found 10 week support today were MWV MMM COST M NUAN PMTC DVN OXY CAT JOY RJF STLD WFC MKC FCX.

Stocks that can be shorted as they lose 40 week support and their sell stop spots are COH 58.50, UA 71.75, GRA 40.55, JAZZ 35.10. Stocks that lost 40 week support today were DKS DW VMW TIBX JOY JEC HLF.

Stocks that can be shorted at 40 week resistance are RTN 45.95, HP 59.15, HLF 52.80, CPO 50.15, MON 69.50. Stocks that met 40 week resistance today were WRC HON ARO SAPE PH PPG OXY WDC FISV CPO KO.

Stocks that can be shorted as they lose 10 week support and their sell stop spots are NKE 93.25, CE 41.60, NOV 67.60, ARW 34.05. Stocks that lost 10 week support today were SLB UPL TWI CLF COH ASNA ATU CBE PH COG.

ALXN can be shorted at 66, its 10 week resistance. Stocks that met 10 week resistance today were INTC JWN VMW APA EMC ALXN GS JPM.

Good luck.

The author is short VFC at 133.50. We closed out EOG for a small gain, frustrating indeed, since it was much higher early in day.