Feb 28th: It doesn't take much for the markets to give back, what they offered over the last few days. The heavy volume selling, ranked it day of distribution across the board. Just as there were bearish markers during the recent advance, there are bullish indicators which didn't make the day a total loss for the bulls. As my little piggy icon on the webpage suggests, now is not the time to be overexposed in the market. If you need to trade, trade small. When tech secondary indicators [$NASI, $NAA50 and $BPCOMPQ] are down at levels last seen in May 2005, and August 2004, that will be the time to be more aggressive.
In the NASDAQ, the days' losses were halted right on (new) support of the former channel. Aggressive buyers could take a long side position at this point, with a stop on a loss of 2,275. There has been four, modest, accumulation days in the interval between Tuesday's, and the last distribution day, in early February - so bulls can take some heart from this. The NASDAQ
100 is in a similar situation, as it retreated to support following Monday's breakout. Unfortunately, the breakout gaps in each of these indices are no longer valid. Also working against the tech indices is the loss of support in the semiconductor index. Weakness in the latter index could weigh heavy on the NASDAQ, and the NASDAQ
100 in particular, especially as the next point of support for the semiconductor index is the 200-day MA, some 51 points away. The large caps were also hit hard. The S&P never managed a break of 1,294 resistance, collecting its first distribution day following 4 previous accumulation days. While the Dow ducked below 11,047 support, and the 11,000 level, leaving behind a potential bull trap. It's first distribution day after 3 days of accumulation. The Russell
2000 couldn't escape the days' selling, reversing its breakout, and also leaving behind a bull trap.
The volatility index has to be watched, it is running out of room to fall and gained 6% Tuesday. Further increases in this indicator will spread fear across the markets. As for the regular tech secondary indicators [$NASI, $NAA50 and $BPCOMPQ]; there were bearish crossovers in the $NAA50 and $BPCOMPQ.
Target hit: none
Stop hit: none
Feb 27th: Markets are working on a reshuffle, with the Russell
2000 closing at new highs, while the Dow and S&P struggled below resistance. The tech indices [NASDAQ and NASDAQ
100] breached resistance, but there is still much work to do to catch up to the large and small cap indices. If the markets could re-align, with small cap leadership, followed by techs, then large caps, I would have greater confidence something better could come out from this. There are some lingering issues. First, the semiconductor index failed to push off support, and was unable to participate in tech market gains. And second, the tech secondary indicators [$NASI, $NAA50 and $BPCOMPQ] were all able to gain, but the $NAA50, and $NASI, are at overbought levels, and this is not an environment which generates low risk opportunities. So, it looks like short term traders will have the best run of it.
On a final note, the technical indicators of some markets have been slow to cure themselves of a bearish malaise. Only the Russell
2000 has some measure of immunity to this weakness. While the NASDAQ
100 has the weakest technical strength. Bearish divergences of the MACD trigger in the NASDAQ, NASDAQ
100, and Dow (it has breached one divergence, but is not out of the woods yet) are significant concerns as they stretch into the fourth month.
Target hit: none
Stop hit: INHX hit its stop for a 9% loss. The stock featured for February 16th as a Breakout play. HEC was a Subscriber pick for January 17th, but hit its stop for a 12% loss. MORN hit its stop after breaking through 4-month support. The stock closed for a 7% loss. Although, it should be noted, the 50-day MA sits a few cents below at $38.16. The stock was a Subscriber play for February 16th.
Feb 26th: Resistance trading in the NASDAQ, but a potential breakout in the NASDAQ
100. And perhaps an opportunity for the Russell
2000 to lead the markets once again. The NASDAQ gained on light volume, wedged between the 20-day/50-day MAs and channel resistance. Technicals are mildly bullish, but are still influenced by the MACD bearish divergence. The NASDAQ
100 had been the hardest hit of the two Tech indices over the last few weeks, but Friday's gains could classify as a breakout - although the 50-day MA is still resistance. The Russell
2000 was the days' best performer with a resistance breakout, and a MACD trigger "buy". The Dow held 11,047 support, after an intraday bounce off 11,000. The S&P created an inside day, on light volume, and has swing trade potential from the day's high/lows. Based on the behavior of the Dow, there should be a supporting breakout in the S&P. Keep an eye on the relationship between the S&P and Russell
2000. The Russell
2000 is close to retaking its leadership role, and if it does, we could see broader strength in the market than that provided by the over-hyped Dow.
I probably don't need to add the $NAA50 secondary tech indicator switched back in favor of the bulls. The remaining two indicators: $NASI, and $BPCOMPQ, finished flat for Friday - but all three are back above their 5-day EMAs (again), but all are (still) technically weak.
Gold and silver finished Friday on resistance breakouts. This late week run to strength, spread to stocks like BGO, but could also mean value in stocks like KGC, and GSS. SIL was the star of the week as it jumped some $6.
Target hit: none
Stop hit: none
Feb 23rd: The inability of bulls to break resistance, could come back to haunt them next week. In their favor was Thursday's lighter volume selling. Also in the bulls favor were closes in the upper range of the priors day trading in the NASDAQ, and NASDAQ
100. Unfortunately, the semiconductor index threatened support it had held so well the previous day - each test of support increases the probability of a break, bulls will be biting their nails that this doesn't happen. As for the other indices. The Dow has experienced a see-saw last 3 days. It continues to trade above 11,000, but the longer it lingers at these levels, the greater the gain needed to break resistance from the ever rising broadening wedge. The Russell
2000 is poised to pounce, losing little on the day - this too is good news for the bulls. The S&P lost a little more than the Russell
2000, but is well within breakout range. Technicals remain green in all three indicators of this index, and the MACD sits just shy of a resistance breakout - similar to the situation which supported the breakout in the Dow.
As for the Tech secondary indicators [$NASI, $NAA50 and $BPCOMPQ], the $NAA50 experienced its third signal in three days, this time in favor of the bears. The remaining two indicators are clinging to their bullish signals, but the supporting MACDs of these indicators remain bearish.
Target hit: none
Stop hit: EMKR featured for February 3rd as a Breakout, and for Subscribers on November 18th, and again on January 5th. The Breakout played closed for a 12% loss, and the two Subscribers picks for a 23% gain, and a 8% loss respectively. The stock did finish on a bullish hammer, unfortunately, it closed below its' 50-day MA. STJ was another Breakout/Subscriber play to bite the dust after closing below its' 200-day MA. The June 27th Subscriber play closed for a 9% gain, and the Breakout for October 19th closed for a 3% loss.
Feb 22nd: Bulls took their turn to boost the markets, but not one market, was able to break crucial resistance. Volume did climb above the previous days selling, marking the day as an accumulation day. Over the last couple of weeks, markets have logged 2-4 accumulation days, with only the Dow, and NASDAQ
100, accruing a single distribution day over the same period. The Tech secondary indicators [$NASI, $NAA50 and $BPCOMPQ] are all above their 5-day EMAs, which is a net "Bullish" signal - but, given the proximity of the $NAA50 to overbought levels (1,700+), and likewise for the $NASI (some 400 points away), it is not a strong signal. Markets could confirm the bullish Tech secondary indicators by breaking resistance, something which wouldn't take a lot, given their respective positions to resistance. The story of the day was the positive test of October trendline support in the semiconductor index. From this, the Tech markets [NASDAQ and NASDAQ
100] were able to pressure resistance. The Dow made decent gains, but remains contained by the broadening wedge. The index most likely to benefit, and this would be good news for the bulls, is the Russell
2000. If this index can reassert leadership (and its close), it would be a better signal to use if looking to put more money to work.
The NASDAQ reversed nearly all of yesterday's losses, to close above the 20-day, and 50-day MAs, with a bullish crossover in on-balance-volume (technicals are all in the green). Unfortunately, the index is still underperforming relative to the S&P. The Dow was able to close at new 6-month highs, on a day of accumulation. A bearish divergence in the MACD remains a concern, but bulls hold the edge. The NASDAQ
100 closed just above the 20-day MA, on a bullish crossover in the MACD and on-balance-volume. The Russell
2000 is hugging the 20-day MA, and threatening a solid move above 725. Unfortunately, its technical picture is not as bright as it could otherwise be (to be a market leader). The S&P is similarly positioned to break 1,294 resistance, although technically, it is better shape than the Russell
Target hit: none
Stop hit: BLI gapped below support as pre-market earnings disappointed, reversing the earlier breakout. Yesterday's play registers as a 5% loss. The January 23rd Subscriber pick closed flat. AXCA was hit hard, shedding 28%, and swallowing all of its prior gains (which were up 40% at one point for Subscribers), as a developmental drug failed to meet objectives. CRI was a Subscriber pick for January 24th, but hit its stop for a 6% loss.
Feb 21st: Bears continued to pressure the Tech markets [NASDAQ and NASDAQ
100], confirming the downward channel in the NASDAQ, and reversing the breakout in the NASDAQ
100. The semiconductor index took the biggest beating, and was left clinging on to support dating back to October. Further losses in the semiconductor index will only increase the pressure already on the Tech markets [NASDAQ and NASDAQ
100], and thie will eventually get to the healthier large caps [Dow and S&P] too. I was concerned with the Tech secondary indicators [$NASI, $NAA50 and $BPCOMPQ] switching to yet another whipsaw (bullish) signal, but the $NASI held firm on its prior crossover, and the $NAA50 reversed back in favor of the bears, leaving the February 7th bear signal intact. As for the Russell
2000, Dow and S&P - it was nervous action, the kind of action associated with walking the plank.
Target hit: none
Stop hit: BEC featured for Subscribers on December 13th, but Friday's gap down, combined with Tuesday's market weakness, sent this down through its stop for a 4% loss. NRF was another Subscriber pick to hit it stop, although this stock finished the day strong on a bullish hammer. It featured for January 30th. TPLM was an oversold play, which perhaps was called a little early. The stock featured for February 17th, but closed below its triple bottom for a 9% loss. Watch the fast approaching 200-day MA for the next long side opportunity.
Feb 18th: Friday's low volume, options expiration day, reversed most of Thursday's gains - leaving traders at a point of selling resistance in Tech markets, while bulls looked to capitalize on strength in the large caps [Dow and S&P]. The NASDAQ finished the week inside a two-month declining channel, negating Thursday's supposed breakout, but on a bullish reversal in all three supporting technical indicators (MACD, OBV, and slow stochastics). The NASDAQ
100 is clinging on to its resistance breakout, but not before logging a bearish distribution day. The semiconductor index took the biggest hit on Friday, and is again, lingering around 20-day MA support. Supporting Tech. secondary indicators [$NASI, $NAA50 and $BPCOMPQ] gained, but the $NASI ended the week shy of a bullish cross in the 5-day EMA. I can see another 'bad' long signal coming here; the $NAA50 is at levels associate with tops, not bottoms (or good buying levels). The Russell
2000 had a quiet day, but was unable to take advantage of the listless trading in the Dow. Large caps continue to lead this rally, and this is bad news if you are a secular bull (but good news if you like Dow stocks!).
Target hit: none
Stop hit: none
Feb 17th: The third day of gains, created bullish 'three white soldier' candlestick patterns in the NASDAQ, NASDAQ
2000, and S&P (you could also argue for the Dow, but yesterday's gains weren't quite what they could have been). Thursday's action belonged to the Tech markets [NASDAQ and NASDAQ
100]. Both of the indices breached channel resistance, and the NASDAQ
100 finished above the 20-day MA - although couldn't pull off a close above the 50-day MA. At least in the NASDAQ
100, volume climbed over each of the last three days. The Russell
2000 did the most ground work, in its attempt to regain its leadership roll. Unfortunately, for secular bulls, the Dow holds that title. Value players may find some love in the Tech markets, but it is large caps (Dow caps really), which have the momentum plays. A quick run of my breakout scan, did not return many strong breakout candidates, a warning in itself, the rally is not all it appears to be.
Technically, the S&P switched to green, as the MACD trigger line followed the earlier lead in on-balance-volume, and slow stochastics. Secondary tech indicators [$NASI, $NAA50 and $BPCOMPQ] also had a good day, as the $BPCOMPQ crossed above its 5-day EMA trigger, leaving the $NASI the only indicator not to switch to the bulls favor (but it did gain on the day).
Target hit: none
Stop hit: JSDA stop hit on a low volume shakeout. Remains bullish, on the closing hammer. The January 18th Subscriber play closed for a 6% gain, and the February 13th play closed for a 7% loss. RADS featured as a Subscriber pick for November 21st, and a Breakout play for January 25th. The Subscriber play closed for an 8% gain, and the Breakout play for a 12% loss. The days volatility was triggered by earnings.
Feb 16th: A modest follow through on yesterday's gains. Volume lagged, but there was important closes over the 50-day MA in the NASDAQ, and the 20-day MA in the Russell
2000. Resistance breakouts also appeared in the Dow, S&P, and Russell
2000. The NASDAQ
100 remained the days laggard. Of the tech secondary indicators [$NASI, $NAA50 and $BPCOMPQ], only the $NAA50 turned positive, with a bullish cross of the 5-day EMA. However, it does remain very close to levels associated with market tops, so it remains to be seen how far this can take the Tech markets.
Of the three breakouts; the Dow was the key breaker on the day, acquiring the role of index leader from the Russell
2000; technicals are slowly turning around in the S&P, with only the MACD left to switch positive; finally, the resistance break in the Russell
2000 was not supported with a major reversal in its technicals. How these shape up into options expiration will be interesting, but all three of the aforementioned indices generated valid breakout 'buy' signals. As I have said before, the market is not offering up much if you measure your time frame for holding in months, or years - so be careful of these signals.
Target hit: none
Stop hit: AIRT featured for November 28th as a Breakout. The stocks big breakout has been pushed all the way back to my stop price. The stock closed for a 7% loss. ARP is in a struggle as the stock slipped to its stop price. Bulls will look to the 50-day MA for support, the Bears will look to the heavy volume selling as a death knell. The November 2nd, December 2nd, December 21st, and February 8th Breakout plays closed for a 43% gain, 21% gain, 11% gain, and a 9% loss respectively. WTSLA's weak breakout ran into a sea of volatility. The stock closed the day strong, but not before it hit its stop price. The February 14th Breakout play closed for a 5% loss, and the December 29th Subscriber play for a 20% gain. SYMM was a Subscriber play from January 30th. The stock continues its pullback back to the lows of the breakout candlestick, which also happens to be the convergence of the 50-day and 200-day MAs. The stock closed for a 10% loss.
Feb 15th: Interesting day, did Cupid fire his arrow at the Dow? The technical strength which featured in the Dow on Friday, was in the end, to be the heads-up for the move which followed. It was interesting, because last Friday, none of the remaining indices had a technical picture which pointed to strength (not even its partner in crime, the S&P). Even after Monday's close, there are still issues for the bulls. The NASDAQ stalled at the 50-day MA, with the 20-day MA a further resistance area overhead. Volume pulled in as an accumulation day, but it was still well below average. Finally, the index couldn't leave the comfort zone of Fibonacci, nor could its technicals, all of which remained bearish. The Dow, for all the fluff in the drop of oil prices ("$30 a barrel here we come..." *cough* *cough*), couldn't close at new highs. There is still the Bernanke factor to consider, which could be enough to give the new highs the bulls crave. But, with the modest gains in small caps, and techs, the sector rotation to safety is the kind of tail end action which ends long bull rallies - just look at the relationship between the Dow and NASDAQ in my Stockchart public list chart. The NASDAQ
100 barely budged on the day, technically remained weak (but slow stochastics are in oversold territory), with only an accumulation day to comfort the bulls. Unfortunately, the index is well off its 50-day, and 20-day MAs. The Russell
2000 had a good day, but could have done better - penned in by declining resistance, and the 20-day MA. The semiconductor index did better. The index was able to hold the 20-day MA for another day, including a support line shaped from January highs. If the NASDAQ and NASDAQ
100 are to build leadership, it will come from the semiconductors. Bulls will look to the break in the 20-day and 50-day MAs of the S&P, but bears will note how resistance from the declining channel held, something which wasn't a problem for the Dow. Tech secondary indicators [$NASI, $NAA50 and $BPCOMPQ] didn't sharply improve.
What does it all mean? I treated last Friday's Dow strength as a bit of an anomaly, and was proved wrong. I am now looking at continued weakness tech market technicals [NASDAQ and NASDAQ
100] and asking what's changed? The answer would be very little. Even in markets which had a good day: the semiconductor index, Russell
2000, and S&P, there was little to suggest these markets are working from a bottom. Tuesday's action was not a reason to jump into the markets from the sidelines. However, it did give a new lease of life to stocks which were fast approaching their stop prices. I would use the most recent reaction lows of a stock, as a place for protective stops (particularly for positions held from October and November), and wait-and-see what develops from here.
Target hit: none
Stop hit: ATAC was the first stock from which the very day's lows hit the stop. The stock finished strong, unfortunately not with my suggested play. The November 2nd Subscriber play closed for a 3% gain. The January 31st Breakout play closed for a 6% loss. DRRA hit its stop, but is worth keeping on the watch list, as its pullback was modest. The stock featured as a breakout for February 10th and closed for a 11% loss. FLE hit its stop after a couple of months of sideways disappointment. The December 9th play closed for a 2% loss; will the 200-day MA give it a much needed boost? SIMO hit its stop, but could still deliver, given it finished the day on a bullish doji (place new stops on a loss of Monday's lows). The December 30th Subscriber play closed for a 23% gain, and the February 10th Breakout play for a 9% loss. JAKK ended up a dud after earnings. It featured for Monday as a Subscriber pick and is considered a 6% loss. ORCC was a Subscriber pick for January 26th. The stock closed the earlier breakout gap, ending the day with a bullish piercing pattern, but not before it hit my suggested stop for a 13% loss.
Model portfolio: CHS added.
Feb 13th: Bearish sentiment continued from Friday, but there was a substantial drop in trading volume, minimizing the extent of the selling. The Russell
2000 is approaching a support trendline from October/December, and is perhaps the only real point of note on the day. Finally, the tech secondary indicators [$NASI, $NAA50 and $BPCOMPQ] confirmed a bearish cross in the +DI/-DI lines of the $NASI, and $NAA50.
Target hit: none
Stop hit: UGNE sold off on heavy volume in the absence of company specific news; the sell off was likely due to a large shareholder wanting out, but it was enough to knock the October 13th, and December 7th Breakout plays for a 7% gain, and a 11% loss respectively. AHL was a Subscriber pick for February 9th, failed to bounce from oversold levels - but is one to watch still, buy a break of the prior day's highs. The play closed for a 2% loss. GLE was a Subscriber pick for February 1st. Unfortunately, like most penny stocks, it carried a high degree of capital risk, the play closed for a 17% loss. NSTC was a Subscriber pick for January 23rd. The stock was hit with a downgrade by Friedman Billings, enough to hit the protective stop for an 8% loss. TTEK was a Subscriber pick for February 3rd, and just clipped the stop at the very lows of today. The play closed for a 5% loss. :
Bearish sentiment continued from Friday, but there was a substantial drop in trading volume, minimizing the extent of the selling. The Russell
2000 is approaching a support trendline from October/December, and is perhaps the only real point of note on the day. The tech secondary indicators [$NASI, $NAA50 and $BPCOMPQ] were of interest as the $NASI, and $NAA50, confirmed a cross in their respective +DI/-DI line.
Target hit: none
Stop hit: UGNE sold off on heavy volume in the absence of company specific news; the sell off was likely due to a large shareholder wanting out, but it was enough to knock the October 13th, and December 7th Breakout plays for a 7% gain, and a 11% loss respectively. AHL was a Subscriber pick for February 9th, failed to bounce from oversold levels - but is one to watch still, buy a break of the prior day's highs. The play closed for a 2% loss. GLE was a Subscriber pick for February 1st. Unfortunately, like most penny stocks, it carried a high degree of capital risk, the play closed for a 17% loss. NSTC was a Subscriber pick for January 23rd. The stock was hit with a downgrade by Friedman Billings, enough to hit the protective stop for an 8% loss. TTEK was a Subscriber pick for February 3rd, and just clipped the stop at the very lows of today. The play closed for a 5% loss.
Feb 11th: Value players stepped up to the plate in Friday afternoon trading, to push the markets into green territory. The short term picture favors the bulls, but with supply at the previous two reaction highs, it will be much harder for intermediate and long term traders to benefit. Adding insult to injury was the meager volume - the Big Money was not buying into the late day rally.
What of the individual markets? The NASDAQ closed inside the Fibonacci retracement area, but finished the week below its 50-day, and 20-day MAs. Technicals remained weak. The NASDAQ
100 ended Friday with a bullish harami, bouncing off the lower Bollinger band. But, the 20-day MA crossed below the 50-day MA (a mini-'Death cross'), and with the 200-day MA below it looks like we will see a test of the latter average, before we see any meaningful rally develop. The Dow failed in its second attempt to close above 10,940 resistance, which was so troublesome in December, and could be the basis for a reversal head-and-shoulder pattern (although drawing a neckline is difficult, as there is not a clear area of support, but a zone of demand as marked by the 10,660-10,708 range). Technically, the Dow turned bullish in MACD, on-balance-volume, and slow stochastics - so maybe 10,940 won't be so problematic as it would appear to be. Either way, if looking to buy, one is best to wait for a clear close above 10,940. The Russell
2000 finished Friday on a doji, a few points above rising trendline support, but below the 20-day MA. Unlike the Dow, the technicals of this index remain weak. It does, however, remain the leading bullish market. The semiconductor index has a mixed outlook; the double top marked by the shooting star/gravestone doji combination, will likely outweigh whatever support the 20-day MA has been providing up to now. Hold, until there is a break of the 20-day MA on a closing basis. Finally, the S&P was able to finish the week inside the Fibonacci zone, but as with the NASDAQ below its 20-day, and 50-day MA. Technicals are mixed; a bearish MACD, and slow stochastic, is countered by a bullish on-balance-volume. Volatility has yet to spike upwards, but the rising 50-day MA could provide the injection of fear this indicator suggests will come.
There was little to add about the tech secondary indicators [$NASI, $NAA50 and $BPCOMPQ], all closing down on the week, with MACD weakness confirming the earlier bearish crossovers in the 5-day EMA.
Precious metal stocks, and base metal prices, endured a volatile week. For gold and silver, a move to the 50-day MA looks to be the logical play in each of these markets. But this needs to be viewed within the context of a fast approaching 4-year cycle top. The next few years should provide a good opportunity to accumulate commodity miners and producers as the hype of recent gains fades from memory. Short term traders will likely find the sector a little tough going from here.
Target hit: none
Stop hit: ALVR has reversed sharply from Tuesday's bull trap. The stock featured for January 19th and closed for an 8% loss. DGIN hit its stop after seven days of weakness. The stock had undercut its 50-day MA on Thursday. The October 27th feature closed for a 17% gain, and the January 6th play for an 8% loss. EMAG hit its stop after a two-day period of volatility, switching from gains to losses. The stock closed inside the consolidation area, but the intraday swing was enough to knock out the raised stop. The stock was a Subscriber feature for December 7th, and as a Breakout play for January 5th. The Subscriber feature closed for a 22% gain, and the Breakout play for a 7% gain. SELA was a Subscriber feature for December 5th and January 5th, and a Breakout feature for February 8th. The stock created a bull trap and further weakness looks likely. The two Subscriber plays closed for a 38% and 7% gain respectively, and the Breakout play for a 5% loss. DSPG was a Subscriber pick for January 26th and closed for a 6% loss, although it did finish Friday above the 50-day MA.
Feb 9th: Distribution selling crashed the party in the NASDAQ as the index reversed off the 20-day MA, keeping the sequence of lower highs and lower lows intact. The S&P was similarly afflicted, although selling volume did not rank as distribution the 20-day and 50-day MAs did make their presence felt. The Dow was unable to hold early gains, stalling at 10,940 resistance. The breakout in the ratio of the Dow to NASDAQ shows a shift to large cap leadership, which is a feature of markets at tops. The Russell
2000 was unable to build upward momentum from the 20-day MA, and looks vulnerable to further losses and a trip to the 50-day MA. The semiconductor index also struggled at 550 resistance, closing with a gravestone doji to complement the earlier shooting star. The final point of note was the small bullish harami/doji in the volatility index; prepare for the upward move and corresponding dose of fear.
Target hit: none
Stop hit: CACS featured for February 8th and hit its stop for a 9% loss. The company had released earnings which were not what investors wanted to hear. MPET featured for January 23rd, but hit its stop for a unimpressive 16% loss. ONT was able to close its earlier breakdown gap and hit its stop price (and 50-day MA) for a 13% loss. ARDI was also a stock to close its gap. The December 15th Subscriber play closed for a 7% loss. LEND featured as a Subscriber pick for January 31st. The closed on a bullish hammer, but not before hitting its stop for a 7% loss.
Feb 9th: The relief bounce in the large caps [S&P and Dow] helped unwind some of the bullish tension which had built during the recent decline. The tech markets [NASDAQ and NASDAQ
100] vented all of its buying impetus at the open, and neither market was able to push much higher throughout the day. The semiconductor index was able to do a little better, given it was climbing from a point of support. There was little change in the technical picture of each of the markets, and bears remain in control. This was confirmed by increased weakness (and new MACD 'sell' triggers) in the tech secondary indicators [$NASI, $NAA50 and $BPCOMPQ]. Only the Russell
2000 had the look of a market making a bullish correction. One to watch: the coil in the volatility index sprung downwards, implying a period of upcoming stability, but this looks to be false dawn, and if this rises above 18, things could get a little scary (option traders will be happy).
Target hit: none
Stop hit: ENER closed the day on a bullish harami, but not before it hit the stop price. It featured as a Breakout for December 29th and closed for a 6% gain. ENG featured as a Subscriber pick for November 14th, as a Breakout for December 14th, January 4th, January 18th, and in the Model (fundamental-based) portfolio for January 25th. The Subscriber pick closed for a 76% gain, and the Breakout plays closed for a 52% gain, 15% gain, and a 10% loss respectively. MPS crashed through its stop on 'sell-on-the-news' action following earnings. The stock featured as a Breakout for October 31st and January 6th. The former play closed for an 9% gain, and the latter feature for a 5% loss. TESOF hit its stop intraday as the sector took a second day of selling. The stock did manage to hold the 50-day MA at the close, but the November 16th, January 4th, and February 7th Breakout plays closed for a 12% gain, 1% loss, and a 11% loss. IFNY was a Subscriber pick for February 7th which suffered for the lack of a handle on its breakout. The play closed for a 5% loss. SNWL gapped down from a bearish flag following the acquisition of MailFrontier. The stock featured to Subscribers for October 26th, and again for January 5th; the former play closed for a 17% gain, and the latter for an 4% loss.
Feb 7th: The tech secondary indicators [$NASI, $NAA50 and $BPCOMPQ] were the story of the day, as the $NASI and $BPCOMPQ followed the $NAA50 down by trading below the 5-day EMAs. Selling volume increased across the board. The NASDAQ
100 was hit hardest as it experienced the third day of distribution in six, but bulls will find some solace as slow stochastics dipped into oversold territory. The S&P is trading at channel support and could be an aggressive buy assuming support holds. The semiconductor index held above support, and the 20-day MA. The Russell
2000 also found support at the 20-day MA. Short term, bulls can go fishing, but with the tech secondary indicators all negative, it would appear unlikely a blow off exhaustion run is going to occur. Swing traders look most likely to benefit, with volatility coiled up tight, and ready to break.
Target hit: none
Stop hit: As markets retreat, we get a cull of stocks as money shifts from weak plays, and former leaders, into either cash, or new sectors. Tuesday's washout included: RHAT hit its stop following a close below the 50-day MA. The stock featured as a Subscriber pick for July 5th, and as a Breakout for September 14th, November 22nd, and December 23rd. The four plays closed for an 86% gain, 64% gain, 13% gain, and a 4% loss. SMXMF was a penny stock stop hit after Tuesday's big one-day loss. The stock first featured for January 3rd and closed for a 31% gain. SNRR was a Breakout play for December 16th and closed for a 4% gain. PFCE was a Subscriber penny stock, which nicked its stop, closing for a 13% loss. SNIC was a Subscriber pick for December 20th, and a Breakout for February 2nd. The Subscriber pick closed for a 11% gain, and the Breakout play for a 6% loss.
Feb 6th: Hangover trading - the Monday after a Superbowl is not known for its clear trading. Influencing the market was Iran's nuclear crisis stoked by anti-Danish sentiment in the region. Technical weakness in stochastics of the Dow and S&P followed the loss of bullish stochastic support in the NASDAQ
100. The silver lining was the strong reversal (and potential bear trap) in the semiconductor index. Tuesday will give a better indicator if the bear trap is something more permanent - or just an artifact of light trading. There was a modicum of strength in the tech secondary indicators [$NASI, $NAA50 and $BPCOMPQ] with gains in the $NAA50. I don't think there is much room for the $NAA50 to maneuver - but if it can stabilize it might provide some ground for a bullish exhaustion run. Swing traders look most likely to benefit with a swift move one way or the other from such overbought levels.
Target hit: none
Stop hit: BECN hit its stop by a penny but the current decline looks more like a bullish flag. $30 looks to be key support for the long haul. The stock featured as a breakout for January 26th and as a Subscriber pick for November 14th. The Breakout play closed for a 7% loss and the Subscriber play for a 17% gain. ONT gapped below its stop price following the resignation of its CEO. I will be keeping this on the watch list as I suspect this gap will close thus hitting the stop price (unless there is another gap up). WW was a Breakout feature for January 31st and a Subscriber pick for December 7th. The Breakout play closed for a 2% loss and the Subscriber pick for a 6% gain. DSX was a Subscriber pick for December 22nd and looks to be shaping a double bottom - but not before it hit my original stop price. One for watch lists if it breaks above $11.50. The stock closed for a 6% loss.
Feb 5th: The week ended on a down note with mixed bearish and bullish notes. Bulls will be watching the 50-day MA in the NASDAQ and the 20-day MA in the semiconductor index for a bounce on Monday, while the Russell
2000 remains 8 points clear of its 20-day MA. Fibonacci retracements remain important for support in the NASDAQ and the S&P. Unfortunately it looks like bears hold most of the cards with bearish divergences in the MACD firm in all indices. Adding insult to injury was the loss of near term support in the semiconductor index (increasing the importance of the 20-day MA), and a drop below bullish Fibonacci retracements in the NASDAQ
100 and Dow. Selling volume increased in the NASDAQ
100 and Dow, ranking Friday's selling as distribution. Also of note was the loss of support in the NASDAQ
100 to S&P ratio; with tech giving way to large caps there is sector rotation from speculation to safety - typical topping action.
The tech secondary indicators [$NASI, $NAA50 and $BPCOMPQ] inched ever closer to a top. It looks like a top is in place in the $NAA50 with it reversing some 50 points shy of a major historical reversal area. The $NASI and $BPCOMPQ weakened, but have not yet to confirm their tops. There is little of interest for long term buyers (investors) at this stage. Momentum holders and current stock holders are best advised to run tighter stops but don't go for a wholesale sell as indicators lie in an area favorable for exhaustion runs; rapid gains in a short space of time. February should mark an important 5-7 month top.
Target hit: none
Stop hit: BRNC featured for January 18th as a Free Breakout play and as a Subscriber pick for January 3rd. The Subscriber pick closed for a 19% gain and the Breakout pick for a 5% gain. LLY stop was clipped as it consolidates. The stock closed at the 50-day MA increasing the chance for a bounce. The stock featured to Subscribers for December 8th and as a free Breakout for December 28th. The Subscriber feature closed for a 5% gain, and the Breakout play for a 3% loss. MCRI hit its raised stop for an 8% loss. But the earlier December 29th Breakout play closed for a 9% gain, and a November 2nd Subscriber play for a 25% gain. WRES featured for January 13th as a Breakout and as a Subscriber play for December 21st. The stock did close at 50-day MA support, but for my purposes it is a stop hit for an 8% gain in the Subscriber play and a 7% loss for the Breakout play. ELGX was a Subscriber play for January 17th and closed for a 11% loss, but did finish right on the 50-day MA.
Feb 2nd: Bears were patient in the end, not letting Google disappointment rush them into selling. Thursday's action did much to reverse weekly consolidation gains from last Friday. Lower volume was the bulls saving grace but any efforts for individual index MACDs to challenge bearish divergences were quickly quashed. Bulls will be looking to Fibonacci retracements to stem the selling. In the case of the NASDAQ the index closed at the top end of the 2,246 - 2,280 Fibonacci range; the Dow was able to hold the lower end of its 10,823 - 10,910 Fibonacci zone, helped in part by the convergence of the 20-day MA and 50-day MA; the NASDAQ
100 was hardest hit by a close below the 50-day MA although it did hold the bottom end of its 1,683 - 1,713 Fibonacci range; the S&P marked a picture perfect turn off channel resistance but was able to hold the 1,264 - 1,276 Fibonacci area and the 50-day MA. It will also be important to look at the relationship between the NASDAQ
100 and the S&P. This ratio is on its sixth test of trendline support but is looking at its most vulnerable now. If tech leads the indices down it won't be long before the large caps [Dow and S&P] follow suit. Small caps [Russell
2000] took a big hit on profit taking, erasing recent gains but the index is well above any potential support levels. While the semiconductor index made its second test of support in three days.
The Secondary indicators [$NASI, $NAA50 and $BPCOMPQ] were mixed with gains in the $BPCOMPQ but losses in the $NASI and $NAA50. The new bearish reversal in the $NAA50 is perhaps most interesting as it occurred at an area 50 points shy of a typical top zone. There is likely little juice left in the $NAA50 tank.
Target hit: CKR was a Subscriber pick for December 14th and hit its target price for a 16% gain.
Stop hit: Well, TRDO was yesterday's bad news, today it was ARDI and the loss of its Verizon contract. This caused the stock to gap below its December 15th Subscriber pick stop price. DSTI was a Subscriber pick for January 31st and closed for an 11% loss.
Feb 1st: Bulls dodged a bullet as markets refused to succumb to Google sell fever. Although the expected declines triggered by Google's miss were not as great as feared, helped in part by stronger earnings from Boeing, it was not all bunting and fireworks for bulls. Volume declined from the previous day in large cap [Dow and S&P] and the NASDAQ
100 indices, weakening new near term highs in the Dow and strengthening resistance in the declining channel of the S&P. Bearish divergences in the various indices remained unchanged from Tuesday, although the MACD trigger line in the Dow switched to a 'buy' signal. Intermediate term traders will have seen support hold at the 20-day MA in the NASDAQ, Dow, and S&P. The Russell
2000 is well above its 20-day average and the series of narrow day ranges should lead to a big move in this index soon (spread trade anyone?). The NASDAQ
100 finished just shy of its 20-day MA but has traded around 1,715 for the last 4 days. Secondary tech indicators [$NASI, $NAA50 and $BPCOMPQ] logged a further day of gains leaving the $NAA50 some 50 points short of overbought levels (approx 2 days), and the $NASI some 275 points away (approx 15 days) from a prior key reversal area. The $BPCOMPQ has the most flexibility with a 13 point buffer to a major reversal area (approx 100 days). How will this translate? Look for a top in the $NAA50 in the coming week or two. This will shape a bearish divergence as the $NASI completes its top. During this time expect the $BPCOMPQ to rise until it too reverses (it will probably be the last indicator to confirm the top). Markets will likely rise during this period as the shorter term averages act as support; effectively a switch from value investing (50-day and 200-day MA support) to momentum trading (20-d MA/EMA support). Expect the Russell
2000 to continue to hold its position as market leader.
Target hit: none
Stop hit: Although it gapped below its most recent stop, THOR took a killing on two downgrades by Lazard Capital and First Albany. It is not an official stop hit but you could be forgiven for selling today. I think this breakdown gap will close over the coming year so the 5 long standing long plays covering Feb 05 to Dec 05 remain in play. MMUS hit its stop after a bull fake breakout. The stock featured for January 24th and closed for a 13% loss.