Oct 13th: Bulls made an attempt to grab a foothold, but none of the day's volume was suggestive of heavy demand. The best index on the day, the NASDAQ 100, ended on a 'bullish engulfing pattern' as it regained its 200-day as the heavily influencing semiconductor index rallied off its positive test of the 200-day MA. Look to the these two indices to continue to strengthen over the coming days. The 'bullish hammer' of the Russell 2000 looks to be a false signal although knife catchers may want to look at the S&P as it closed the day on a doji after days of heavy volume selling. If you check the S&P's secondary indicators on my Breakout page you will see these are in deeply oversold territory and are well positioned for a lengthy upcoming bounce. The tech secondary indices [$NASI, $NAA50 and $BPCOMPQ] are not quite there yet. The $NAA50 has entered solid bounce territory but this does not exclude it from future whipsaw on the next EMA crossover.

Target hits: none

Stop hits: Brief list due to travel commitments; ACN, MO, BJS, SNG, DESC, ET, GRS, JEF, OO, PESI, EPAY, ELY, DADE, HELX, and OXPS.

Oct 12th: The current wave of selling from the last couple of days sent another batch of Gold Member and Breakout picks to the slaughter house. As for the markets we are seeing a rapid deterioration of support and increase in fear as each day piles on the misery. A lack of leadership and a Prudential downgrade of the semiconductor index was good enough to keep the bulls away. Energy services took a move to the downside which diverged with crude oil prices. Sector related stocks tend to lead the underlying commodity. With the XLE bouncing off its 50-day MA we can look to crude oil prices to do likewise. Interestingly, the semiconductor index which gave up channel support so eagerly and foreshadowed the eventual loss of similar support in the tech indices [NASDAQ and NASDAQ 100] has managed to dig in at the 200-day MA - unlike the diving tech indices. If the semiconductor index can hold on to this level it may drive demand for buyers to step in and take the tech indices back to their respective 200-day MAs. Large caps [Dow and S&P] and the small cap index [Russell 2000] have little going in their favor. The Russell 2000 is looking particularly ragged with support at 570 still some distance away. The lower volume in the Dow is the best the bulls can look to. When can we expect the selling to stop? Secondary indicators [$NASI, $NAA50 and $BPCOMPQ] are pulling away from their 5-day EMAs but still have room to run to reach oversold levels. Not a time to be 'catching-the-knife' here.

Target hits: none

Stop hits: These have been taken over the last couple of days due to travel commitments; AIZ, KEYS, MCK, MTIX, MIL, SPNC, TWTI, PRTR, LFG, SFCC, SHPGY, SRT, TRN, TRZ, WITS, and ZHNE.

Oct 10th: Another day of losses on mixed volume. The semiconductor index was the chief loser on the day as Xilinx warned on a Q2 sales dip. The 3% loss on the day was enough to break channel support. A similar move in the NASDAQ and NASDAQ 100 is a distinct possibility and this will likely keep the bulls in check for another day. Monday's lower volume in the NASDAQ was testament to the disinterest as tests of support are typically associated with increased volume. Secondary indicators [$NASI, $NAA50 and $BPCOMPQ] continued to slide and technically there is no evidence this is going to change soon. The large caps had another disappointing day as the Dow and S&P made inroads back to last week's lows. The 200-day MA has become critical support in a number of indices including the NASDAQ, NASDAQ 100 and Russell 2000. No need to throwing money at the market yet.

Breakout targets met: none

Breakout failures: HYGS featured for August 31st as it had done before on March 10th. Monday closed on a bearish 'three black crows' sequence which killed the most recent bullish position. The play closed for a 11% loss. ISE featured most recently for October 5th and as a Gold Member play for August 22nd. The breakout play closed for a 5% loss, the Gold Member play for a 9% gain. LF also struggled on its big one-day loss on light volume. Further losses look likely here. The stock first featured as a breakout for August 5th and again for September 16th. The August feature closed for a 6% gain, the September feature for an 8% loss. OPTN was whipped out of its position following an earlier downgrade. The stock featured for September 27th and February 24th. The February feature closed for a 1% loss and the September feature for an 8% loss. AFFM was a Gold Member pick for August 31st which gapped lower on the open but rallied to meet its stop price. The play closed for a 5% loss.

Oct 9th: Thankfully Friday did not bring the kind of carnage experienced over the early part of the week. None of the remaining Gold Member or Breakout plays were stopped out so this was of some consolation. As for the markets, few traders were willing to step up to the plate. Bears won't be tempted to jump in after days of heavy selling and will sit it out until there is a relief bounce to short. Bulls will be conscious of this and will be reluctant to play into the bears hands, particularly as the bulls seven days of gradual buying was so easily undone by two days of selling. Secondary indicators [$NASI, $NAA50 and $BPCOMPQ] are firmly in the red and bulls who follow these normally reliable indicators will have endured two painful whipsaw periods for September and will be hesitant to jump aboard the next bullish signal. Volume was light - adding to the overall indecision. Some could look to the developing price channels in the NASDAQ, NASDAQ 100, semiconductor index, and Russell 2000 for support, but unfortunately for the S&P this was lost too.

Breakout targets met: none

Breakout failures: none

Oct 6th: Short and sweet for tomorrow as I pick up the pieces left by the beatings in my Gold Member and Breakout picks. It will take the weekend for me to sort through the lists to clear them up of recent victims. There are no breakout stocks for Friday - my scan turned up eight candidates none of which looked particularly attractive (EMFP, GDYS, GNBA, IMMC, NMG/A, SVA, VSAT, VIVI). The story for the week will be the various 'three black crows' left behind in the NASDAQ, NASDAQ 100, semiconductor index, and S&P which will mark supply/resistance on any attempts in these markets to rally next week. The higher volume will be the icing on the cake for the bears. Bulls made a brave attempt to rally into the close - but it remains to be seen if these value buyers would be prepared to hold on a move back to recent lows. Probably the most interesting aspect from the day was the resistance break in the volatility index. Rocky times ahead.....

Breakout targets met: none

Breakout failures: Too many to run through individually but using the 'Search site' link above will give you further information and/or checking my Public Stockchart list (please 'Vote' at the bottom of the page of my Stockchart list). The recent set of victims should be the end of it for a while as bulls attempt a belated pullback; ARTC, BGC, GENZ, GLBL, GTI, MLNM, PDFS, HAWK, SLXP, SMBI, BMRN, CBI, DRRA, ENB, MTLG, NSM, PTMK, TRN, and UNT.

Oct 5th: Probably one of the most painful two-day bull traps. Bears don't have all their own way, chief amongst them was the lack of volume. But it was still a bull psyche killer day. The NASDAQ is at a Custer's last stand at 2,100 as slow stochastics, MACD, and on-balance-volume turned negative. The NASDAQ 100 held onto its lead index title as the days losses were not enough to turn all the technicals sour (but has put them well on their way to doing so). The only index to make modest losses was the semiconductor index which closed below its 20-day, and 50-day MA but is still some 10 points away from September lows. Tech is traditionally seen as a leading sector of bull markets (large caps are always laggards) and if this index can hang on we may yet have a buying opportunity here. Chief losers on the day were the large caps. The Dow and S&P each lost near term support but as lagging indices these will be the first to feel the pain. Former Dow support at 10,350 was of little help today and the S&P cut through whatever support it had (channel support and the 200-day MA). But more worrisome for the bulls was the major swing from 2-month resistance to a loss of near term lows in the Russell 2000. Large cap damage doesn't kill nascent rallies, but small cap damage can be terminal.

Secondary indicators [$NASI, $NAA50 and $BPCOMPQ] took a painful 6-days to turn bullish, but only required 2-days to return bearish. All three indicators are now back on the bearish side of the camp. Cash is king and bears seem to have it all their own way - but everything is so negative out there that the recent sell off appears too obvious (and markets hate the obvious). There will be further occasions when the secondary indicators will provide better buying opportunities. For those who bought the two 'buys' in September, bite the bullet take the losses and step aside from the market. Keep your exposure low if you still want to be in the market. Short side positions are not necessarily the strongest position to be in here and this could prove to be important over the coming weeks.

Breakout targets met: none

Breakout failures: The Fall Sales came to town and there were plenty of casualties; PQUE was an excellent example of trying to second guess a breakout. Instead of leaping to new highs following recent strength it left behind a very neat double top. The stock featured as a Breakout for October 4th, September 20th, and August 9th. The stock closed for a 6% loss, 13% gain, and a 32% gain. PWR left a bull trap following two days of heavy selling. The stock featured for September 30th and August 31st. The stock closed for a 4% loss and a 6% gain. RIMG featured as a Breakout for September 20th and July 22nd. Each play closed for a loss; 6% and 3% respectively. RSTI hit its tightened stop after some heavy selling on the day. The stock featured yesterday and as a Gold Member pick for July 6th. The Breakout play closed for a 4% loss, the Gold Member pick closed for an 8% gain. SSFT suffered the second day of heavy selling to hit its newly raised stop. The stock featured as a breakout for August 5th and September 19th closed for a 16% gain and a 2% loss respectively. Gold Member pick AHM was an oversold play which nicked its stop after modest selling. It featured for September 30th and closed for a 4% loss. AOI was another oversold play for October 3rd which hit its stop also for a 4% loss. IVN was a failed Gold Member breakout from September 30th. The play closed for a 6% loss. NTGR was another Gold Member breakout for September 13th to struggle and stumble, hitting its stop price for a 7% loss. UHS was a Gold Member oversold play for September 23rd which couldn't stall its decline. The class B stock closed for a 3% loss. VSTA was a Gold Member oversold play for October 3rd couldn't escape the sell off either. The play closed for a 5% loss.

Oct 4th: The markets had threatened a drop for a number of days so today's heavy volume stock sale was of little surprise. What will be important is how the secondary indicators [$NASI, $NAA50 and $BPCOMPQ] hold up in the face of this selling. Interestingly enough the $NASI and $BPCOMPQ gained on the day, although the most sensitive indicator, the $NAA50, lost a slice of its prior gains. No market escaped a distribution day - the Dow and S&P managed to log a second distribution day in a row. Within markets each had their own story. The NASDAQ rebounded from the head-and-shoulder neckline resistance while the NASDAQ 100 reversed off 2-month declining resistance much as the semiconductor index had done the previous day. The S&P managed to a minor support breakdown along with the Dow. Watch how 10,350 and 1,205 hold as support in these markets. The Russell 2000 had a day similar to that of the NASDAQ 100. So far, what we are seeing is a buyers pullback. When the secondary indicators turn south we will have a shorters market.

Breakout targets met: none

Breakout failures: GES featured as a Gold Member short play for August 19th and September 22nd, hitting its lowered stop at Tuesday's highs. Short side play still looks favored given today's test of the 50-day MA failed to break it.

Oct 3rd: It remains a very tricky market. On the positive front we had a return to bullish conditions following the EMA crossovers of the $NASI and $BPCOMPQ. However, the technical picture of both these secondary indicators remains weak and each is vulnerable to whipsaw. But what may keep the bull's fire stoked is the strengthening bullish momentum in the $NAA50. What of the market indices? Irrespective of their position relative to resistance, all markets are showing bullish technical strength; i.e. each market has issued a MACD trigger 'buy', on-balance-volume sits above its 20-MA, slow stochastics are over the bullish mid-line (50), and with the exception of the Dow, all markets are above their 20-day MA.

What could the bears take from the day? Well the Dow and S&P failed to break resistance, instead both churned around their moving averages on higher volume. The tech indices [NASDAQ 100 and NASDAQ] did likewise below 2-month resistance - plenty of volume but not much upward momentum. Only the semiconductor index made an attempt to break 2-month resistance (black hashed lines on Stockchart.com charts) but couldn't hold it into the close.

What to do? Bulls have a slight edge and long side positions are favored given the bullish technicals of individual markets and the position of all three secondary indicators [$NASI, $NAA50 and $BPCOMPQ] relative to their 5-day EMAs. However, the secondary indicators do not sit at a deep oversold level typical of healthy bottoms and we may be looking at another case of whipsaw as occurred on September 8th. I would keep the bulk of ones assets in cash for now and start increasing market exposure once 2-month resistance is breached in the tech markets, and the technicals (i.e. MACD and +DI/-DI) of the secondary indicators turn bullish. Markets look ready for a few days of downside and this could be a good opportunity to buy as they test September lows assuming secondary indicators hold their bullishness (and by that I primarily mean the $NAA50).

Breakout targets met: none

Breakout failures: CHRZ didn't last 24 hours as it sold off into the last hour of trading, hitting its raised stop. It featured for yesterday and on July 25th. The latter trade closed for a 16% gain, yesterday's trade would have closed for a 5% loss. Dishonorable mention to SYNM which was killed on news it would abandon an appraisal well off the coast of Nigeria. The stock lost 36% on the day. It featured for August 23rd. BJRI was a Gold Member short play for August 29th. Monday's rally and bounce/sell off from the 50-day is still bearish, but for the purposes of my analysis the recommended protective stop price was hit. The play closed for a 5% loss. KOMG from September 21st was another short victim in this whipsaw-like market. It too closed for a 5% loss.

Oct 2nd: Friday continued the trend from Thursday although up side volume disappointed. Bulls sit at an interesting juncture. The NASDAQ is right up against head-and-shoulder neckline resistance, wedged below it and the 50-day MA. On the flip side, the NASDAQ 100 managed to finish the week above neckline resistance and above all major moving averages, but is up against 2-month declining resistance (black hashed line on public Stockchart.com chart). The semiconductor index sits in a similar predicament to the NASDAQ 100 and should be watched early next week for further bullish gains. The large caps [Dow and S&P] managed to string together a number of bullish days, closing over all major moving averages but have yet to break resistance connecting September reaction highs. Monday could be the day as there is no room for further gains without creating a breakout.

The long term picture remains constrained by the secondary indicators [$NASI, $NAA50 and $BPCOMPQ]. We still need to see a bullish crossover of the 5-day EMA in the $NASI and $BPCOMPQ with a supporting crossover in the +DI/-DI line which had failed to materialise for the September 8th bullish trigger. Gold member featured stocks should out-perform breakouts over the coming couple of months. The September 16th ETF short play remains intact for now.

Breakout targets met: none

Breakout failures: HURC was a Gold Member short feature for August 23rd. The stock breached near term resistance and closed over its 50-, and 200-day MA, for a new long play using a stop on a loss of $14.80. The company announced record orders during the EMO Hannover show. Look for a move to $19.50. The short play closed for a 9% loss. MCHP was another short feature from September 22nd which closed for a 5% loss. There was no company specific news for the gain. The stock closed the week below its 50-day MA and still has short-side merits even though my suggested stop price was hit. Stubborn bears could run a stop around $31 which is above the upper Bollinger Band range.

Stockchart public list - please remember to vote!

Back to top