Markets once again demonstrated classic bearish characteristics Wednesday, as the day started out brightly and finished dimly. The Nasdaq closed below the big round 3000 number for the second consecutive day, but did find 40 week support, although it looks tenuous. The S&P 500 is less than 1% away from its own big round number of 1400. Although we know breakouts rarely work in this type of environment, today two legitimate ones were recorded. LL took out a 54.10 flat base trigger, and POL took out its own 17.63 flat base pivot. With the volatility we are witnessing as of late it is indicative of market tops. Lows are normally formed with smooth rounder bottoms, whereas tops as formed with wide, choppy action. Perhaps the markets are pricing in a Romney victory (not be political, just what the polls are showing), and that would be an end to the beneficial effects of QE infinity. Of course market climate can change, as it seems everyone on my stream is negative. Seems like America is going on a diet as the restaurant stocks continue to falter. Stocks in the group performing poorly include CMG EAT JACK MCD BWLD just to name a few. And for the perennial brokenhearted Knick fans, looking forward to another NBA season, MSG is riding 10 week support, and sporting, pun intended a 44.85 flat base trigger.
Stocks that can be shorted as they lose 10 week support and their sell stop spots are EL 61.20, DRC 52.60, CTRX 46.85, WMT 73.75, JAH 51.65. Stocks that lost 10 week support today were UNP RIG CHRW KMB CFX EGO M WYN APH. Stocks that can be shorted as they lose 40 week support and their sell stop spots are DRI 51, TDC 67.75. Stocks that lost 40 week support today were TSS MMM HAL SCSS SLB.
Stocks that can be shorted at 10 week resistance are TWTC 26, VRSN 48, TSCO 97.05. Stocks that met 10 week resistance today were HUN SYY CRM EXPE KKR GGC DDS ETN CBE STI NOV ASNA. Stocks that can be shorted at 40 week resistance are NCR 22, TXT 25.75, OMC 49.60. Stocks that met 40 week resistance today were SWK AXP HOT MXIM DHR NBL CHD NXPI.
Stocks that can be put on a watch list and bought as market climate improves and their specific triggers are flat bases FLS 135.67, PPG 119.96, DOX 33.89, CHS 19.53, ITW 62.19, AZPN 26.43. Cup with handles are CBD 49.18, GME 24.59, 3 week tight triggers are MHP 56.74, FNF 23.37, and AWK 37.96 in a double bottom pattern.
Stocks that can be bought as they retest prior breakout triggers are LOW LZB PHG. LOW took out a 32.10 cup with handle trigger on 10/15. It is taking advantage of housing strength, and showed relative strength Friday on a horrible tape. HD its close cousin is still nicely ahead of its 3 week tight trigger breakout at 57.28 on 9/13. Keeping on the housing plays LZB took out a cup with handle breakout of 15.78 on 10/18. Their was nothing lazy about its breakout that came on enormous volume. PHG took out a 25.09 flat base trigger on 10/17. It is a European electric play, and SI, in the group is holding 10 week support.
Stocks that can be bought as they reclaim their 10 week MAs and their buy stop spots SNPS 32.95, MYL 24.20, SIMO 15.30, HLS 23.35, MR 34.85, TGT 63.95. Stocks that reclaimed their 10 week MAs today were AME TMO PNRA LMT WWWW FWLT. Stocks that can be bought as they reclaim their 40 week MAs and their buy stop spots are ITT 21.25, KMI 34.95, IPI 23.10, TX 21.25. ARG reclaimed its 40 week MA today. ERJ took out its 40 week MA and reversed to close below that number. It was the catalyst and the trade must be exited by the end of the day.
Stocks that can be bought at 10 week support are PKG 34, EBAY 48.05, CLGX 26, INXN 21, LNC 24.10, BKD 22.75, PSX 44.45. Stocks that met 10 week support today were CHS RAX DLPH AMX NWS ROP TEX AIG. Stocks that can be bought at 40 week support are NUE 40, DAR 16.25, CBS 32.50, WWW 41, CELG 72.05. Stocks that STX TTM FLR.
The author is flat.