The market continues to get hit hard as sellers overpower buyers and prices push further south. Today the headlines revolved around housing which showed that sales of previously occupied homes fell last month to their lowest level in 15 years. For some reason I don’t see why this was not expected given the first time home buyer tax credit being done and the state of the current economy but anyway…
Bottom line is that the market has had three distribution days the last four sessions and is showing no strong signs yet of being oversold. The indices have now made lower lows and the next major support area for the S&P 500 is down at 1010.91 lows from July 1st.
While some stocks have broken out of decent bases (see below) despite the market woes I still am remaining fully in cash at this time. Too much volatility and risk to participate in going long unless you are day trading.
S&P 500 (SPX) – The market’s outlook has not gotten any better the last few weeks as sell pressure continues to come in strong. There have now been numerous distribution days and the rising wedge + double top patterns both have proven to be effective topping patterns.
Apple (AAPL) – Apple is nice to note here as in purple we can see the stock broke out in mid June and failed (collapsed back into its base), then in orange trading in a range and made lower lows which lead to the blue support which has just fallen today. This stock is most definitely an avoid at this time and could move much further South.
Aruba Networks (ARUN) – This stock is in a descending channel with support both at the 50 day moving average and $16 support in purple. A high volume move through $17.20 accompanied by an uptrending market could make for a decent entry to try a few shares.
Saleforce.com (CRM) – Earnings helped this stock to surge to the upside and mark fresh all time highs above $110 last week. The stock is now a watcher until it can setup a fresh flag or base.
Netflix (NFLX) – After piercing $140 intraday the stock reversed back down on higher volume marking a fresh top. Now with the market under pressure this stock is taking a much needed break with today making lower lows under $124. A fresh base will be needed before this stock can be considered again. Look for short term support at the 50 MA ($117ish).
Isilon Systems (ISLN) – This data storage stock surged through my $18.10 buypoint as a bidding war for competitor 3par has begun and investors speculate over who may also be snatched up. This gapped through my buypoint but if you did get lucky to nab some then the stock is all speculation from here forward.
Radware Limited (RDWR) – Beautiful heavy volume break through my $24.05 buypoint today even with a sour market. Stops can be as tight as $23.50ish at this time.
Spider Gold Trust (GLD) – Interesting to note the bullish engulfment that took place today for this gold tracking etf which could lead to higher prices and perhaps a retest of its all time highs. Gold is currently attractive as a hedge against the market.
Akamai Technologies (AKAM) – To see this stock gap at the open this morning was a surprise considering the size of its move as it broke through my buypoint of $46.10 last Friday. The market was sour though today and it turned up sellers. The stock is still technically ok if you can stomach the volatility. Keep an eye out for a bull flag that could form here in the near future.
Stay frosty out there .