The indices had a strong slide in the afternoon that brought them back sharply into the loss column. After a strong morning rally to new highs, the indices failed below resistance, particularly on the SPX, and rolled sharply, closing near the session lows. Net on the day the Dow was down 173.47 to close at 8300.02, the S&P 500 was down 17.27 at 893.06, and the Nasdaq 100 down 10.73 to 1401.88. The Philadelphia Semiconductor Index (SOXX) was up 4.12 to 263.94. Advance-declines were 21 to 9 negative on New York and about 2 to 1 negative on Nasdaq. Up/down volume was 4 to 1 negative on New York on total volume of about 1.3 billion. Nasdaq traded over 2.1 billion and had a 2 to 1 negative volume ratio.
All nine sector fell, with financials dropping 3.9%. Materials was also a laggard, shedding 3.1%. The tech sector outperformed on a relative basis, falling 0.7%.
Futures are flat-to-slightly lower after hours. S&P 500 futures, at 891.10 are down by one point and Nasdaq 100 futures, at 1401.75, are below fair value by a half point.
Today was not the end of the world for the longs by any stretch but it does warrant caution, by that I mean scaling out of profitable positions, if not out right sales, but at the very least raising your stops to protect profits. When I saw the market getting sloppy I called for a sale of PRGO and a sale of half INV and a stop raise, that at the very least would give you a buck profit. PRGO was good for about $1.60 from the trigger and the partial sale on IMA was good for $1.50. These are only my guidelines but in this market I want you to train yourselves to take profits, many of these stocks still have terrific charts.
It’s only one day and I still think the bulls could have some breath left in them, as I mentioned last night there may still be some that feel the need to chase performance into the end of month. This entire rally has been on fairly light volume so it won’t take much to turn the tide lower. Another day like today and the bears could feel empowered to take charge again. The shorts I listed on Monday are still a fair amount away from their trigger prices, as I tried to put in place the most low risk entries I could, when those triggers hit it will mean the market’s sentiment has changed and we could see some quick and powerful gains, if they need to be adjusted I will let you know.
Fifteen companies are confirmed to report earnings before the open tomorrow, including Costco (COST)
In economic news, April durable goods orders and weekly new unemployment claims are both due at 8:30ET, followed by April new home sales at 10:00ET.
Crude oil will be in focus with OPEC meeting in Vienna. The cartel is expected to leave output unchanged. In addition, the weekly crude inventory report is scheduled for release at 10:30ET.
Any midday updates I will notify you on twitter but will post here. Here is a materials name that could get interesting if it triggers. If things get active I will posting to the blog more during the day.
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