Investor participation picked up somewhat in today's session as the major indexes (except for the DJIA) gained. The S&P 500 (SPY) and Nasdaq Composite (QQQQ) now sit 0.6% and 1.4%, respectively above their November highs on a closing basis. Only the DJIA (DIA) sits below its November high. We are leaving the support/resistance levels the same for the DJIA but we are raising the support and resistance (slightly) levels on the S&P 500 and Nasdaq Composite based on the trend (see below). However, the Volatility Index (VIX) on a closing basis is at its lowest point right now since March/April. Recently we pointed out that the market was doing a good job working off the complacency of investors and we expected a rally for stocks. So far we have gotten a rally of approximately 4% in the S&P 500 but the market has quickly swung from being fearful to once again becoming complacent. In addition, many of the breadth indicators we follow are not as strong as they were when the market was making new highs in April and November. As a result, the prudent approach is to use the current favorable stock market direction trend to sell into strength. If you need to be in stocks, please see our watch list below for stock ideas. In our current watch list we are removing Digital Realty Trust (symbol: DLR) at tomorrow's market open price. We didn't like the action in the stock today as it closed below a support level we were watching. At the close today this stock has shown a favorable return of 1.3%, not great, but better than a loss. So far three stocks have shown favorable results as a result of being added and removed from our watch list. Tonight we are adding a page to our website called 'Watch List' where you can track the performance of the current/closed stocks on our watch list. Click here to access it.
SUMMARY
DJIA: Flat to 11,370
S&P 500: Up 0.4% to 1,233
Nasdaq Composite: Up 0.3% to 2,617
BREADTH FOR NYSE
Advancing Issues: 1,692
Declining Issues: 1,355
Advance/Decline Ratio: 1.2 to 1
New Highs: 144
New Lows: 20
High/Low Ratio: 7 to 1
SUPPORT/RESISTANCE LEVELS
DJIA: 11,204/11,382
S&P 500: 1,220/1,234
Nasdaq Composite: 2,575/2,617
SECTOR ANALYSIS
Financials was the best performing sector up 1.2% while Technology was the worst performing sector up 0.1%.
Other Sectors:
Consumer Discretionary Up 0.1%
Consumer Staples Up 0.3%
Energy Up 0.2%
Health Care Up 0.2%
Industrials Up 0.3%
Materials Up 0.5%
Utilities Up 0.4%
WATCH LIST SYMBOLS
(APOL)-since 10/28/10
(SH)-since 11/12/10
(NUVA)-since 11/12/10
(DLR)-since 11/26/10-close at market open on Friday, December 10, 2010
(CSCO)-since 12/2/10
(PSQ)-since 12/8/10
(UUP)-since 12/8/10
(EUO)-since 12/8/10
No positions in securities mentioned.
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December 9, 2010
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