brettstockblog's Blog : BTDStocks.com Tuesday, April 12, 2011 End-of-Day Update

Investors began earnings season bidding stock prices lower as the major indexes declined between 0.8% and 1.0% after Alcoa (symbol: AA) beat their EPS forecast but missed the sales forecast. There was probably more to the reason for the declines than just Alcoa.  The long side has become a crowded trade in many equities with probably few buyers remaining to drive stock prices higher at least in the short term.  The action indicated investors were selling stocks and market breadth was decisively negative. Energy which has been one of the few sectors outperforming the S&P 500 so far this year declined 3.1%. Oil price fell 3.5% settling near $106 per barrel. Gold fell as well down 0.7% to 1,453 an ounce. Some of the risk is clearly coming out of the market. The Semiconductor Index (the SOX) fell 2.1% nearly double the amount of the Nasdaq Composite. The Semis are important to follow as their components are required in many of the items we use in our daily lives. Semis are many times a leading indicator of where the economy and the stock market direction are headed. The recent performance of the SOX has been negative. The Volatility Index (the VIX) was up 11.3% intra-day today and was indicating investors were becoming fearful. By the closing bell the VIX closed up only 3.1% and showed today's selling didn't necessarily increase the level of fear in the stock market. The market remains in a high complacency low volatility environment. Based on today we are lowering the support/resistance level for the DJIA (DIA), S&P 500 (SPY), and Nasdaq Composite (QQQQ) (see below). The S&P 500 (marginally) and Nasdaq Composite are now below their 50-day moving averages.  The current stock market action indicates you should be cautious right now with adding to stock positions. Instead, make sure to protect profits and keep losses small. If you need to own stocks, please see our watch list below. In our watch list today we added an additional position in Cameco Corp. (symbol: CCJ) at the intra-day price of $27.65. We now have two positions in our watch list for CCJ. To read full article, please visit: www.btdstocks.com/No positions in securities mentioned.