Weekend Commentary from Fallondpicks.com

Newsletter, Members Click HereA weak, positive day, to close the week. Wednesday's break of support for the NASDAQ and NASDAQ 100 was not challenged. Neither was the Dow able to regain the support it lost on Thursday. Although, the S&P was able to close the week along July-September support. The trouble also spilled over into the Russell 2000, where it reversed its break of May-September resistance, and its break of the 200-day MA, to close below May-September resistance. The Russell 2000 finished the week just above the 50-day MA, but has left behind what looks to be a bull trap. Similarly, the semiconductor index reversed what had been a nice. mini-breakout, only to close on the 20-day MA. The index remains vulnerable to further weakness as the drop triggered a 'sell' in its MACD trigger line - reversing the 'buy' trigger from July.

The individual markets all seem to point to further weakness. But, each has done enough from July to at least offset what could have been a total meltdown from the May-July decline. Nothing is sacred, and shifting money off the table at this stage would be prudent. A retest of July lows looks the most likely scenario from now into October, but a break of September highs would be reason enough to start buying back into the market.

Newsletter update:

The week's poor action continued to knock out September stops. CLB featured as a Breakout for September 6th and July 28th. The former play closed for a 9% loss, the latter a 3% gain. ASFI was a Subscriber pick for September 5th, which hit its stop at the very lows of the day. The play fell for a 7% loss. ENDP was a Subscriber pick for July 3rd, which fell to the 200-day MA, but still managed to hit the stop price for a 7% loss. TDW wasn't able to hang on to the 200-day MA, failing to break on its second attempt in late August. The August 2nd Subscriber pick crashed through its 50-day MA, and stop price, for an 8% loss. WOR was a Subscriber pick for September 6th. The gap breakout failed to hold as support (although it is a fine call - some may consider Friday's tight trading as bullish). For my purposes it is a stop hit for a 6% loss.


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