From: Fallondpicks.com
Friday's action looked bad on paper if you are a bull. But the various bearish engulfing patterns on the charts occurred on low volume, making the damage look worse than it was. In addition, no key support levels were lost on the day. Still, markets are due a cool off period and now is a good as time as ever for one. Hardest hit was the S&P. This index lies closest to support derived from October and left behind new resistance at 1,310. The correction occurred at the same point of the MACD correction in its bearish divergence (a bearish confirmation signal). Monday will be a fun day for the index. The Russell 2000 was next up in terms of losses, with the 20-day MA (and October support) nearby to lend support. Friday's engulfment covered the previous three days of bullish action. No MACD "sell" signal yet, but there was in the CCI. Market leadership has switched from the Russell 2000 to the NASDAQ. The tech averages [NASDAQ 100 and NASDAQ] were hit by selling in the semiconductor index. The latter index closed below its 20-day MA, but technicals remain firm and congestion around 500 should help drive supporting demand. The NASDAQ sits at a near term support line from March. Technicals are okay and there is still some room to go to reach the 20-day and 50-day MA. The NASDAQ 100 fell short of testing 1,761, but watch for buyers to step up at near term support of 1,700. Finally, the Dow closed below the 20-day MA and pushed away from former broadening wedge resistance. Next week should see a test of October support and the 50-day MA. What of secondary tech indicators [$NASI, $NAA50 and $BPCOMPQ]? The whipsaw friendly $NAA50 switched back in favor of the bears with a 5-day EMA crossover, but it also cut below a near term support line from March. The remaining two indicators managed light losses, but remain above their respective 5-day EMAs.
Newsletter update (To subscribe, buy monthly, 6-month, or 12-month membership from the right hand margin):
ARNA hit its stop after four weeks of losses. The stock also closed below its 50-day MA earlier during the week. The January Breakout play closed flat. The December 13th Subscriber play closed for a 36% gain. AHT clipped its stop by a penny. The January 23rd Breakout play closed flat, but the February 27th Breakout play closed for a 5% loss. CELG suffered the second day of heavier losses, hitting its stop and closing below the 50-day MA. The stock featured as a Breakout for December 30th, February 23rd, February 27th, and March 16th; each play closed for a 19% gain, 7% gain, 4% gain, and a 6% loss respectively. PR featured as a Breakout for February 13th, February 28th and March 30th, each play closed for a 13% gain, 4% gain, and a 2% loss. ED was an oversold Subscriber play from April 5th which hit its stop price for a 1% loss. XGM woes continued to pressure this value play. The March 10th Subscriber play closed for a 6% loss.
Fallond
