Chart Courtesy of StockCharts.com
The Wilderhill Clean Energy Index fell below the 200 area.
Chart Courtesy of StockCharts.com
Crude oil prices now have support at $60.
Chart Courtesy of StockCharts.com
The Philadelphia Oil Service Index (OSX) pulled back below 200.
Chart Courtesy of StockCharts.com
The Amex Oil Index (XOI) is still trading below 1200, the key chart point.
Chart Courtesy of StockCharts.com
Flying Blind
The market is likely to gyrate wildly over the next few days, as multiple crosscurrents hit the markets from different sides.
The technicals certainly look worse after the crash on 2-27. But, that's one day's action, and we've seen the market survive similar episodes in the past.
Still, the bullish thesis for the stock market might be tested over the next few days.
For now, we'll stick with our forecast. From a longer term stand point, based on historical trends, this should be a positive year for stocks, given the fact that it's the third year of the Presidential Cycle, which calls for rallies in the third and fourth years of a presidency.
Our long term forecast remains upbeat, unless the major indexes fall convincingly below their 200 day moving averages.
What To Do Now
The next couple of days will tell us a lot as to what's likely to be next. Stay patient, keep a good eye on sell stops. Aggresive traders should look for short sale opportunities in overextended sectors.
The energy sector is again showing signs of life, and should be looked at seriously in the short to intermediate term. See our energy section for new picks in both traditional and green energy.
The REIT sector has been weakening and is worth a look if you're an aggressive trader with experience shorting the market.
Remain patient, selective, and vigilant. Above all, stick with what's working, which in this market, could vary from day to day.
Focus on strength, but don't fall in love with any particular stock, as news could hit any position hard during times such as the current ones.
The Fallen Angels, have remained a very steady portfolio, as has our growth stock section. Look for ideas there, but don't ignore energy, metals, and all our ETF models.
Visit all our individual sections, both our ETF and individual stock picks daily for new ideas, and changes to open positions.
Now, more than ever, it pays to be careful in any market. So, be very methodical about monitoring portfolios, adhering to trading rules, and ratcheting up sell stops is clearly still here.
If the market turns south, your chances of preserving your profits by following a sound trading plan, such as outlined above will increase.
Second guessing decisions, and hoping that things will turn out o.k. in the long haul, is the recipe for disaster at a time like this in the market.
Check all our sections daily. See tech, biotech, Fallen Angels, and timing systems for the latest adjustments. Our ETF trading systems for energy, Spyders, Small Caps, and technology have also been updated.
Chart Courtesy of StockCharts.com
Chart Courtesy of StockCharts.com
The diamonds were significantly dulled, as the Dow Industrials crashed and burned on 2-27.
The ETF fell below its 50 day moving average, but held above the 200 day average, near 118. Still, the market, and the diamonds have a lot of room to make up, and are likely to regain some volatility in the short term.
From a trading standpoint, this would be a good time to pay close attention, but not necessarily to jump in too hastily.
The next few days should give us better clues as to what to do next.
Chart Courtesy of StockCharts.com
The Amex Biotech Index (BTK) fell below key support on 2--27. The 780-800 area is important resistance.
Chart Courtesy of StockCharts.com
The Amex Pharmaceuticals Index (DRG) weakened significantly on 2-27. 360 is critical resistance. 350 is important support.
Chart Courtesy of StockCharts.com
The Philadelphia Semiconductor Index (SOX) held up better than the market on 2-27.
Chart Courtesy of StockCharts.com
Small stocks made new highs recently, but were not refuge on 2-27.
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