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Intraday Market Notes & Observations
Bulls halt opening sell-off
July 10, 2014

1:45 pm ET: Intraday support/resistance:
SPX 1953/1969
DTX 815.5/826.5
DJIA 16805/16980
Nasdaq 4351/4429
RUT 1151/1169
VIX 11.55/13.25 (VIX falling intraday is bullish but rising overall is bearish)
Trin range: 0.65 - 0.9 (bullish)
Average VWAPs: +158/-24 (very bullish)

Bulls trying to tighten the downward spigot
July 9, 2014

1:30 pm ET: Intraday support/resistance:
SPX 1965/1972.9
DTX 817.75/828.25
DJIA 16915/16965
Nasdaq 4388/4422
RUT 1170/1178
VIX 11.5/12.1 (falling VIX is bullish but contrarian)
Trin range: 0.65 - 0.9 (falling Trin is bullish)
Average VWAPs: +77/-37 (mildly bullish)

The bulls trying to stem the sell-off
July 8, 2014

Intraday notes (2:25pm ET): There's a bit of bifurcation in the market today. The intraday levels for all of the major averages listed below are showing more room for movement to the downside except for the market-leading Dow Transport Index (DTX). The calculations for its levels show there's still some room for upside movement, and that's one good sign for the bulls. Another good sign is that the Trin reached a mid-day high of 1.78 which is considered a contrarian number. That was the signal for the bulls to charge back and charge they did. They were able to regain most of the opening losses but it remains to be seen whether they can keep up their stamina or whether they'll run out of gas before the market closes. Volume activity is heightened on both the buy and sell sides with sellers winning out at the moment. Right now, it's a coin toss which side will end up ruling the day.

2:00 pm ET: Intraday support/resistance:
SPX 1957.6/1976.4
DTX 812.8/822.2
DJIA 16878/17022
Nasdaq 4367/4444
RUT 1165/1185
VIX 11.7/12.85 (rising VIX is bearish but still overall bullish)
Trin range: 1.1 - 1.8 (bearish to bearish contrarian)
Average VWAPs: +64/-51 (bull/bear battle)

Market Movers: Tech breakouts & Commodity Breakdowns
July 7, 2014

Today's market sell-off wasn't completely unexpected considering that the VIX slid to its lowest level in years last Thursday. The good news is that both the market-leading Dow Transport Index (DTX) and the Dow Industrials (DJIA) both managed to close above near-term support levels. However, if the DTX can't hold the 820 level, expect a drop to intermediate support at 810 and possibly major support at 800. Similarly, should the Dow close below 17000, a drop to the 16750 area would be in the cards. The prognostications of future earnings made by market-leading companies during the upcoming earnings season will likely have a big impact on the final direction of this market. The next couple of weeks could be critical ones, so don't stray too far from your computer!



Today's Tech Winners
Apple (AAPL, $96) broke through $95 resistance on heavier than normal volume. Its all-time split-adjusted high is $100 and it sure appears as if it's going to be testing that level very soon. The stock is cheap (P/E = 16) compared with its peers and I do think that most of the negativity that drove the stock down following the passing of Steve Jobs has been wrung out of the price. The options market is also confirming growing optimism by the expansion in the open interest of call options at higher strikes.

The other technical tech event today was the breakout in wireless communications equipment maker BlackBerry (BBRY, $11.21). The stock has been floundering for a year but lately its chart has turned bullish. Today, the stock broke $11 semi-major resistance on heavier than normal volume (which is tougher to do in the summer because of lower volume in general). It's not out of the woods yet and more risk-adverse investors may wish to wait until it can clear major resistance at $12 before entering a position. Technically, if the stock jumps above the $12 level, it will have made what is known as an island reversal -- a very bullish pattern.

While investors gobble up these tech fruits, they're passing on other parts of the food pyramid...

Today's Commodity Losers
Corn (CORN, $28.50) has shucked roughly 45% of its value since early 2013 and dropped to a new four year low today. Also getting cut was Wheat (WEAT, $13.41) which is testing its all-time low put in back in February. Today's sell-off helped to nudge the Grains etn (GRU, $5.45) to a new yearly low. If these bearish charts are indications of an over-supply in both corn and wheat--both used to feed livestock--why is the Livestock etn (COW, $33.58) hitting a new high? Perhaps higher beef prices won't be on the menu for much longer...

Today's Sector Highlight: Food Products
Investors kept with the food theme by bidding up several stocks in the food products industry. Breaking out to new highs today were ag giant Archer Daniels Midland (ADM, $46.5) and Ingredion (INGR, $78.26), a maker of high-fructose corn syrup and specialty starches--America's favorite food additives. On a healthier note, Norway based salmon producer Marine Harvest (MHG, $13.87) continued its upward advance to move to yet another new high. Although volume has been heavy in this issue, it's been dissipating as the stock advances. This is typically viewed as a sign that interest is drying up.

Volatility jumps as major averages pull-back
July 7, 2014

1:20 pm ET: Intraday support/resistance:
SPX 1974.75/1984.25
DTX 817.75/829.25
DJIA 16975/17065
Nasdaq 4452/4478
RUT 1188.3/1204.7
VIX 11/11.75 (rising VIX is bearish but still overall bullish)
Trin range: 0.85 - 1.1 (rising Trin is bearish)
Average VWAPs: +29/-93 (bearish)

Bulls' starting their holiday party early
July 3, 2014

11:40 pm ET: Intraday support/resistance:
SPX 1975.75/1984.75
DTX 823.7/830.3
DJIA 16980/17060
Nasdaq 4464/4482
RUT 1203.5/1208
VIX 10.35/10.75 (VIX becoming very contrarian)
Trin range: 0.75 - 0.95 (bullish)
Average VWAPs: +54/-28 (very light volume trading)

Major averages in tight trading range on very light volume
July 2, 2014

2:05 pm ET: Intraday support/resistance:
SPX 1972.5/1976.7
DTX 821.1/825.9
DJIA 16950/16985
Nasdaq 4455/4470
RUT 1201.6/1207.4
VIX 10.5/11.2 (VIX becoming very contrarian)
Trin range: 0.55 - 0.75 (bullish to bullish contrarian)
Average VWAPs: +43/-83 (mildly bearish on light volume)

Investors still putting their money into banks
July 1, 2014

Nearly all of the sector etfs are trading in the green today with the glaring exception of mortgage REITs (MORT) and utilities (XLU), showing that investors are preferring risk (stocks) over over-valued income (bonds). The move back into equities prompted breakouts in many sectors including health related etfs--Pharma (PJP), Healthcare (XLV), and Biotech (BBH, FBT, IBB); tech related funds--Tech (XLK), Internet (PNQI, FDN), IT (VGT); and semiconductors (SMH, SOXX). Many individual issues in these names are becoming stretched on a valuation basis but there's still some bargains to be had in the more staid areas of the economy.

Two of these areas are banks and insurance companies, both of which saw solid gains today. (Check out today's 1-2% rallies in the bank etfs (KRE, KBE, IAT) and the insurance etf (KIE).) Most of the stocks in these groups that broke out to new yearly highs had price-to-earnings (P/E) ratios lower than the S&P's (currently at 19.7). Here's the list of the most compelling stocks from these two financial groups along with their P/E ratios and current dividend yields:

Banks: Int'l Bancshares (IBOC, $27.6; P/E = 13.1; D/Y = 1.8%) and United Bankshares WVa (UBSI, $32.8); P/E = 18.8; D/Y = 3.9%)
Insurers: Argo Group Int'l (AGII, $52; P/E = 9.2; D/Y = 1.4%) and Allied World Assurance (AWH, $38.5; P/E = 8.9; D/Y = 2.3%)

Major averages breaking records
July 1, 2014

Intraday Notes 1pm ET): Wowie!! The bulls charged back with a vengeance, insisting on being the host at this year's Fourth of July picnic. The major averages are literally jumping for joy with all of the ones tracked below popping out of short-term resistance at today's opening bell. Except for the Nasdaq, all of the major averages are notching new highs. It doesn't matter if the Dow Industrials don't cross the psychological 17000 level--they're already at a new all-time high. (The intraday levels below are suggesting that the index doesn't reach that level today.) The bulls are back, baby, and if you're on the short side, you're suffering. There is one ray of hope, though, for the bears, and that is that the VIX is nearing historic lows. Although the VIX can stay at depressed levels for a while, it eventually does make a return to the mean and when it does, it has the potential for an explosive move to the upside.

12:55 pm ET: Intraday support/resistance:
SPX 1962.25/1978.75
, DTX 820.75/830.25
DJIA 16825/16995
Nasdaq 4425/4480
RUT 1196/1216
VIX 10.9/11.4 (falling VIX is bullish/below 11 is extremely contrarian)
Trin range: 0.8 - 1.0 (neutral)
Average VWAPs: +97/-48 (bullish)

Muted market in holiday-shortened week
June 30, 2014

1:55 pm ET: Intraday support/resistance:
SPX 1958.5/1964.5
DTX 817.75/823.25
DJIA 16802/16873
Nasdaq 4396.5/4415.5
RUT 1185.25/1191.75
VIX 11.1/11.8 (VIX is bullish but still at contrarian levels)
Trin range: 0.6 - 0.95 (bullish)
Average VWAPs: +72/-46 (mildly bullish on light volume)

End of quarter rebalancing causing seesaw market action
June 27, 2014

Intraday Notes (2:35pm ET): The intraday pivot points that I use to determine the support/resistance levels were tough to pin down today due to the seesaw action in the major indices. This action is likely due to rebalancing in the Russell along with some end-of-quarter portfolio rebalancing. Most of the major indices show that more upside movement is possible before the close except for the Dow Transports (DTX) whose action for the rest of the day appears to remain contained within previous established boundaries. A falling VIX reflects the overall mildly bullish sentiment. I'm expecting that most of Wall Street will be on vacation next week (if their desks aren't vacant already) and portfolio managers are doing the bulk of their rebalancing today instead of Monday. If not, expect the herky-jerky market action to continue until Tuesday.

2:00 pm ET: Intraday support/resistance:
SPX 1952/1959
DTX 812/816
DJIA 16773/16847
Nasdaq 4371.5/4392.5
RUT 1175/1188
VIX 11.45/12.05 (VIX is bullish but still at contrarian levels)
Trin range: 1.0 - 1.45 (rising Trin is short-term bearish, but values above 1.4 are becoming contrarian)
Average VWAPs: +57/-43 (bull/bear seesaw)

Bulls trying to claw their way back
June 26, 2014

1:50 pm ET: Intraday support/resistance:
SPX 1944.5/1961.5
DTX 808.5/816.5
DJIA 16745/16875
Nasdaq 4347.5/4382.5
RUT 1173/1183.5
VIX 11.4/12.5 (VIX is bullish but still at contrarian levels)
Trin range: 0.85 - 1.1 (neutral)
Average VWAPs: +73/-38 (mildly bullish)

Income-ing! Investors opt for yield over appreciation
June 25, 2014

This morning's mixed economic news wasn't bad enough to continue the downside momentum so the bears used this as a time to take a nap. Although the bulls were able to gain control (for the moment), today's rally was fueled mostly by fear--the fear that the market is becoming overheated. The reasoning behind this assertion is that most of today's buying activity was heavily skewed towards income producing vehicles--bonds, closed end income funds, master-limited partnerships (MLPs), utilities, and preferred stock shares--all considered havens of (relative) safety.

From the above groups, the following exchange-traded and closed-end funds rallied to new highs today:
Build America bond funds: Nuveen Build America Bond Fund (NBB, $20.38; Yield = 6.8%) and Blackrock Build America Bond Trust (BBN, $21.85; Yield = 7.2%)
MLP Funds: Clearbridge Energy MLP Fund (CEM, $29.64; Yield = 5.5%) and Clearbridge Energy MLP Opportunity Fund (CEM, $25.17; Yield = 5.5%)
Income Funds: Pimco Income Strategy (PFL, $12.33; Yield = 8.8%), Putnam Premier Income Trust (PPT, $5.65; Yield = 5.5%), American Strategic Income Portfolio II (BSP, $8.78; Yield = 6.5%), and Nuveen Global Income Opportunity Fund (JGG, $12.77; Yield = 6.4%)
Muni Bond Funds: Eaton-Vance Muni Bond Fund II (EIV, $12.55; Yield = 6.0%)
Preferred Funds: Nuveen Quality Preferred Income Fund (JTP, $8.48; Yield = 7.3%)

Although there were no stand-out utilities-based funds, the index tracking stock, the XLU, was up nicely today. It notched a new high late last week and looks like its chart still has legs.

*A word of caution: If you're interested in moving into one of the above funds, please check to see where its current price is compared with its NAV (net asset value--you can find this number in the description of the fund on the company's website). If the fund's price is trading too far above it, you may wish to wait until it returns to more normal levels before initiating a position.

Bears take a break
June 25, 2014

1:55 pm ET: Intraday support/resistance:
SPX 1947.5/1961.5
DTX 807.25/818.25
DJIA 16800/16890
Nasdaq 4340/4380
RUT 1168.5/1181.5
VIX 11.25/12.35 (falling VIX is bullish but still is at contrarian levels)
Trin range: 0.65 - 1.0 (falling Trin is short-term bullish)
Average VWAPs: +93/-40 (bullish--for now)

Bears swat back the bulls' charge
June 24, 2014

Market Roundup: Volatility on the rebound
Boy, were my intraday support/resistance calculations off! The problem is that the true daily pivots sometimes don't show up until later in the day. As they say, you win some, you lose some.

The biggest losers today were the bulls who were doing fine--thank you very much!--until mid-day when news of a Syrian air strike in Iraq hit the wires. This was just the incentive needed for many investors and traders to book profits and begin packing for their summer vacations. There are two reasons I suspect that today's sell-off was triggered more by greed than by fear.

The first is that gold and other precious metals hardly budged. Typically, the spectre of global instability triggers a flight to safety with gold (and US treasuries) topping the list of safe havens. The second reason is that oil plunged--just the opposite reaction from what one would think considering the potential for disruption in Mid-East oil production.

The volatility index (VIX) finally sprung to life today and for those who heeded my advice to buy cheap index puts to protect against downside risk and to swap out long stock positions with call options are probably very happy they did. It's still not too late to take advantage of low volatility but the window of opportunity is closing fast, especially if the VIX keeps advancing at this rate (+10% today). And from the candlestick charts of the major averages and the VIX, it sure looks like the bulls could be in for more hurt.

Intraday Quick Note (2:20pm ET): Major averages stuck in a trading range
The intraday support/resistance levels are showing that the major averages will be stuck in a trading range for the rest of the day. A break below specified support levels, though, would be a victory for the bears. Long-term investors might want to purchase cheap put protection while the volatility is still low.

2:00 pm ET: Intraday support/resistance:
SPX 1959/1968
DTX 814.75/820.75
DJIA 16880/16970
Nasdaq 4365/4400
RUT 1181.5/1193.5
VIX 10.8/11.2 (very low VIX is bullish contrarian)
Trin range: 0.75 - 1.4 (rising Trin is bearish)
Average VWAPs: +35/-110 (bearish)

Transports starting to downshift
June 23, 2014

Market Notes: Not much to write home about today
While most of the major averages were stuck in gear, the market-leading Dow Transport Index (DTX) moved to the downside. The volatility index (VIX) made a valiant attempt to close below 11 but couldn't, confirming a slightly bearish undertone. The nearly dead-even positive and negative VWAPs is indicating that there's not a lot of conviction on either side of the fence, and complacency may be the new world order going into the summer months. Low trading volumes are indicating that the big Wall Street dogs have left for the Hampton's, although nowadays not being connected to your workplace from virtually any inhabited place in the world is no excuse for slacking off.

The number of bright spots in this market is waning but there are still a few areas investors are buying. Oil continues to move higher due to tensions in the Middle East. While many names appear to be over-bought there are a few values still to be had. The one name in this area that shined the brightest today was YPF Sociedad Anonima (NYSE: YPF, $36). This South American oil and gas producer broke out of a six month base on heavier than normal volume today. Volume in this issue has jumped in the past week, an indication of institutional buying. Technically, the stock looks good to go to at least $40 (+12% upside), an area of minor resistance. However, should oil keeping moving up, the stock could easily rally to major resistance at the $45 level (+25% upside). The company's P/E is on par with the industry's average and it does pay a small dividend currently yielding about 0.7%.

1:15 pm ET: Intraday support/resistance:
SPX 1959/1964
DTX 813.1/820.9
DJIA 16880/16955
Nasdaq 4359/4372
RUT 1182.5/1190.5
VIX 11.1/11.4 (rising Trin is bearish and very low VIX is bullish contrarian)
Trin range: 0.7 - 1.0 (neutral)
Average VWAPs: +68/-55 (bulls & bears still battling)

Take advantage of low volatility in a frothy market
June 19, 2014

Today the volatility index (VIX) hit a seven year, pre-recession low. A very low VIX is a contrarian indicator, but that doesn't necessarily mean that the market is going to reverse tomorrow. Historically, the VIX can stay low for weeks to months but at some point, it will reverse and when that happens, the market will begin moving to the downside. The biggest problem with the markets is always one of timing, and the more indications we get showing that the market is nearing a top, the better.

One indication that the market may be getting toppy is to take a look at the stocks populating the New Highs list: consumer staples (tobacco, household products, beverage makers), utilities, and commodities (look at today's jump in gold and silver). This rotation into the more defensive sectors is a sign that investors think a top is near and are repositioning their portfolios into the safer areas.

Another indication is to consider market valuations. The price/earning ratio (P/E) of the S&P 500 currently stands at 19.56. That's roughly 25% above its historical average. Now, markets can stay over-valued for a while but eventually the pendulum will swing back in the other direction. I look at hundreds of stocks a day and I'm telling you, that there are very few bargains left out there (other than highly speculative stocks such as biotechs). Nobody likes to pay more than the retail price of something, and this holds true for investors, too. When there are no more bargains to be had is when the buying pressure will dry up--and that will be the day the market begins to roll over.

The list of reasons why the market may be nearing a top is growing, and it would be wise for long-term investors to consider buying long-term put protection for their portfolios such as LEAP puts on index tracking stocks (DIA, SPY, QQQ). This low volatility environment means that options are cheap--like buying insurance at a discount. If you're looking for the real bargain in today's market, long-term put options are it.

Volatility hits seven year low
June 19, 2014

2:15 pm ET: Intraday support/resistance:
SPX 1951.5/1960
DTX 816/820
DJIA 16855/16925
Nasdaq 4333/4372
RUT 1175/1187
VIX 10.4/10.85 (bullish contrarian)
Trin range: 0.9 - 1.1 (rising Trin is bearish)
Average VWAPs: +52/-70 (bears trying to hone in)

The big yawn before the Fed rate announcement
June 18, 2014

1:20 pm ET: Intraday support/resistance:
SPX 1939.25/1945.75
DTX 806/815.5
DJIA 16755/16820
Nasdaq 4326/4342
RUT 1172/1177
VIX 11.6/11.9 (bullish)
Trin range: 0.7 - 0.9 (bullish)
Average VWAPs: +52/-52 (bulls & bears both out to lunch)

The Semis keep on truckin'
June 17, 2014

Tech stocks have been lagging the market but lately they've been playing catch-up. Regarding the major averages, the biggest movers today were the tech heavy Nasdaq (+0.4%) and the small-cap Russell 2000 (+0.8%). These indices got a big boost from internet stocks and especially the semiconductors. We've been noting how the Semiconductor etfs (SMH, SOXX) have been advancing along with the oil producers. However, the latter group has finally decided to take a break leaving the semis to do the bulls' heavy lifting. And it's really no wonder since a lot of M&A (mergers & acquisition) activity has been happening in this area and judging by the heavy trading volume, it appears as if investors are betting that the consolidation will continue.

Today, sixteen stocks hit new highs in the semiconductor space. (This is a lot.) Here are some of the more technically compelling names on that list:

Breaking out to new highs: Atmel (ATML, $9.6), Infineon (IFNNY, $12.56), MA Com (MTSI, $23), and Synaptics (SYNA, $90.3). (Actually, Synaptics broke out last week.)

Stocks in strong up-trends: Amkor (AMKR, $12.2), Spansion (CODE, $22), and Monolithic Power (MPWR, $42.4). All of the their charts appear to be over-extended and if you're looking to build a position in one of them, I'd wait for a pull-back.

My technical favorites: Rambus (RMBS, $14.6) and Sunpower (SPWR, $40.2). Sunpower has been trading sideways since October before finally breaking overhead resistance at $35 a couple of days ago. It did so on strong volume--a very bullish sign. In mid-March, Rambus broke out of an eight month base before moving on to consolidate at a higher level where it spent a month and a half digesting its gains. Last week, it popped out of this consolidation pattern and continues to notch new highs.

Bulls still trying to sidle back into the saddle
June 17, 2014

1:40 pm ET: Intraday support/resistance:
SPX 1933.5/1943.5
DTX 799/810
DJIA 16730/16830
Nasdaq 4311/4354
RUT 1163.7/1182.3
VIX 12/12.9 (falling VIX is bullish)
Trin range: 0.7 - 1.1 (neutral to bullish)
Average VWAPs: +93/-39 (bullish)

Bulls trying to sidle back into the saddle
June 16, 2014

1:45 pm ET: Intraday support/resistance:
SPX 1931/1943
DTX 800.5/806
DJIA 16720/16810
Nasdaq 4296/4328
RUT 1158/1169
VIX 12.2/12.9 (rising VIX is bearish)
Trin range: 0.75 - 1.1 (rising Trin is bearish)
Average VWAPs: +71/-45 (mildly bullish)

Bulls & bears ducking out early
June 13, 2014

Weekend Roundup: Beach Blanket Seesaw The bulls and bears both bugged out early and spent the rest of the day playing seesaw on the beach. Volume was tilted to the light side while the teeter-totter was tilted to the bulls' side. Bullish action (what's left of it) is still heavily weighted towards the oil stocks. The rally in oil continued today, helped in part by oil and gas magnate T. Boone Pickens saying in an earlier CNBC interview that a disruption in Iraqi crude production would likely raise the price of oil to the $180 - $200 per barrel range. Time to sell the Suburban!

Semiconductors are still popular but their star is starting to fade, judging by the decreasing number of semi stocks making the daily New Highs List. Also ominous is the fact that while the semi etfs--SMH & SOXX--notched higher, their candlestick charts are showing what appears to be a hanging man formation. Translated into plain English this means is that buying pressure has dried up. Unless, there's some really good news coming out from this industry group over the weekend, I would expect Monday's overall action in the semis to be to the downside.

Despite the Friday the 13th pessimism in this group, there was one bright spot. Last night in an SEC filing, Intel (INTC, +7%) said that contrary to popular belief, the PC isn't dead--at least not in the business space. Here, mobile phones and tablets are good for small jobs but businesses need desktops to get the heavy lifting done. The company sees strong demand in its business systems lineup and raised second quarter revenues by 5%. The good news boosted Intel's share price by 7% and caused a 5% gain in the stock of computer maker Hewlett-Packard (HPQ). Both stocks jumped above resistance levels on heavy volume--a very bullish sign. Based on strong technicals and still-low valuations, both Intel and HP look like excellent buys for the intermediate time horizon (1-3 years).

Have a good weekend and remember who's your daddy this Sunday!

1:25 pm ET: Intraday support/resistance:
SPX 1927.75/1939.25
DTX 798.75/806.5
DJIA 16720/16790
Nasdaq 4288.5/424.5
RUT 1154.5/1167.7
VIX 11.9/12.7 (falling VIX is bullish but VIX volatility is rapidly expanding)
Trin range: 0.6 - 0.9 (falling Trin is bullish)
Average VWAPs: +65/-41 (bull/bear seesaw)

Bears come out of hibernation on oil disruption fears
June 12, 2014

Market Notes (4:30pm ET): Anytime the spectre of political unrest arises in an OPEC country, investors flee risk (aka stocks) and put their funds into safer havens, typically oil, precious metals, and bonds--and that's exactly what happened today. Three of the more popularly traded oil exchange-traded vehicles--OIL, DBO, USO--all broke out with 2% being the average gain (that's a lot for these guys).

Gold and other precious metals have been flagging in recent months but they all reversed course about a week and a half ago (some folks must have guessed something was going to happen in the Mid-East). Today, both the Gold Miner etf (GDX) and the Junior Gold Miner etf (GDXJ) tore through resistance levels on twice the normal trading volume. Two Canadian gold miners, Detour Gold (DRGDF, $12.25) and Osisko MIning (OSKFF, $7.91), both hit new yearly highs on heavy volume. Judging from the bullish patterns in all of these charts, it sure appears as if the gold miners are in the early stages of a recovery.

Turning to the movement in the major averages, the fact that the Dow Transports (DTX) lead the way down and closed below 800 support does not bode well for the bulls. While the S&P 500 and the Dow Industrials were barely able to hang onto support, the tech-heavy Nasdaq and the small-cap Russell 2000 slipped below their support levels. Another nail in the coffin for the bulls is that for the past week the VIX has been slowly rising off of a multi-year low, and today was the first time it closed above the 12 mark. An escalation in Mid-East tensions will certainly increase market volatility--hope you bought some put protection last week when options were cheap!

2:10 pm ET: Intraday support/resistance:
SPX 1926.5/1943.5
DTX 794.5/813.5
DJIA 16700/16840
Nasdaq 4286/4328
RUT 1156.6/1165.4
VIX 11.7/12.8 (rising VIX is bearish)
Trin range: 0.7 - 1.3 (rising Trin is bearish)
Average VWAPs: +44/-104 (bearish)

Bears trying to disrupt the bull run
June 11, 2014

Market Notes: The market internals weren't lying yesterday when they suggested that a sell-off was in the cards and that's exactly the hand we got dealt. The bears roared in after the last clang of the opening bell but the bulls quickly stepped in and managed to at least contain the damage. The rise in the VIX is indicating that the bearish momentum is starting to pick up some steam. Not to throw cold water on the bulls' rally, but the VIX has been at a multi-year low for way too long and if past history is any indication of future action, I'm fully expecting the VIX to continue marching back on up, at least to the 15 level--which of course means that the market will likely move lower. Maybe it's time to sell in June and don't come back soon.

Market Movers & Shakers: Despite today's bearish action, two industry groups were on fire. Investors were piling into Semiconductors (with the SOXX & SMH etfs hitting new highs) and Oil and Gas Explorers/Producers (with both the IEO & XOP also closing at new highs). Although the oil etfs appear to want to continue their move to the upside, the rally in the semiconductor etfs is becoming overextended. If you're in either the IEO or XOP, I'd suggest booking some profit or protecting your position.

1:50 pm ET: Intraday support/resistance:
SPX 1941.5/1949.5
DTX 809.6/819.6
DJIA 16805/16945
Nasdaq 4320/4342
RUT 1165/1169
VIX 11.2/11.7 (rising VIX is bearish but under 15 is bullish)
Trin range: 0.65 - 0.8 (bullish)
Average VWAPs: +61/-48 (bull/bear battle)

Internals turning contrarian--is a market reversal imminent?
June 10, 2014

2:00 pm ET: Intraday support/resistance:
SPX 1944.5/1950.5
DTX 814.32/821.6
DJIA 16900/16950
Nasdaq 4320/4340
RUT 1166/1174
VIX 10.95/11.65 (extremely bullish but VIX falling below 11 is very contrarian)
Trin range: 0.5 - 0.7 (bullish to bullish contrarian)
Average VWAPs: +61/-44 (bulls bear-ly in control)

Are the bulls starting to tire?
June 9, 2014

Market Notes: The bears tried to crash the bulls' party today but the bulls were able to push back and all of the major averages again closed in the green--but just barely for the S&P and the Dow Transports. Signs of fatigue were also seen in the sector etfs for the semiconductors (SMH, SOXX), materials (XLB), and retail. And, although the VIX has been low, VIX volatility (as measured by the VVIX index) jumped by nearly 6% today. Could this be the first chinks in the bulls' armor?

2:20 pm ET: Intraday support/resistance:
SPX 1946.5/1955.5
DTX 818.3/825.7
DJIA 16900/16970
Nasdaq 4318/4347
RUT 1165.8/1179.8
VIX 11/11.6 (extremely bullish but VIX under 12 is contrarian)
Trin range: 0.75 - 1.1 (bullish to neutral)
Average VWAPs: +37/-87 (bears trying to wrest control)

Bulls bellow: Buy Buy Buy!
June 6, 2014

12:55 pm ET: Intraday support/resistance:
SPX 1942.5/1952.5
DTX 814.25/820.75
DJIA 16840/16930
Nasdaq 4305.75/4327.25
RUT 1158.5/1170
VIX 10.9/11.4 (extremely bullish but VIX under 12 is contrarian)
Trin range: 1.15 - 1.5 (neutral to bearish)
Average VWAPs: +63/-36 (neutral to mildly bullish; light volume)

Market internals showing market is starting to overheat
June 5, 2014

2:00 pm ET: Intraday support/resistance:
SPX 1923/1944
DTX 808/817
DJIA 16710/16800
Nasdaq 4241/4308
RUT 1128.5/1156.5
VIX 11.35/12.35 (very bullish but VIX under 12 is contrarian)
Trin range: 0.9 - 1.5 (rising Trin is bearish)
Average VWAPs: +111/-33 (very bullish)

Bulls back in charge
June 4, 2014

Mid-day Notes: The bulls charged back to push the bears out of the driver's seat--for now. However, a slowly rising VIX could be telling us that this rally may be going to the Hamptons for the summer along with the rest of Wall Street. The intraday levels are showing that there's a bit more room for upside movement so we may see another jog up before the closing bell.

1:50 pm ET: Intraday support/resistance:
SPX 1918.5/1930.5
DTX 805.8/810.2
DJIA 16675/16755
Nasdaq 4216/4264
RUT 1120/1134
VIX 11.75/12.35 (slowly rising VIX is bearish but it's still in bullish territory)
Trin range: 0.55 - 0.75 (bullish)
Average VWAPs: +90/-31 (bullish)

Bulls trying to stop the bears from stepping in
June 3, 2014

1:45 pm ET: Intraday support/resistance:
SPX 1918.75/1925.25
DTX 805.5/814.5
DJIA 16690/16740
Nasdaq 4216/4242
RUT 1118.75/1131.25
VIX 11.65/12.15 (rising VIX is bearish)
Trin range: 0.75 - 0.8 (falling Trin is bullish)
Average VWAPs: +63/-50 (bull/bear battle)

Market Notes: Investors still LUV-ing the airlines
June 2, 2014

Summary of today's action: The major averages keep marching up with the Dow Transports, the Dow Industrials, and the S&P 500 all notching new highs. The good news for the bulls is the rally is being led by the Transports; the bad news is that it's advancing on very light volume. The VIX continues to stay low but VIX volatility (yes, there is volatility on volatility) is rising. While the bulls do have good reason to cheer, there is some concern that any type of bad news could quickly move the market to the downside.

Where investors are putting their money: The areas of the market garnering the most attention are the ones that have been doing so for the past couple of months:
1. High income funds: Namely those yielding 8% and more. Check out the Eaton-Vance family of funds such as ETY, EOI, ETV, ETW, EXG--all of these are advancing to new highs.
2. REITs (Real Estate Investment Trusts): REITs have been on a roll. One of the more popular REIT funds, the Vanguard REIT etf (VNQ, $75; current yield = 3.6%), is up nearly 17% since the beginning of the year.
3. Airlines: This industry group continues to soar on relatively low P/E valuations and the expectation of robust summer travel. Hitting new highs today were Alaska (ALK), American (AAL), Delta (DAL), Hawaiian (HA), and Southwest (LUV).

Today's notable stock movers:
1. Triumph Group (TGI, $70.40): The designer and maker of components for the aerospace industry broke out of a four month base today on news that it will acquire GE's hydraulic actuation business. The $70M acquisition is expected to add ~$180M in annual revenue and to be immediately accretive to earnings.
2. Gannett (GCI, $28.9): The newspaper and TV media company popped today on a very favorable article appearing in Barron's over the weekend. The article's author maintains that the company is undervalued and sets a price target in the $34 - $40 range, depending on how management plays its cards.

Market moving up on fumes
June 2, 2014

1:45 pm ET: Intraday support/resistance:
SPX 1916/1926
DTX 807.5/815.5
DJIA 16682/16763
Nasdaq 4208/4248
RUT 1121/1139
VIX 11.6/12.2 (VIX under 12 is contrarian)
Trin range: 0.7 - 0.9 (bullish)
Average VWAPs: +67/-48 (bulls trying to hang on)

Pre-weekend jitters: Tech high-fliers getting dumped
May 30, 2014

1:40 pm ET: Intraday support/resistance:
SPX 1915/1921.5
DTX 806.6/811.4
DJIA 16650/16700
Nasdaq 4222/4252
RUT 1131.25/1141.75
VIX 11.4/11.7 (VIX under 12 is contrarian)
Trin range: 1.1 - 1.4 (bearish)
Average VWAPs: +29/-104 (bears taking control)

Investors reacting positively to the chemical makers
May 29, 2014

Finding bargains in this market is becoming more and more difficult and the few groups that are currently under accumulation are the ones that are relatively undervalued and that also pay a dividend, such as food producers and chemical makers. Today, the Materials etf (XLB) was pushed to a new high mainly by the action in the chemical stocks. (Disclosure: I'm not a personal fan of many of these companies, particularly Dow Chemical and Monsanto, but I feel that I do have a fiduciary duty to mention them.) The following chemical stocks hit new highs today and are noted along with their current price (to the nearest dollar), price-to earnings ratio (P/E), and dividend yields (D/Y): Dow Chemical (DOW, $52; P/E = 13; D/Y = 2.8%), Celanese (CE, $63; P/E = 9; D/Y = 1.6%), Du Pont (DD, $69; P/E = 22; D/Y = 2.6%), Westlake Chemical (WLK, $81; P/E = 17; D/Y = 0.6%). All of these sport bullish charts and as long as the market continues to rally, so should these.

Late-day correction: Transports *NOT* showing signs of fatigue
May 29, 2014

The mid-morning slump in the Dow Transport Index (DTX) looked like the beginning of the Sell in May scenario but a further sell-off didn't happen. In fact, buyers jumped back in and managed to push both the S&P 500 (SPX) and the DTX to all-time highs for the fifth day in a row. What's clear is that the bulls are having a big ol' party but why that's so is slightly mystifying.

Sure, the market-leading DTX continues to march higher (a good sign for rally continuation) but it's doing so on light volume--not that it's a big deal. A bigger deal, though, is the fact that the volatility index (VIX) is below 12. Historically, whenever it's fallen below this level, the market has turned around. But--and this is a big but--it does not necessarily mean that a market correction is imminent for the VIX has shown that it can stay at low levels for a while (a month or even more). What this should tell you is that it is definitely a great time to buy long-term portfolio protection such as put options on index tracking stocks (QQQ, SPY, DIA) or to begin lightening up on positions that have enjoyed big gains. The added bonus in buying options right now is that options are cheap because of the low volatility. Don't wait too long, though, because volatility can reverse on a dime.

Mid-day market action: Transports showing signs of fatigue
May 29, 2014

1:55 pm ET: Intraday support/resistance:
SPX 1909.75/1917.25
DTX 805.5/810.5
DJIA 16620/16680
Nasdaq 4229/4245
RUT 1134.25/1142.75
VIX 11.4/12 (VIX under 12 is contrarian)
Trin range: 0.75 - 0.9 (bullish)
Average VWAPs: +69/-50 (bulls still trying to stay on top)

Bulls continue to lead SPX & Transports higher
May 28, 2014

1:45 pm ET: Intraday support/resistance:
SPX 1907.25/1915.25
DTX 801/811
DJIA 16620/16690
Nasdaq 4217/4241
RUT 1133/1142
VIX 11.5/11.85 (VIX under 12 is contrarian)
Trin range: 0.75 - 0.95 (bullish)
Average VWAPs: +69/-46 (bulls trying to stay on top)

Tech/Europe on the rise
May 27, 2014

Today saw the breakout in a couple of major indices along with the breakdown in a few major commodities. On the plus side, the S&P 500 broke above 1900 to a new all-time high while the Nasdaq hurtled over 4200 resistance. Also in the plus column, some key tech sectors showed strength. In particular, Information Technology (VGT) broke out of a three month base to reach a new high while Tech (XLK) popped to another new high following Friday's breakout. This is very bullish for the tech sector.

Europe was also part of the bulls' picnic. Germany marked the day as the one where its most popular etf, EWG, broke out of a five month base to notch a new high. Also at new highs were Spain (EWP) and France (EWQ). All were in part responsible for some of the European funds to also hit new highs--most notably the VGK and EFA.

But the bulls figured into only half the picture. The bears had their day, too. In particular, agricultural commodities--most notably corn (CORN) and wheat (WEAT)--slid under support levels, both contributing to the breakdown in the Ag etf (JJA). Sure, grains ground down but precious metals also melted, especially gold (GLD, IAU) and gold miners (GDX, GDXJ) with all of them breaking through support levels. Judging by the strength of today's breakout in the 3x inverse (bearish) gold mining etf, DUST, staying away from the gold group may be a very good idea for now.

Nasdaq & S&P 500 breaking out
May 27, 2014

1:50 pm ET: Intraday support/resistance:
SPX 1902/1913
DTX 799.5/805.5
DJIA 16605/16715
Nasdaq 4205/4230
RUT 1132.5/1145.5
VIX 11.45/11.85 (VIX under 12 is contrarian)
Trin range: 0.80 - 1.1 (bullish to neutral)
Average VWAPs: +62/-54 (rotation back into high-fliers--for now)

Transports up + VIX down = Party for the Bulls
May 23, 2014

1:40 pm ET: Intraday support/resistance:
SPX 1893.3/1902.1
DTX 792.6/800.6
DJIA 16545/16625
Nasdaq 4148/4184
RUT 1115/1127
VIX 11.35/12 (VIX under 12 is contrarian)
Trin range: 0.8 - 1.15 (bullish to neutral)

Volatility hits yearly low
May 22, 2014

1:20 pm ET: Intraday support/resistance:
SPX 1885.4/1898.6
DTX 786.4/794.6
DJIA 16490/16580
Nasdaq 4131.5/4168.5
RUT 1105/1119
VIX 11.65/12.1 (VIX under 15 is bullish but VIX under 12 is contrarian)
Trin range: 0.75 - 1.15 (bullish to neutral)

Options trade: A cheap portfolio hedge
May 21, 2014

This market has been moving up on fumes. Sure, the major averages have been moving higher but on fewer and fewer stocks. Right now the few stocks that are populating the New Highs list come from the energy sector or are high dividend payers such as preferred shares issued by large investment banks (GS, DB, RBS, etc.). Bargains are almost no where to be had but, on the other hand, taking a short position while the market insists on moving higher is risky proposition.

So, what's an investor to do? Since the market is looking very frothy, putting on some portfolio protection would be a prudent move. If you're an experienced options trader, then buying puts on an index representative of your portfolio is the method preferred by many. But if you have only a few large stock holdings, then it may make more sense to buy individual puts on each, provided the options are fairly liquid. Another way is to buy calls on the volatility index, the VIX.

There are two big reasons why options on the VIX are so attractive right now. The first is that the volatility of the overall market is low, and the second is that implied volatility--a major factor in how options are priced--is also low. Today, the VIX closed under 12 which is so low it's actually contrarian, meaning that the market may be poised to fall, and soon.

An options play that is both offensive and defensive
One way that options players can take advantage of low-priced VIX options is by buying 3-6 month out calls or call spreads on the VIX itself. VIX options are highly liquid so trading at most of the strikes should be no problem. Another way to play it with the object of generating income is to buy a longer-term at-the-money call option (at a strike price of 12) and write front month (or even weekly) calls against it when the VIX spikes. The beauty of buying VIX calls is that when the market does move down, the call acts as a portfolio hedge.

Market consolidation continues
May 21, 2014

1:40 pm ET: Intraday support/resistance:
SPX 1872.5/1886
DTX 773.5/791
DJIA 16375/16565
Nasdaq 4101/4129
RUT 1094/1108
VIX 11.8/12.6 (VIX under 15 is bullish but VIX under 12 is contrarian)
Trin range: 0.6 - 0.95 (bullish)
Average VWAPs: +58/-54 (bull/bear battle)

Fickle investors parachuting out of yesterday's hi-fliers
May 20, 2014

2:10 pm ET: Intraday support/resistance:
SPX 1868/1885
DTX 778.75/790.75
DJIA 16330/16510
Nasdaq 4080/4125
RUT 1090/1112
VIX 12.3/13.3 (VIX under 15 is bullish)
Trin range: 0.7 - 1.3 (neutral)
Average VWAPs: +27/-96 (rotation out of hi-fliers continues)

Investors pull the plug on utilities
May 19, 2014

The bulls were able to expand on Friday's rally lead by the Dow Transport Index (DTX). The DTX is now retesting its previous all-time high put in last week. A close above it tomorrow would be a good sign that this rally has legs. The recent sell-off in high-flying tech names such as Tesla (TSLA), Priceline (PCLN), Netflix (NFLX), and Google (GOOG, GOOGL) appears to have come to a halt. What this means is that either investors have had a change of heart or it's a long short-covering rally. The fact that the market is moving higher on light volume (is everyone at Cannes) obfuscates the matter but I'm sure the situation will become clear soon enough.

One thing is for sure, though: Investors are flowing out of utilities. The Utility etf, XLU, has advanced over 17% since the beginning of the year but has been in a swoon since the beginning of May. Today, the stock broke support and appears to heading down with conviction. Its next level of support is about 50 cents lower at $41, and I wouldn't be surprised if it broke below that to retest major support at $38.

So, what's happening with the funds that are going out of the utes? Judging from the list of stocks with strongly positive VWAPs (a measure of buying pressure), it appears as if income-conscious investors are chucking the lower-yielding utes for the higher premiums paid by preferred stocks and high income etfs. Regarding the latter, investors are snapping up shares in several Eaton-Vance high income funds (dividend yield in parentheses): ETW (9.3%), ETV (9%), and ETY (8.8%) along with Virtus Total Return DCA (8.7%), Helios Advantage Income HAV (9%), and Pioneer High Income PHT (9%). All of these have been performing well but they are not without their own risks, so please do your own research before diving in.

Investors landing on hi-fliers
May 19, 2014

2:30 pm ET: Intraday support/resistance:
SPX 1872.5/1887.5
DTX 783/794
DJIA 16440/16550
Nasdaq 4076/4139
RUT 1099.5/1116.5
VIX 12/13.2 (VIX under 15 is bullish)
Trin range: 0.8 - 1.35 (neutral)
Average VWAPs: +67/-44 (bulls still trying to elbow their way in)

Major averages trying to hang on
May 16, 2014

2:10 pm ET: Intraday support/resistance:
SPX 1864.75/1873.25
DTX 777.5/784
DJIA 16410/16465
Nasdaq 4044.25/4075.75
RUT 1088.5/1097
VIX 12.75/13.65 (VIX under 15 is bullish)
Trin range: 0.95 - 1.3 (falling Trin over yesterday is bullish & is now in the neutral zone)
Average VWAPs: +60/-45 (bulls trying to gain a foothold)

Trin turning contrarian could put bulls back in charge--for now
May 15, 2014

Market Notes: Are 'da bears giving up already? We noted here yesterday that a relatively low Trin provided the bears with more downside legroom but today's spike to 1.85--a contrarian level--stopped the slide in the major averages. Intraday pivots indicate that market action will remain rangebound for the rest of the trading day, although the market-leading Dow Transport Index (DTX) shows that it does have a little more room left on the downside.

Just how bearish is today's action? All sector etfs on my list are trading in the red. Breaking key support levels are the banks: KRE, KBE, IAT, and the Oil/gas drillers/services: PXJ, OIH. Should any of you bears fancy shorting them, I'd wait for a continuation in the downward direction before jumping in. A market takeover by the bulls could cause them to reverse course and nobody wants to be left holding the bag, especially on the short side.

One of the few bright spots in the market today are preferred stocks which have been out-performing lately. Preferred stock etfs have been rallying steadily since January. Some of the more popular preferred etfs are the following: PFF ($39, Yield=6.5%), PGX ($14, Yield=6.2%), PGF ($18, Yield=6.1%), PSK ($43, Yield=7%). The PFF is by far the most heavily traded of the group (1.7M average daily volume) and offers the most robust options field. (Note that they all offer options except for PSK.) For more info on preferred stock funds, Seeking Alpha contributor, David Fry, wrote an excellent article on the above-mentioned funds.

2:15 pm ET: Intraday support/resistance:
SPX 1862/1888
DTX 769.75/783.25
DJIA 16397/16623
Nasdaq 4035.75/4098.25
RUT 1082.5/1099.5
VIX 12.75/13.85 (rising VIX is bearish, but under 15 is bullish)
Trin range: 1.0 - 1.85 (bearish to bearish contrarian)
Average VWAPs: +81/-52 (bull/bear struggle)

Bears trying to take over but bulls are putting up a fight
May 14, 2014

Market Notes: Is today the start of Sell in May ? The mighty Dow Transports couldn't continue traveling in fourth gear and downshifted today leading the rest of the market in the downhill direction. But whether today's move is a minor bump in the road remains to be seen. On the bullish side, the VIX continues to vex the bears by refusing to budge from its newly established level near 12. However, bears may view this as a sign in their favor because the VIX hasn't been able to remain at this contrarian level for long. Supporting the bearish case is the steadily rising Trin. It crossed over to the bear side today with a lot more room for upside movement. On top of that, the Dow Industrials are heading back to test support at 16600 and the Dow Transports are close to testing 780 support. A break beneath those levels could easily send them back to retest major support at 16400 and 760, respectively.

Technical Trade Note: Downward trending stocks: Those of you who like to swing trade based on technicals may wish to take a look at the charts of these mostly over-valued tech stocks--Priceline (PCLN), Amazon (AMZN), Pandora (P)--plus the small-cap Russell 2000 (RUT) index. These all have been caught in downward trending channels since early March.

1:50 pm ET: Intraday support/resistance:
SPX 1890.5/1997.25
DTX 783/790
DJIA 16635/16720
Nasdaq 4112/4132
RUT 1110/1120
VIX 11.95/12.5 (VIX under 12 is extremely contrarian)
Trin range: 0.8 - 1.1 (rising Trin is bearish)
Average VWAPs: +62/-56 (bulls and bears squaring off)

Bears trying to step in
May 13, 2014

1:40 pm ET: Intraday support/resistance:
SPX 1895.75/1902.25
DTX 786.5/792
DJIA 16695/16740
Nasdaq 4128/4158
RUT 1121.75/1133.75
VIX 11.75/12.75 (VIX under 12 is extremely contrarian)
Trin range: 0.55 - 0.85 (bullish to bullish contrarian)
Average VWAPs: +41/-80 (mildly bearish)

Rolling the dice: Market going up or down?
May 12, 2014

Just when you think the VIX can't sink any lower, it does. The VIX is now sitting squarely in contrarian land meaning that the chance of the market reversing direction is quite likely. BUT--and this is a big but--the market-leading Dow Transport Index (DTX) decisively broke through major overhead resistance today to hit a new all-time high. This is an extremely bullish technical event. On the one hand we have an extremely bearish sign (low VIX) and on the other hand we have an extremely bullish sign (high DTX), so what's an investor to do?

I still think that buying a bit of portfolio protection wouldn't be a bad thing. On the other hand, I wouldn't want folks to miss out on another potential leg up in this rally. So, if you're itching to take on some long positions, I would follow the crowd. The so-called smart money is rotating out of utilities and into consumer staples including food products (Kellogg's (K), Pilgrim's Pride (PPC)) and tobacco ((Imperial (ITYBY), Reynolds (RAI)), automotive retailers (Asbury Automotive (ABG), Sonic Automotive (SAH)), and airlines (Alaska (ALK), Delta (DAL), Southwest (LUV)). All of the above mentioned stocks broke out to new highs today and many of them sport P/E's lower than the market average. (The current P/E of the S&P 500 is 19.)

VIX turning contrarian
May 12, 2014

1:50 pm ET: Intraday support/resistance:
SPX 1880/1895
DTX 772.25/786.75
DJIA 16585/16700
Nasdaq 4092/4138
RUT 1111.75/1134.25
VIX 11.9/12.6 (VIX under 12 is extremely contrarian)
Trin range: 0.55 - 0.8 (bullish to bullish contrarian)
Average VWAPs: +82/-45 (moderately bullish)

Up or down? Market trying to make up its mind
May 9, 2014

2:10 pm ET: Intraday support/resistance:
SPX 1867/1879
DTX 765.5/773.5
DJIA 16500/16590
Nasdaq 4025.25/4069.75
RUT 1091.5/1105.5
VIX 12.95/14.05 (VIX under 15 is bullish but under 13 is contrarian)
Trin range: 0.9 - 1.5 (rising Trin is bearish)
Average VWAPs: +93/-41 (bullish)

Market is up but selling pressure is intensifying
May 8, 2014

1:45 pm ET: Intraday support/resistance:
SPX 1874.5/1891.5
DTX 768.75/778.25
DJIA 16505/16635
Nasdaq 4045/4110
RUT 1104/1120
VIX 12.9/13.8 (VIX under 15 is bullish but under 13 is contrarian)
Trin range: 0.7 - 0.9 (falling Trin is bullish)
Average VWAPs: +32/-121 (bearish)

Days of Tesla past?
May 7, 2014

The rotation out of high-flying tech and tech-related stocks continued today with social media and natural foods stocks suffering as investors continued to pour money into defensive sectors. Oil and gas producers, real-estate investment trusts (REITs), utilities (both domestic and foreign), and food product manufacturers (not grocers) were the beneficiaries of the outflow from social media, software providers, health food grocers, and retail stocks.

It appears as if the honeymoon is over for two recent high-fliers. The first is Whole Foods Market (WFM) who reported sluggish sales yesterday citing increasing competition. I mean, seriously, what was the barrier to entry on this one? Did anyone really believe that they were the only ones who could stock their shelves and produce bins with organic foods? Apparently so because having shopped there a few times, I was amazed at the premiums they were asking for the exact same merchandise that was offered elsewhere for a lot less. Investors finally came to their senses following yesterday's lackluster earning report and punished the stock by exiting in droves causing a 19% drop in price--ouch! It closed today under its two year low at $40 and could be on its way to test support at $35.

The other bloom off the rose stock is electric automaker Tesla (TSLA). The company reported earnings after today's closing bell and although they did beat street expectations by two cents (12 cents vs 10 cents), investors apparently were expecting more. The stock sold off nearly 8% in the after-hours market and is now sitting on major support at $185. A break below that and we could see a fall to its next support level at $160 or possibly even major support at $120. A drop to that level wouldn't surprise me considering the competition it's already getting from two new BMW models--the urban commuter plug-in electric car, the ie3, and a super-sexy (and expensive!) hybrid sports model, the i8. Plus, who knows what other automakers have hidden up their production sleeves? Like someone pulling the plug on the Tesla coil, the spark in Tesla's stock may have also fizzled out.

Rotation out of high-fliers continues
May 7, 2014

2:05 pm ET: Intraday support/resistance:
SPX 1859.75/1878.25
DTX 762/770
DJIA 16385/16545
Nasdaq 4019/4091
RUT 1093.25/1112.75
VIX 13.2/14.55 (VIX under 15 is bullish but rising VIX is bearish)
Trin range: 1.05 - 1.35 (neutral to mildly bearish)
Average VWAPs: +64/-108 (bearish but bulls are still present)

Bears gain momentum...but do they have staying power?
May 6, 2014

Intraday Notes (2:30pm ET): Lately, the slogan for the market has been: If it's Tuesday, the market rallies. But as they also say, All good things must come to an end ...or must they? in preparing the intraday support/resistance levels, it became apparent that the major averages had further room to drop (and most of them proceeded to quickly blow past my support levels). However, there was one index that refused to follow the pack, and that was the Dow Transports (DTX), a recognized leader in predicting market direction. The index did drop after I posted the levels (shown below) but it couldn't manage to break support at 764. Of course, the trading day isn't over with yet and yes, there's still a chance that it might retest that level again. But...a rally in that index manage could set the stage for a turnaround in the other major averages. I don't think this market's rollercoaster ride is over with just yet--whee!

1:35 pm ET: Intraday support/resistance:
SPX 1871.25/1883.75
DTX 764/771
DJIA 16390/16530
Nasdaq 4102.5/4132.5
RUT 1115/1124
VIX 13.15/13.75 (VIX under 15 is bullish)
Trin range: 0.85 - 1.25 (neutral to mildly bearish)
Average VWAPs: +32/-98 (bearish)

Bulls fight back
May 5, 2014

1:45 pm ET: Intraday support/resistance:
SPX 1867/1888
DTX 761.5/771.5
DJIA 16375/16545
Nasdaq 4087/4147
RUT 1115/1131
VIX 13/14.2 (VIX under 15 is bullish)
Trin range: 0.9 - 1.2 (neutral)
Average VWAPs: +76/-40 (mildly bullish)

Bears trying to take control
May 2, 2014

Intraday Notes (2:15pm ET): Is this week's rally over with already? Yesterday, the internals were moving into contrarian territory and today the VIX slid under 13. The last time this happened was a month ago. The VIX dipped briefly under 13 before rebounding in the other direction. Tensions in the Ukraine was the main reason cited for this rise in the fear gauge. And guess what? It seems as if history is about to repeat itself and if I were a trader, I sure wouldn't want to be long over this weekend. I'd be booking profits, taking an early lunch , and whetting my whistle for those Kentucky Derby mint juleps. Placing a bet on the horses may actually be a better risk play than being long the market (especially the high-flying tech names) this weekend.

1:50 pm ET: Intraday support/resistance:
SPX 1879/1891.5
DTX 769.25/777.25
DJIA 16500/16620
Nasdaq 4115/4130
RUT 1126.25/1137.25
VIX 12.85/13.65 (VIX under 13 is contrarian)
Trin range: 0.8 - 1.3 (rising Trin is bearish)
Average VWAPs: +54/-86 (bears trying to take control but bulls aren't going down without a fight)

Three day rally losing steam as internals grow contrarian
May 1, 2014

2:05 pm ET: Intraday support/resistance:
SPX 1878/1889
DTX 767.5/777
DJIA 16560/16610
Nasdaq 4105.5/4149.5
RUT 1114.25/1134.25
VIX 13.1/13.75 (VIX under 15 is bullish; falling VIX is bullish but starting to become contrarian)
Trin range: 0.5 - 1.0 (bullish to bullish contrarian)
Average VWAPs: +65/-91 (bulls & bears duking it out)

Pop in the Dow Transports adds fuel to this week's rally
April 30, 2014

1:45 pm ET: Intraday support/resistance:
SPX 1872.75/1882.25
DTX 762.5/767
DJIA 16510/16585
Nasdaq 4070/4118
RUT 1109/1120
VIX 13.25/14.2 (VIX under 15 is bullish)
Trin range: 0.8 - 1.1 (neutral)
Average VWAPs: +77/-58 (bull/bear tug of war)

Bulls fight back halting tech sell-off
April 29, 2014

2:10 pm ET: Intraday support/resistance:
SPX 1870.75/1883.25
DTX 756.75/763.75
DJIA 16450/16580
Nasdaq 4070/4120
RUT 1118.5/1127.5
VIX 13.35/14.25 (falling VIX is bullish and under 15 is bullish)
Trin range: 0.7 - 1.2 (falling Trin is bullish)
Average VWAPs: +122/-48 (bullish)

Investors adding staples to their stables
April 28, 2014

The sector rotation that has been on-going for the past couple of months continued today as investors continued to shed internet and software, banks, telecom, gaming, and homebuilder stocks while favoring the safety of consumer staples (more on this below) and oil & gas producers/refiners/MLPs. The VIX made a brief run above 15--the bull/bear dividing line--before nose-diving straight back down to close below its opening value. Midday, the major averages were testing major support levels, but they managed to close above them--at least for one more day. Midday values for the negative VWAPs (see support/resistance levels below) were at bearish contrarian levels (-200 and below are extremely bearish values) so it isn't terribly surprising that the market rebounded when it did.

This wild roller-coaster action that we've been experiencing for the past couple of weeks could go on for a while but I doubt it. The fact that the midday rally for the market leading Dow Transports was muted (compared with the those for the other major averages) indicates that today's rally may be a head-fake. An escalation of Russian military action in the Ukraine would likely trigger a market sell-off along with a possible disruption of oil and gas supplies to Europe which would likely further the rally in this part of the energy sector.

Consumer staples becoming a staple of investors
Investors pushed the Consumer Staples etf (XLP, $44.29) to a new all-time high (since late 1998 inception) fueled mostly by gains in beverage makers, tobacco, and home products. And what's not to like? This is a defensive sector that can withstand times of political and economic instability. Although it's been under accumulation, it's still not over-priced compared with other sectors. As a bonus, most consumer staple stocks do pay dividends. Breaking out to new highs today were the following staple stocks (along with closing price, price to earnings ratio (P/E), and the current dividend yield (D/Y): Dr Pepper/Snapple (DPS, $55; P/E 16.6; D/Y 3%), Pepsico (PEP, $87; P/E 19.4; D/Y 2.6%), Anheuser-Busch (BUD, $110; P/E 12.4; D/Y 2.1%), Altria (MO, $40; P/E 18; D/Y 4.8%), British American Tobacco (BTI, $117; P/E 17; D/Y 4%), and Colgate-Palmolive (CL, $68; P/E 29; D/Y 2.1%). Not hitting new highs but breaking above overhead resistance levels were Proctor & Gamble (PG, $83; P/E 21; D/Y 3.1%) and British bottler SabMiller (SBMRY, $54; P/E 26; D/Y 1.8%). Except for BTI, all of these issues traded on heavier than normal volume with SabMiller trading on more than five times its average.

Bears seizing control
April 28, 2014

2:05 pm ET: Intraday support/resistance:
SPX 1851/1877
DTX 750.5/764.5
DJIA 16310/16500
Nasdaq 4003/4111
RUT 1102/1131.5
VIX 13.95/15.5 (VIX rising over 15 is bearish)
Trin range: 1.25 - 1.75 (very bearish to bearish contrarian)
Average VWAPs: +14/-210 (extremely bearish)

Sell in May?
April 25, 2014

Lately, investors have been steadily moving out of high-flying tech stocks into the safety of long-term government bonds, solid consumer staples and discretionary stocks (tobacky had a good day today), but the money flow has been directed mostly into utilities. Today, that flight to safety was more like a stampede as a vast number of so-called momentum tech stocks--think internet and software--got pummeled with a huge number of them breaking under major support levels. Major names breaking down were Amazon (AMZN), Overstock.com (OKST), Pandora (P), LinkedIn (LNKD), and Yelp (Y).

Investors have been booking profits in these names since the beginning of March which was the time when both the tech-heavy Nasdaq and the small-cap Russell 2000 began trending down. It was right about this time that the utility stocks got their second wind and began their next big move higher. It appears that investors decided the tech space was getting a bit frothy and began transferring their winnings into the safety of utilities--a space that offers safety as well as better yields than bonds. (Most utes pay dividends yielding between 2% to 4%.) Today, sixteen utility companies broke out to new highs carrying the Utility etf, the XLU, along with them. Buying pressure in these issues is still strong indicating that further price appreciation is in the offing but buying interest could begin to wane should valuations creep up much higher as most companies are now fairly valued.

Looking forward, market technicals are leaning in favor of the bears. The Dow Transport Index (DTX), a recognized leader in market direction, today broke below support at 760. It could easily drop to 740, an area of strong support. As mentioned above, the Nasdaq and the Russell 2000 (RUT), have both been trending lower. The next support level for the Nazzie is at 4000 (currently at 4075) and 1100 for the RUT (currently at 1123). The VIX, however, has been unusually low. It's still hanging below 15 but that may not last too much longer. There's a lot more room for it to move to the upside than the downside--something the bulls don't want to hear. In short, you may want to prepare your portfolio for the Sell in May and go away scenario as the likelihood of this event playing out this year is increasing.

Market leading Dow Transports under pressure
April 25, 2014

1:45 pm ET: Intraday support/resistance:
SPX 1860.25/1877.75
DTX 756.5/771.5
DJIA 16295/16505
Nasdaq 4063/4127
RUT 1091/1139
VIX 13.9/14.9 (VIX under 15 is bullish but rising VIX is bearish)
Trin range: 1.2 - 1.7 (very bearish to bearish contrarian)
Average VWAPs: +50/-92 (bearish)

Bulls and bears duking it out
April 24, 2014

1:55 pm ET: Intraday support/resistance:
SPX 1870.25/1887.75
DTX 766.5/776.5
DJIA 16450/16560
Nasdaq 4107.5/4187.5
RUT 1136.5/1155.5
VIX 13.1/14.1 (VIX under 15 is bullish)
Trin range: 0.7 - 1.1 (neutral)
Average VWAPs: +71/-71 (bull/bear battle)

Betting on the bettors
April 23, 2014

Today's action in the major averages reflected the rotation out of recent tech (think newer internet companies) and biotech darlings along with other areas that have enjoyed a long run-up such as real estate and consumer discretionary (especially restaurants and casinos) and into the more staid industries such as regional banks, oil and gas producers and suppliers, gold miners, and insurance (see below for more info). Even Treasuries and muni bonds got a lift. It's worth noting that muni bonds have been making a steady comeback since December following last year's late spring sell-off.

Betting on reinsurers
Investors have already filled their dance cards with regular insurance companies, but now they're starting to take notice of of the wallflowers in this group--the reinsurers. Reinsurance companies provide insurance to insurance companies. Essentially, they are a form of risk management for the insurance company. One way reinsurers can make money is via arbitrage, either through economies of scale or tax advantages. It is because of the latter that most reinsurance companies are located off-shore. By purchasing bonds, such as investment grade corporates, they are able to take advantage of their tax-free situation.

Several reinsurers have popped up on my radar screen. They all pay dividends, albeit small ones (yields less than 2%), but it's their charts and P/E ratios that are their most attractive features. They all deserve a look:

Everest Re (RE, $161): P/E 6.3, Yield 1.9%. The stock broke out of a 5 month base today on heavier than normal volume.
Renaissance Re (RNR, $102): P/E 6.8, Yield 1.1%. The stock broke through overhead resistance on 4/8. It broke short-term resistance today.
Montpelier Re (MRH, $31): P/E 8.7, Yield 1.6%. The stock went into the green on St. Pat's day (3/17). It spent a few weeks consolidating until the bulls finally got the upper hand it began powering higher.

From a technician's point of view, all of these look like winners.

Hi-fliers losing altitude
April 23, 2014

1:45 pm ET: Intraday support/resistance:
SPX 1874/1881
DTX 771.75/779.25
DJIA 16475/16525
Nasdaq 4123.5/4161.5
RUT 1148/1156
VIX 13.15/13.75 (bullish to bullish contrarian)
Trin range: 0.9 - 1.3 (neutral)
Average VWAPs: +50/-87 (mildly bearish; rotation out of hi-fliers into golden oldies)

Dow Transports hit record high as bulls cheer
April 22, 2014

2:50 pm ET: Intraday support/resistance:
SPX 1872.5/1887.5
DTX 768.75/777.25
DJIA 16450/16580
Nasdaq 4131.5/4175.5
RUT 1143.25/1162.75
VIX 12.75/13.25 (bullish to bullish contrarian)
Trin range: 0.77 - 1.0 (bullish)
Average VWAPs: +104/-52 (bullish, but the bears aren't out of the picture)

Bulls looking to extend last week's rally
April 21, 2014

Intraday Notes (1:40pm ET): The market is looking to extend last week's gains with momentum still rolling in the oil and gas service providers and producers. The Oil Services etf, OIH, is up 1% already on the day. Finally getting a bit of love are the biotechs which have been taking a hit over the past couple of months. Moving to the upside are the biotech etfs IBB, FBT, and BBH.

On the flip side, the gold miners continue to sell-off. Both the major Gold Miner etf, GDX, and the Junior Gold Miner etf, GDXJ, both broke to the downside--not a good sign for the gold bugs going forward. In the internet space, online realty service provider Zillow (Z) rallied over 9% today breaking through overhead resistance on heavier than normal volume, possibly due to a favorable article in this weekend's edition of Barron's.

1:30 pm ET: Intraday support/resistance:
SPX 1863/1874
DTX 761.5/768
DJIA 16400/16470
Nasdaq 4082/4126
RUT 1132.25/1145.25
VIX 13/14.1 (VIX under 15 is bullish)
Trin range: 0.7 - 1.0 (bullish)
Average VWAPs: +83/-40 (moderately bullish)

Bulls gain traction going into the holiday weekend
April 17, 2014

1:45 pm ET: Intraday support/resistance:
SPX 1857/1868
DTX 756/764
DJIA 16370/16450
Nasdaq 4065/4120
RUT 1127/1141
VIX 13.1/14.2 (falling VIX is bullish & VIX under 15 is bullish)
Trin range: 0.7 - 1.3 (falling Trin intraday is short-term bullish)
Average VWAPs: +105/-50 (bullish)

Bulls powering higher
April 16, 2014

1:45 pm ET: Intraday support/resistance:
SPX 1846/1860
DTX 746.5/759
DJIA 163265/16445
Nasdaq 4030/4080
RUT 1121/1131
VIX 14.1/15.3 (falling VIX is bullish & VIX under 15 is bullish)
Trin range: 0.8 - 1.3 (falling Trin intraday is short-term bullish)
Average VWAPs: +67/-56 (bulls trying to gain control but bears still growling)

Bulls trying to regain control
April 15, 2014

Intraday Notes (2:30pm ET): The bulls extended yesterday's closing rally into today's open but their exuberance was quickly quashed when the bears came charging back en masse. With a little more than an hour and a half going into the close, the bulls are trying to regain their footing but today's action may not turn out to be a repeat of yesterday's. The intraday pivot points are indicating that further movement to the downside is possible. However, today's rapid rise in the Trin (Arm's Index) to 1.8 at 1pm ET is a very bearish contrarian sign indicating a market reversal. The market did just that but the question now is how much steam is left in the bull charge. Methinks not enough...

2:00 pm ET: Intraday support/resistance:
SPX 1814.25/1843.75
DTX 732.5/748.5
DJIA 16025/16275
Nasdaq 3940/4055
RUT 1092.25/1123.75
VIX 15.5/17.5 (VIX over 15 is bearish)
Trin range: 0.8 - 1.8 (bearish to bearish contrarian)
Average VWAPs: +93/-48 (bulls trying to regain control but bears very much in the picture)

Bears pushing back the bulls' advance
April 14, 2014

2:30 pm ET: Intraday support/resistance:
SPX 1818/1834
DTX 737/745
DJIA 16030/16190
Nasdaq 4009/4051
RUT 1115.7/1126.3
VIX 16.05/17.35 (VIX over 15 is bearish)
Trin range: 0.65 - 1.0 (neutral)
Average VWAPs: +39/-148 (very bearish)

Major averages testing major support levels
April 11, 2014

2:00 pm ET: Intraday support/resistance:
SPX 1817/1835
DTX 736.75/745.25
DJIA 16010/16170
Nasdaq 4008/4067
RUT 1115/1129
VIX 15.9/17.1 (rising VIX is bearish & VIX over 15 is bearish)
Trin range: 0.65 - 1.35 (rising Trin is bearish)
Average VWAPs: +42/-120 (bearish)

Major averages appear to have put in an intraday low
April 10, 2014

Intraday Notes (2:20pm ET): Yesterday's rally (as noted here) was indeed even more short-lived than I even expected. Heck, the bears didn't even give the bulls an extra day to party as pretty much all sectors moved down from the get-go. However, the slide may be over--at least for today--as evidence by the contrarian nature occurring in the market internals at 1:20pm ET. At that time, the Trin spiked to 1.6, the Tick hit a low of -1150, and the negative VWAPs were inordinately high (in absolute value terms) ranging in the -200 to -300 range. All of these are contrarian indications that the sellers have run out of steam. The turnaround in the major averages is likely due in part to short sellers booking profits, and for this reason it would be foolish for the bulls to think that the bears have gone away.

1:45 pm ET: Intraday support/resistance:
SPX 1840/1872.5
DTX 744.6/759.4
DJIA 16220/16455
Nasdaq 4058/4183
RUT 1127/1160
VIX 13.8/15.8 (rising VIX is bearish & VIX over 15 is bearish)
Trin range: 0.6 - 1.6 (rising Trin is bearish but 1.6 is contrarian)
Average VWAPs: +19/-235 (bearish contrarian)

FOMC minutes pushing market higher mid-day
April 9, 2014

Intraday Notes (2:45pm ET): Dovish tones from the minutes of Janet Yellen's first Fed meeting sparked a move in the major averages even above the resistance levels (as calculated from this morning's inflection points). This is just the fuel the bulls were looking for, but the question is whether today's move is the start of another rally or just the pause that refreshes before the bears move back in. Today's dramatic drop in the VIX to under 14 doesn't leave a whole lot of room for the bulls to work with. Yes, the VIX can stay at low levels for a while but today's pop in the precious metals indicates that the risk-off trade (aka, the move back into stocks) may be short lived.

2:00 pm ET: Intraday support/resistance:
SPX 1852.5/1863.5
DTX 747/757
DJIA 16255/16375
Nasdaq 4121/4163
RUT 1145/1155
VIX 14.05/14.95 (falling VIX is bullish & VIX under 15 is bullish)
Trin range: 0.9 - 1.15 (neutral)
Average VWAPs: +99/-38 (bullish)

Market consolidating ahead of earnings season kickoff
April 8, 2014

2:20 pm ET: Intraday support/resistance:
SPX 1837.5/1856.5
DTX 742/749
DJIA 16180/16310
Nasdaq 4066/4134
RUT 1131/1151
VIX 14.8/16.2 (VIX over 15 is bearish)
Trin range: 0.8 - 1.3 (neutral to bearish)
Average VWAPs: +90/-60 (bulls have the edge--for now)

Investors fleeing high-fliers
April 7, 2014

The market sell-off continues as investors continue to exit recent high-fliers. Small-caps and tech stocks have been especially hard hit as shown by the break down in the Russell 2000 (RUT) and the Nasdaq, both of which have fallen below their 100 day moving averages (dma) as well as major support levels (1150 for the RUT and 4100 for the Nasdaq). The other major averages are faring a bit better but they're still on shaky ground. The 1850 level couldn't contain the S&P 500 (SPX) and it appears that it's on track to test minor support (as well as its 50 dma) at 1840. The Dow Transport Index (DTX) was able to hang onto minor support at 745, but if that doesn't hold (and the technicals are indicating that it won't), it could easily sink to its 50 dma at 740. The VIX popped over 15 putting the bears firmly in the driver's seat. Considering the strength of today's move along with the technical breakdown in the Russell and the Nasdaq, it appears as if the bears will be able to stay in control for at least a little while. A VIX move over the 20 mark, though, could signal that the end of the bears' reign. Here are some key support levels to watch:

SPX: 1840, 1825 (also its 100 dma)
DTX: 740 (50 dma), 700
DJIA: 16200, 16000
Nasdaq: 4000
RUT: 1100 (200 dma)

1:05 pm ET: Intraday support/resistance:
SPX 1840/1864
DTX 741/748
DJIA 16200/16420
Nasdaq 4046/4137
RUT 1127.5/1150.5
VIX 14.6/16.3 (VIX rising over 15 is bearish)
Trin range: 0.6 - 1.4 (rising Trin is bearish)
Average VWAPs: +25/-202 (extremely bearish)

Non-farm payrolls fail to excite investors
April 4, 2014

12:10 pm ET: Intraday support/resistance:
SPX 1876/1897.25
DTX 756/771
DJIA 16500/16630
Nasdaq 4125/4267
RUT 1160.75/1187.25
VIX 12.6/14.4 (rising VIX is bearish but VIX under 15 is bullish overall)
Trin range: 0.7 - 1.1 (neutral)
Average VWAPs: +19/-264 (this is the most bearish reading I've seen in a long while)

Bears taking a bite out of new-tech stocks
April 3, 2014

1:40 pm ET: Intraday support/resistance:
SPX 1884/1894
DTX 765/771.5
DJIA 16535/16605
Nasdaq 4225/4285
RUT 1179.5/1194
VIX 13/13.55 (VIX under 15 is bullish)
Trin range: 0.8 - 1.1 (neutral)
Average VWAPs: +46/-111 (bears taking a bite out of recent hi-fliers)

Bears pushing back
April 2, 2014

1:25 pm ET: Intraday support/resistance:
SPX 1883.75/1892.25
DTX 764.5/772.5
DJIA 16505/16575
Nasdaq 4261/4286
RUT 1187.5/1192.5
VIX 12.85/13.35 (falling VIX is bullish)
Trin range: 0.55 - 0.85 (bullish to bullish contrarian)
Average VWAPs: +48/-96 (bears trying to push the bulls back)

Autos & semis keep on truckin'
April 1, 2014


The S&P 500 and the market leading Dow Transport Index (DTX) were both finally able to break out of a month long consolidation range to hit new all-time highs. The Dow Industrial Index (DJIA) is retesting its all-time high put in a couple of months ago while the tech heavy Nasdaq and small-cap driven Russell 2000 (RUT) both sharply rebounded from a recent sell-off. The question now is how much steam do the bulls have to propel the move higher?

Looking at the VIX may provide us with a clue. The volatility index, a measure of fear and uncertainty, dropped nearly 6% today showing that investors are becoming more confident. Although the VIX closed just above 13--a very low value by historical measures--it still has a ways to go before contrarians become concerned. In the past year or so, the VIX has shown that it can stay at very low levels (in the 12-14 range) for a month or so before rebounding. If history is planning on repeating itself, we may not see the market sell off for at least another month, just in time for the Sell in May and go away scenario to kick in. Let's keep our fingers crossed that today's pop wasn't just an April Fool's joke by the bears wearing bull horns.

Today's hot stocks: Autos & semis deliver the goods
Two industry groups in particular were on fire today--the auto makers and auto part makers and the semiconductors. One would think that with GM's CEO Mary Barra getting grilled by Congress today would cause the auto stocks to crash and burn (like some GM cars), but it seemed to have the opposite effect. In fact many motored to new highs: Tower (TOWR, $29), Autoliv (ALV, $102), Delphi (DLPH, $70), Lear (LEA, $87), Superior (SUP, $21), Magna (MGA, $99), Thor (THO, $64), Tata Motors (TTM, $36), Fiat (FIATY, $12). Most of these have P/Es in the 15 - 25 range with Fiat and Tata being the lowest (11 & 14 respectively), and most pay a dividend with Superior and Autoliv having the highest yields at 3.5% and 2.1%. Technically, all of the above charts are compelling but I especially like Fiat's as it today pistoned out of a three year base--a very bullish indication.

The semiconductor etfs, SOXX and SMH, have been rallying juggernauts and today they both broke out of recent consolidation to hit new highs, gaining roughly 1.5% on the day. Helping these etfs along were some individual names, each popping at least 3% to new highs themselves: Tower Semi (TSEM, $10), Rambus (RMBS, $11), Lattice Semi (LSCC, $8), Micrel (MCRL, $12), Spansion (CODE, $18), Amkor (AMKR, $7), NXP Semi (NXPI, $61), Linear Tech (LLTC, $50), Freescale Semi (FSL, $25). Many of these names have been moving up for a while and still don't show signs of slowing down. Note that the rally in the semis helped the Tech etf (XLK) move past current resistance to yet another new high--just the fuel the market needs to continue moving up.

Major averages trying to break out
April 1, 2014

2:05 pm ET: Intraday support/resistance:
SPX 1874/1885
DTX 756.75/761.75
DJIA 16457/16572
Nasdaq 4220/4265
RUT 1174.75/1185.25
VIX 13.2/13.6 (falling VIX is bullish)
Trin range: 0.6 - 0.9 (bullish to neutral)
Average VWAPs: +79/-66 (bulls in control but bears are not going away)

Old is the new New
March 31, 2014

The bulls charged back today amid a lot of end-of-quarter rotation and portfolio window dressing. Possibly fearing that a market correction is in the offing, fund managers have been aggressively dumping current hi-fliers concentrated mostly in the new tech and the biotech areas. High P/E names such as Netflix (NFLX, P/E = 180), Linkedin (LNKD, P/E = 770), and Amazon (AMZN, P/E = 560) have suffered massive outflows in favor of boring industry groups such as food producers, transportation, old media (hey, the New York Times (NYT) broke out to a new high today!), old tech (we'll get to those in a moment), and utilities.

Speaking of utes, the Utilities etf (XLU) popped to a new high today hitting a level not seen since before the 2008 recession. And why not? With reasonable P/Es and decent dividends, they won't face much competition as sources for reliable income until bond rates go up. And from what Janet Yellen said today, she's not anticipating on hiking rates soon. Here's a list of utes hitting new highs today in order of decreasing dividend yield (%): AVA ($30.65, 4%), PEG ($38.14, 3.9%), VVC ($39.39, 3.7%), LNT ($56.81, 3.6%), DTE ($74.29, 3.5%), NWE ($47.43, 3.4%), WEC ($46.55, 3.4%), EIX ($56.61, 2.5%), ITC ($37.35, 1.5%). Technically, Wisconsin Electric (WEC) sports the most compelling chart, but because I'm a Cheesehead I may be a slightly biased in my opinion. The XLU is also a good choice and pays a nice dividend, too (3.6%).

Food and beverage producers also had a good day. Breaking out new highs recently: Diamond Foods (DMND, $34.93), Constellation Brands (STZ, $84.97), Pilgrim's Pride (PPC, $20.92), Tyson Foods (TSN, $44.01), Hormel (HRL, $49.27), Cal-Maine Foods (CALM, $62.78), Pinnacle Foods (PF, $29.86). Of these, Constellation (STZ) is my choice--it sports the best chart and has a reasonable P/E of 8.5 (but it does not pay a dividend as some of the others do).

Old-guard tech names such as Microsoft (MSFT) and Oracle (ORCL) have been on the come-back trail in recent months. Today, Mr. Softee broke out of a fourteen year base on slightly heavier than normal volume. Apparently, investors as well as Wall Street analysts are liking the changing of the guard in senior management along with a refocusing of company efforts on cloud computing and mobile strategies. Oracle, too, blew through recent resistance on 3x volume to hit a level also not seen since 2000. Compared with the tech stocks mentioned above, the P/E's of these two stocks are more down-to-earth--15 for MSFT and 17 for ORCL. I rate both of these stocks as Buys and if I had to pick just one, it would be Microsoft for its more bullish chart and for its higher paying dividend--2.7% compared with 1.2% for Oracle. And if a market correction is in the cards, both of these stocks should be able to weather it well.

Bulls trying to stage a comeback but will the bears let them?
March 31, 2014

1:35 pm ET: Intraday support/resistance:
SPX 1859/1876
DTX 746/759
DJIA 16325/16500
Nasdaq 4160/4215
RUT 1155/1178.5
VIX 13.65/14.25 (falling VIX is bullish)
Trin range: 0.8 - 1.1 (bullish to neutral)
Average VWAPs: +95/-68 (bulls in control but bears are growling)

Major averages hanging on for dear life
March 28, 2014

1:45 pm ET: Intraday support/resistance:
SPX 1850/1867
DTX 741.2/751.8
DJIA 16265/16425
Nasdaq 4156.5/4203.5
RUT 1150.5/1161.5
VIX 13.75/14.75 (rising VIX is bearish but is still on bullish side of the 15 fence)
Trin range: 0.65 - 1.1 (bullish to neutral)
Average VWAPs: +58/-99 (bears trying to wrest control from the bulls)

Bears charge in
March 26, 2014

1:45 pm ET: Intraday support/resistance:
SPX 1858/1876
DTX 744.75/758.75
DJIA 16275/16465
Nasdaq 4197/4263
RUT 1161/1185
VIX 13.45/14.95 (rising VIX is bearish but is still on bullish side of the 15 fence)
Trin range: 0.9 - 1.6 (rising Trin is bearish)
Average VWAPs: +24/-219 (extremely bearish)

The big yawn

















March 25, 2014

Market Notes: The major averages have been rangebound since the beginning of the month. The 60 minute chart of the S&P 500 above exemplifies this action. While this lack of market action may be putting some to sleep, it doesn't mean that nothing isn't happening. Market internals are showing a rotation out of the recent high flying groups (think biotech and hot stocks such as Tesla that have enjoyed a massive run-up) and into those that have been beaten down. Emerging markets such as the BRICs (which have been in the toilet) are seeing some inflows and appear to be turning around. The real point of this sideways market action will be when the major averages finally break out of it. Whichever way they finally decide to move--be it up or down--a continuation in that direction is indicated. Here are the key support and resistance levels to be aware of for some of the major averages:

Dow Transports (DTX): 745/762
S&P 500 (SPX): 1840/1880
Dow Industrials (DJIA): 16050/16500
Russell 2000 (RUT): 1170/1210

The only major average that has not been trading sideways is the tech-heavy Nasdaq. Instead, this index has been trending down, likely for the reason given above.

1:55 pm ET: Intraday support/resistance:
SPX 1856/1872
DTX 751.6/759.6
DJIA 16280/16420
Nasdaq 4200/4274
RUT 1171/1191
VIX 13.95/15.15 (VIX still sitting on the bull/bear fence)
Trin range: 0.9 - 1.2 (neutral)
Average VWAPs: +57/-82 (bull/bear seesaw)

Major averages trying to hold support
March 24, 2014

Intraday Notes (2:30pm ET): The major averages are testing support levels while the VIX is straddling the bull/bear fence at 15. Who's destined to win this sparring match today? Market internals are showing that selling pressure is increasing while buying pressure is decreasing. Chalk one up for the bears. Also, the intraday pivot points on the major averages indicate that there's more room to run to the downside. So, despite the current rise off the intraday lows, we could see this mid-day rally run out of steam as the bears step up the selling going into the close.

1:55 pm ET: Intraday support/resistance:
SPX 1847/1873
DTX 743/756
DJIA 16200/16380
Nasdaq 4186/4290
RUT 1167/1197
VIX 14.55/16.25 (VIX sitting on the bull/bear fence)
Trin range: 0.8 - 1.35 (neutral)
Average VWAPs: +59/-92 (bulls and bears duking it out with the bears currently having the upper hand)

Bears staging a comeback
March 21, 2014

1:40 pm ET: Intraday support/resistance:
SPX 1871/1884
DTX 751/759
DJIA 16325/16455
Nasdaq 4272/4344
RUT 1198/1208
VIX 13.75/14.75 (VIX under 15 is bullish but let's see if it can close under it)
Trin range: 1.0 - 1.4 (rising Trin is bearish)
Average VWAPs: +45/-143 (very bearish)

Semis, banks, brokers achieve lift-off

March 20, 2014

Despite the fact that the major averages were unable to break through recent resistance, several areas were on fire: banks (especially the smaller regionals), financial institutions (brokers in particular), and the semiconductors. The group-wide breakout action was reflected in the industry etfs. The Regional Bank etfs, KRE & IAT, gained the most with a 2% rise to hit new yearly highs. Next in line were the Semiconductor etfs, SMH & SOXX, followed closely by the Financial etf, XLF. (Note that all of these etfs pay a dividend currently yielding in the 1% to 1.5% range.) Most economists feel that it isn't a true rally without leadership in financials which, up until now, has been lacking. Today's breakout should be welcomed by the bulls as good news. (Note: On the flip side, the Transports have been lagging and selling pressure has been heavy--two signs that the road to rally may be filled with potholes.)

I've been saying for a year that the regional banks have looked attractive and many of them still do. Culling through the plethora (26) of break-outs in this group today, the following are my picks based purely on technicals as well as P/E. (I looked at those with P/E's under 15 which is the historical average value of the S&P 500.)

1. Fifth Third Bancorp: FITB: Closing price = $23.36, P/E = 11.4, Dividend Yield = 2.05%
2. PNC Financial: PNC: Closing price = $86.63, P/E = 11.6, Dividend Yield = 2.03%
3. Wells Fargo: WFC: Closing price = $49.03, P/E = 12.4, Dividend Yield = 2.45%
4. Huntington Bancshares: HBAN: Closing price = $10.01, P/E = 13.7, Dividend Yield = 2.00%
5. Regions Financial: RF: Closing price = $11.30, P/E = 14.3, Dividend Yield = 1.06%
6. Wintrust Financial: WTFC: Closing price = $49.62, P/E = 14.9, Dividend Yield = 0.81%

If any of these pique your interest, remember to research them for yourself before jumping on board.

Bulls have the edge but for how long?
March 20, 2014

1:50 pm ET: Intraday support/resistance:
SPX 1854.5/1876.5
DTX 748/757
DJIA 16160/16380
Nasdaq 4287.5/4337.5
RUT 1190/1204
VIX 14.4/15.6 (VIX under 15 is bullish)
Trin range: 0.5 - 0.75 (falling Trin is bullish but it's getting into the contrarian zone)
Average VWAPs: +82/-60 (bulls have the upper hand but bears still in the mix)

The Fed rocks the boat
March 19, 2014

2:20 pm ET: Intraday support/resistance:
SPX 1862/1874
DTX 754.5/761
DJIA 16245/16365
Nasdaq 4313/4336
RUT 1197.5/1205.5
VIX 13.9/16 (falling VIX is bullish and under 15 is bullish)
Trin range: 0.6 - 0.85 (falling Trin is bullish)
Average VWAPs: +60/-86 (bull/bear battle)

Will today be the day the Transports close above 760?
March 18, 2014

Intraday Notes & Trade Idea (1:30pm ET): The bulls are stepping in as Russian fears fade. And while we're on the topic of Russia, some of today's biggest gainers are Russian-based exchange traded funds: RSX ($23, +4%), small-cap oriented RSXJ ($30, +4%), and triple-levered Russian bull fund RUSL ($15, +12%). CNBC reported that before the 2008 crash, the Russian stock market actually out-performed the US stock market. During the global mortgage crisis, the Russian market tanked as did virtually every other market. Despite the fact that it did stage a recovery, it wasn't able to hang in there like the US market, likely due to the fact that they had no central bank propping them up. These funds have sold off sharply since 2011 and could be poised for a big comeback, but it's a gamble. Those who can handle risk may wish to start nibbling at these them (or individual stocks). If so, I'd recommend either using options (if available) to minimize investment risk.

1:15 pm ET: Intraday support/resistance:
SPX 1859/1873
DTX 754.3/762.3
DJIA 16245/16395
Nasdaq 4284/4343
RUT 1189.25/1205.25
VIX 13.9/15.5 (falling VIX is bullish but needs to stay under 15 for bulls to stay in control)
Trin range: 0.85 - 1.25 (neutral)
Average VWAPs: +70/-44 (mildly bullish)

Bulls step in but bears are fighting back
March 17, 2014

1:25 pm ET: Intraday support/resistance:
SPX 1843/1863
DTX 748/758
DJIA 16065/16275
Nasdaq 4269/4301
RUT 1183.75/1196.25
VIX 15.4/16.4 (falling VIX is bullish but it's still over 15 which is bearish)
Trin range: 0.8 - 1.15 (neutral)
Average VWAPs: +54/-57 (bull/bear battle)

Bulls fight back
March 14, 2014

2:00 pm ET: Intraday support/resistance:
SPX 1840/1854.75
DTX 745.25/754.75
DJIA 16060/164180
Nasdaq 4242/4278
RUT 1173.25/1188.75
VIX 16.1/17.5 (rising VIX is bearish & over 15 is bearish)
Trin range: 0.75 - 1.4 (bearish)
Average VWAPs: +77/-59 (bulls trying to take control but bears still in the picture)

Bears take control over Crimean concerns

March 13, 2014

Market Notes: Despite yesterday's brief attempt to stabilize, the escalation of tension in the Crimea combined with continuing worries over the slowdown in the Chinese economy (hey, stop letting your millionaires escape and fix your pollution problem!) both served to put more pressure on the market. The VIX--a measure of investor fear and uncertainty--jumped over the bull/bear dividing line of 15. Market internals reflected this fear by showing that investors were fleeing the high-flyers for the safety of precious metals, treasuries, and utilities.

Some of today's most interesting action was in the precious metals market which saw a breakout in the gold miners (GDX) and junior gold miners (GDXJ). One gold etf, the IAU, broke out of a base today with its bigger counterpart, the GLD, not far behind. The junior gold miners in particular have been rallying off their December lows. The GDXJ, a basket of junior gold miners, has gained over 50% since then and more upside looks to be in the offing. The next level of resistance for this exchange traded fund is at $50, roughly 11% over today's close. There are options on this stock but they're not nearly as heavily traded as are those on the GDX, the major gold miners. This stock even offers weekly options for those so inclined to trade them. The GDX also broke resistance today and appears to be heading towards its next area of major resistance at $31 which is 12% above today's close.

Spec trades for tomorrow: An escalation of tension in the Crimea could send the VIX a lot higher--and Russian stocks and Russian-based funds plunging. Those with strong stomachs and money to burn could buy levered VIX funds such as TVIX and UVXY and/or the triple levered bear Russian fund (the bear Bear fund?), RUSS, on tomorrow's open with the intention of exiting the trade before the closing bell.

2:00 pm ET: Intraday support/resistance:
SPX 1845.5/1874.5
DTX 745.5/762.5
DJIA 16115/16405
Nasdaq 4250/4340
RUT 1172/1196
VIX 14.25/16.35 (rising VIX is bearish & over 15 is bearish)
Trin range: 0.7 - 1.4 (rising Trin is bearish)
Average VWAPs: +40/-161 (bearish)

Bulls fighting back
March 12, 2014

Midday market watch (2:30pm ET): The intraday support/resistance levels are showing that there's a lot more room for movement to the upside. The disparity between the large positive VWAPs and small negative VWAPs is showing that buyers are stepping in at these levels. The VIX began the day in bear country but has since fallen back into the bulls' camp. If the major averages can manage to close in the green, this may signal the end of the bears' brief reign and the start of yet another leg up in the rally.

2:05 pm ET: Intraday support/resistance:
SPX 1854/1872
DTX 751/761
DJIA 16260/16385
Nasdaq 4270/4340
RUT 1177.5/1193.5
VIX 14.25/15.65 (falling VIX intraday is bullish but rising over yesterday is bearish)
Trin range: 0.7 - 1.2 (neutral)
Average VWAPs: +117/-38 (bullish)

Bears trying to take control
March 11, 2014

The bears have been stealthily gaining strength and their numbers continue to grow. If the VIX can move just a bit over 15--the bull/bear dividing line--the bears will be able to slide into the driver's seat. However, their time behind the wheel may be short-lived as the transports are still rolling along. Sure, the Dow Transport Index is having a tough time closing over 760 but the good news is that it's not selling off as are the other major indices. If a correction does come, it could likely be short and swift.

1:35 pm ET: Intraday support/resistance:
SPX 1868/1882
DTX 754.75/762.25
DJIA 16340/16460
Nasdaq 4311/4354
RUT 1190.75/1204.25
VIX 13.85/14.75 (falling VIX is bullish)
Trin range: 0.5 - 1.05 (neutral to contrarian)
Average VWAPs: +34/-106 (bearish)

Are the bulls running out of steam?
March 10, 2014

1:50 pm ET: Intraday support/resistance:
SPX 1867/1879
DTX 752.5/762.5
DJIA 16305/16455
Nasdaq 4307/4330
RUT 1192.75/1202.25
VIX 14.1/15.3 (rising VIX is bearish)
Trin range: 0.8 - 1.05 (neutral)
Average VWAPs: +57/-64 (bull/bear battle)

Bears trying to take control
March 7, 2014

2:00 pm ET: Intraday support/resistance:
SPX 1870.5/1884.5
DTX 755.5/763
DJIA 16405/16505
Nasdaq 4317/4371
RUT 1198.5/1210.5
VIX 13.5/14.55 (VIX under 15 is bullish but it is rising)
Trin range: 0.9 - 1.2 (neutral)
Average VWAPs: +50/-107 (bearish)

Bears applying pressure on the market
March 6, 2014

1:40 pm ET: Intraday support/resistance:
SPX 1874/1882.5
DTX 749/755
DJIA 16360/16450
Nasdaq 4344/4372
RUT 1203.75/1208.75
VIX 13.7/14.3 (VIX under 15 is bullish but it is rising off intraday low)
Trin range: 0.8 - 1.0 (Trin rising over yesterday is bearish but in neutral territory)
Average VWAPs: +53/-126 (bears trying to rain on the bulls' parade)

The market digesting Fat Tuesday's gains
March 5, 2014

1:30 pm ET: Intraday support/resistance:
SPX 1871/1877
DTX 745.5/752.5
DJIA 16345/16405
Nasdaq 4344/4366
RUT 1203.5/1207.5
VIX 13.8/14.35 (VIX under 15 is bullish)
Trin range: 0.45 - 0.85 (Trin rising from contrarian level is bearish)
Average VWAPs: +76/-74 (bulls and bears duking it out)

The market bulks up on Fat Tuesday
March 4, 2014

Midday market watch (2:25pm ET): It sure didn't take long for the market to shrug off the Ukraine/Russia conflict. Shares of anything having to do with Russia rebounded after yesterday's sharp sell-off. The Russia etf RSX gained 3.6% today over yesterday's multi-year low while its small-cap heavy brother, RSXJ, is up 3%. Of course, the triple levered Russia etf, RUSL, has jumped nearly 10% while individual Russian stocks that trade on US exchanges as ADRs, Sber Bank (SBRCY) and Lukoil (LUKOY), are up 4%. If you had been brave enough to jump into any of these issues yesterday you'd be fat and happy today, which is appropriate seeing as how today is Mardi Gras.

2:10 pm ET: Intraday support/resistance:
SPX 1849.25/1875.75
DTX 731/750
DJIA 16170/16410
Nasdaq 4327/4362
RUT 1187/1221
VIX 13.85/14.55 (falling VIX is bullish)
Trin range: 0.7 - 1.1 (falling Trin over yesterday is bullish (!))
Average VWAPs: +84/-61 (bullish but bears still in the picture)

Is the bad news already priced in?
March 3, 2014

Midday market watch (1:50pm ET): Considering the escalation in tensions between Russia and the Ukraine, I'm amazed that the market isn't a lot lower. In fact, the major averages seem to have already bottomed. Market internals are showing that the bulls have regained control and heigtened VWAPs on the plus side indicate that people are taking advantage of the temporary discounts. However, this ebullient rebound could be just temporary phenomenon especially if the Russian situation takes a turn for the worse. If heightened volatility has you reaching for the Pepto Bismol bottle, waiting it out on the sidelines may be the best place for you right now.

1:15 pm ET: Intraday support/resistance:
SPX 1828.25/1857.75
DTX 723/734
DJIA 16020/16320
Nasdaq 4240/4280
RUT 1165/1175
VIX 15.4/16.9 (rising VIX is bearish)
Trin range: 0.9 - 1.25 (falling Trin over Friday is bullish (!))
Average VWAPs: +91/-50 (bullish)

Can the bulls hold on?
February 28, 2014

2:20 pm ET: Intraday support/resistance:
SPX 1854/1868
DTX 729.75/739.25
DJIA 16260/16400
Nasdaq 4317.5/4342.5
RUT 1189/1193.5
VIX 13.25/14.25 (VIX under 15 is bullish)
Trin range: 1.2 - 1.75 (rising Trin over yesterday is bearish)
Average VWAPs: +65/-167 (bearish)

Will today be the day the S&P closes above 1850?
February 27, 2014

Yes, today was the day that both the S&P 500 and the Russell 2000 were finally able to clear overhead resistance and move to all-time highs. The Nasdaq, too, moved to its highest value since the dot-com bubble. While both the Dow Transports and Dow Industrials are off their recent highs, the good news is that they both rallied nicely. For this new leg up in the rally to continue, we'll need to see the Transports stay above the 700 support level.

Sector action was green across the board with tech (XLK) and materials (XLB) hitting new highs. Both the internet (PNQI) and information technology (VGT) spaces have been going gangbusters and they continue to reach new heights. These two areas (along with biotech) are the waves of the future but getting into them right now after such a long run-up may be not the best idea. If you're bent on doing so, nibbling at them (or even dollar cost averaging into them) may be the prudent way to enter into a long position. May the bull run continue!

2:20 pm ET: Intraday support/resistance:
SPX 1841/1857
DTX 725.5/732.5
DJIA 16160/16300
Nasdaq 4285/4328
RUT 1176.5/1185.5
VIX 13.9/14.7 (VIX under 15 is bullish)
Trin range: 0.6 - 0.9 (falling Trin over yesterday is bullish)
Average VWAPs: +87/-51 (bulls still have the edge)

Bears trying to prevent bulls from pushing higher
February 26, 2014

Market Notes (2:45pm ET): The market pattern for five out of the past six trading days has been a rally off the opening bell followed by a steep sell-off from the mid-day high. Although the bulls still have the upper hand, their advancement has been labored. Both the S&P 500 (SPX) and the small-cap Russell 2000 (RUT) have been desperately trying to hit new all-time highs but as soon as they advance into new territory the bears push back. Intraday levels have been showing room to run to the upside but this expected advancement has been met with increasing selling pressure as reflected by the rising Trin and increasing strength in the negative VWAPs (an indication of institutional selling). Whether this trading scenario continues is unclear, but what is clear is that today's decline in the market-leading Dow Transport Index (DTX) is telling us that the bears may be sidling their way into the driver's seat. Tomorrow could be a pivotal day in the market.

1:55 pm ET: Intraday support/resistance:
SPX 1842.75/1854.25
DTX 723.5/736
DJIA 16160/16260
Nasdaq 4288/4325
RUT 1174/1191
VIX 13.4/14.5 (VIX under 15 is bullish)
Trin range: 1.0 - 1.4 (rising Trin over yesterday is bearish)
Average VWAPs: +98/-61 (bulls with the upper hand but bears still very much in the picture)

Bears trying to tilt the seesaw in their favor
February 25, 2014

2:10 pm ET: Intraday support/resistance:
SPX 1840/1854
DTX 727/735
DJIA 16150/16270
Nasdaq 4276/4311
RUT 1171/1180
VIX 13.75/14.8 (VIX under 15 is bullish)
Trin range: 0.8 - 1.1 (rising Trin over yesterday is reflecting an increase in selling pressure)
Average VWAPs: +66/-65 (bull/bear battle)

Bulls pushed the S&P 500 to an all-time high...
February 24, 2014

...but the bears came charging back forcing the index back under 1850. The index has been testing this level since the end of December and so far it hasn't been able to close above it. The market-leading Dow Transport Index (DTX) pierced through overhead resistance at 740 before reversing course midmorning. Its retreat was almost as swift as its ascent. The fact that the DTX lead the other indices in the decline is not a good sign for a bullish continuation tomorrow.

What's been interesting as of late is the fact that the intraday support/resistance levels have been, for the most part, signaling more room to move to the upside (on an intraday basis). Lately, however, the market has been doing just the opposite and I'm wondering why. For one, I could be calculating the pivot points incorrectly but today's pivots were so cut and dried that anyone could have seen them. What I'm left with is a feeling that there really is a battle going on between the bulls and the bears. VWAPs on both the positive (i.e., buying) and the negative (i.e., selling) sides have been elevated. This could be due to a couple of things: 1. sector rotation (that is, the selling of stocks in one sector and the buying of stocks in another), or 2. the reflection of a bifurcation in investor sentiment (aka a bull/bear struggle). My suspicion is that it's a bit of both.

The bears have a good case against further advancement. The market has been overvalued for quite a while. Consider that today the P/E ratio of the S&P 500 is roughly 30% above its historical average (19.58 vs 15). Also consider that inflation is rising (commodities across the board are becoming more expensive, mortgage rates are rising) while unemployment and wages stagnate. Corporations have been boosting their earnings mostly by artificial means--slashing jobs, freezing salaries (except at the very top) and buying back their own stock--while revenues have barely risen. This is a situation that can't last forever and when the manipulation of not only the balance sheets of companies but of the Federal government is no longer feasible, then all heck is going to break loose. These are the main reasons why the bulls haven't been able to shoo the bears away.

But it's not as if the bears should be looking to party hardy. Oh, no. They might have some fun for a while but Mr. Ranger will be putting a stop to any extended picnic. Technically, long-term charts (monthly, quarterly, yearly) of the major averages indicate that the market is currently in a consolidation phase and that the future direction is up. Not just a little bit up, but an up-up-and-away type of up. The time frame we're looking at here is not just years but decades.

So what's the moral of the story? Pretty much the same as it's always been--the bears win the sprint but the bulls win the marathon. Place your bets accordingly.

2:10 pm ET: Intraday support/resistance:
SPX 1837/1867
DTX 731/745
DJIA 16100/16380
Nasdaq 4272/4333
RUT 1167/1185
VIX 13.75/14.85 (falling VIX is bullish)
Trin range: 0.75 - 0.95 (falling Trin is bullish)
Average VWAPs: +85/-56 (bulls have the upper edge but bears are still hanging in there)

Bulls heading out early for the weekend
February 21, 2014

1:40 pm ET: Intraday support/resistance:
SPX 1839.25/1846.75 (rangebound for rest of the day)
DTX 725.25/735.75 (slightly more upside possible)
DJIA 16115/16195 (rangebound for rest of the day)
Nasdaq 4272.75/4284.75 (rangebound for rest of the day)
RUT 1165/1168.5 (rangebound for rest of the day)
VIX 14.2/14.8 (VIX rising off intraday low indicates buying pressure drying up)
Trin range: 0.95 - 1.3 (jump in Trin over yesterday is bearish)
Average VWAPs: +66/-65 (bull/bear battle)

Bulls back in charge
February 20, 2014

2:50 pm ET: Intraday support/resistance:
SPX 1824.5/1845.5 (more upside possible)
DTX 713.75/729.25 (more upside possible)
DJIA 16005/16215 (a lot more upside possible)
Nasdaq 4227/4275 (more upside possible)
RUT 1148.5/1163.5 (more upside possible)
VIX 14.4/15.8 (VIX falling back below 15 is bullish)
Trin range: 0.65 - 1.3 (steadily falling Trin from opening high is bullish)
Average VWAPs: +119/-48 (bulls back in charge but bears not going away)

Fed minutes sending market on a rollercoaster ride
February 19, 2014

2:10 pm ET: Intraday support/resistance:
SPX 1834/1848 (more upside possible)
DTX 719/724 (rangebound for rest of the day)
DJIA 16050/16250 (more upside possible)
Nasdaq 4246/4279 (more upside possible)
RUT 1155/1165 (more upside possible)
VIX 14.15/15.25 (rising VIX is bearish longer term but is falling intraday which is bullish)
Trin range: 0.75 - 1.25 (falling Trin is bullish)
Average VWAPs: +66/-66 (bulls and bears duking it out)

Out with the old, in with the new
February 18, 2014

Summary of today's market action
Market action today was bifurcated with the small-cap Russell 2000 (RUT) and the tech-heavy Nasdaq gaining on the day while the Dow Industrials--aka the old guard index--lost ground. The VWAPs were elevated on both the positive and negative sides indicating rotation. The proof of this rotation pushed the Nasdaq to a new post-tech bubble high and pushed the Russell back above 1150 resistance. The big downer on the day was the negative action in the Dow Transports (DTX). Bears were in control of this index right from the opening bell and they quickly pushed it down 1.4%. But selling pressure dried up after about thirty minutes giving the bulls a chance to step in. They managed to keep the index afloat for the rest of the day. Let's hope they can continue to do so as the DTX needs to stay above the 720 level for today's rally to have legs.

Highlights: Java jolts, silver soars, commodities climb, healthcare & biotechs go viral, tech ticks up
A drought in Brazil has been a big factor in the recent rise in coffee prices so it's not clear (at least to me) why the Coffee etf (JO, $30.59) jumped by a whopping 9% today. The fund broke out of a two week consolidation pattern on heavy volume and appears to be heck-bent on testing major resistance at $32. As this represents only a 4% gain over today's closing price, I wouldn't be surprised if it tested this level in the next day or so.

The Silver etf (SLV, $21.13) has been lurching upward for the past two trading sessions. This is good news for precious metal bugs but it's still too early to tell if the rally will continue. The SLV has been unable to break above the $24 level since last April. If it manages to do so, that would signal a shift to an accumulation mentality in precious metals.

Alternative & clean energies are back in the green. Many exchange-traded funds in this space broke out to new highs: Solar (TAN), Clean energies & technologies (QCLN,PBD, PZD). Every day it seems as if there are announcements about new solar and/or wind farms being built. Another exciting clean energy source could be harnessing the power of ocean waves. In fact, Lockheed-Martin (LMT) recently announced that will play a major part of the world's largest wave energy project to be built off the coast of Australia. It will be using technology developed by a micro-cap company called Ocean Power Technologies (OPTT). (If you're thinking of jumping on this bandwagon please note that OPTT's stock price as doubled since the announcement last week.) Anyway, the rally in nearly all commodities has pushed one Commodity fund (DBC) out of the doldrums and through $26 resistance. It looks like clear sailing at least until its next resistance levels at $26.50 and $27.

Healthcare and biotechs continue to push higher. The rally in healthcare and biotech is almost becoming monotonous unless, of course, you're heavily invested in this area. ETFs in this area pushing to new highs today are Big Pharma (PJP), Healthcare (XLV, IXJ), Medical Devices (IHI), and Biotechs (IBB, BBH, FBT).

Technology also rose, especially in the areas of computer gaming and information technology (IT). Continuing to hit new highs are the IT etf (VGT) and the Internet etf (PNQI).

And the sector rotation beat goes on...

Intraday levels sending mixes messages
February 18, 2014

1:30 pm ET: Intraday support/resistance:
SPX 1835/1845 (further upside possible)
DTX 720/731 (could go a bit lower)
DJIA 16110/16180 (a lot more upside possible)
Nasdaq 4243.5/4285.5 (a lot more upside possible)
RUT 1151/1164.5 (more upside possible)
VIX 13.6/14.5 (rising VIX is bearish)
Trin range: 1.1 - 1.4 (rising Trin is bearish)
Average VWAPs: +84/-60 (bulls barely hanging on)

The bulls get the love on Valentine's Day
February 14, 2014

1:55 pm ET: Intraday support/resistance:
SPX 1825.5/1840.5 (further upside possible)
DTX 727/733 (could close the day slightly above intraday high)
DJIA 15985/16195 (further upside possible)
Nasdaq 4226/4248 (a bit more upside possible)
RUT 1143.7/1149.3 (a bit more downside possible)
VIX 13.25/14.25 (falling VIX is bullish)
Trin range: 0.7 - 0.95 (falling Trin is bullish)
Average VWAPs: +86/-56 (bulls in control but bears are waiting to pounce on weakness)

Bulls charge back
February 13, 2014

2:05 pm ET: Intraday support/resistance:
SPX 1809.25/1833.75 (further upside possible)
DTX 720.25/730.75 (further upside possible)
DJIA 15865/16085 (further upside possible)
Nasdaq 4170.5/4256.5 (further upside possible)
RUT 1124.5/1149.5 (further downside possible)
VIX 13.65/15.25 (VIX testing 14)
Trin range: 1.05 - 1.35 (rising Trin growing bearish)
Average VWAPs: +154/-37 (very bullish)

Market sending mixed messages
February 12, 2014

Intraday Market Notes (2:10 pm ET): The major averages seem to be dancing to their own internal rhythms today. On the bullish side, we've got the market-leading Dow Transport Index (DTX) in rallying off its earlier low while the action in other averages remains tepid. Today's calculated intraday levels suggest that the Dow Industrials (DJIA) and the small-cap Russell 2000 Index (RUT) could move below their intraday lows before the market closes. The fact that the VIX has been unable to drop below 14 for the past two days indicates that investors haven't become complacent as yet and heightened VWAPs on both the positive and negative sides means that neither sellers nor buyers have moved to the sidelines. Today's close could be quite volatile.

1:50 pm ET: Intraday support/resistance:
SPX 1816/1827 (rangebound)
DTX 723/727.5 (rangebound)
DJIA 15915/16035 (further downside possible)
Nasdaq 4190/4213 (rangebound)
RUT 1127.5/1137.5 (further downside possible)
VIX 14/14.8 (VIX unable to fall beneath 14)
Trin range: 0.85 - 1.2 (rising Trin over yesterday's value is bearish)
Average VWAPs: +69/-72 (bull/bear battle)

Intraday levels indicate further room to rally
February 11, 2014

1:40 pm ET: Intraday support/resistance:
SPX 1800.5/1821.5
DTX 716.5/726
DJIA 15800/16040
Nasdaq 4153/4197
RUT 1118/1134
VIX 14.2/15.3 (VIX jumping over to the bull side of 15)
Trin range: 0.65 - 0.9 (falling Trin is bullish)
Average VWAPs: +123/-38 (very bullish)

Gold begins to shine as natural gas cools off
February 10, 2014

Today's Leaders & Losers
The gold miners ($GDX, $GDXJ, $NUGT--triple levered gold miner bull fund) all broke resistance levels today. They've been on a stealth rally since December gaining roughly 20%, 40%, and 75% respectively. I think these have room to run to their next resistance levels: $GDX to $27 (+9.3%), $GDXJ to $45 (+12.5%), and $NUGT to $50 (+19%). One real estate etf, $DRN, broke $43 resistance last Friday and is up another 3% today. It's now testing $45 and break through that could propel it to its previous high of $48.75.

One of today's biggest commodity losers is natural gas. Two nat gas etfs, $UNG and $GAZ, both shed over 4% today. They've enjoyed a meteoric rise in the past two weeks due to the cold spell covering much of the country and it appears that investors are quickly booking profits on the expectation of an increase in temperatures.

Intraday Market Notes (2:40pm ET): The major averages are showing divergence with a downward movement in the Transport index (DTX) and upward movement in the other major averages. There's also a divergence between the VIX, which is moving lower, and the Trin, which is moving higher. This bull/bear struggle is reflected in the elevated VWAPs on both sides indicating possible sector rotation. So where will the market be heading in the next day or so? Well, the downward movement in the DTX--widely considered the leader in market direction--suggests a reversal to the downside. However, a falling VIX could trump that so for right now, it's anyone's guess.

1:35 pm ET: Intraday support/resistance:
SPX 1792/1800
DTX 713.5/723.5
DJIA 15735/15805
Nasdaq 4123/4147
RUT 1109/1118
VIX 15.15/15.75 (VIX still on the bear side of 15)
Trin range: 0.75 - 1.05 (neutral)
Average VWAPs: +77/-51 (bull/bear tug of war)

February 7, 2014

2:00 pm ET: Intraday support/resistance:
SPX 1776/1794
DTX 718.5/726.5
DJIA 15625/15795
Nasdaq 4070/4125
RUT 1105/1116
VIX 14.9/16.3 (falling VIX is bullish)
Trin range: 0.65 - 1.05 (bullish)
Average VWAPs: +140/-46 (very bullish)

February 6, 2014

Intraday Market Notes (2:25pm ET): Intraday levels are showing there's a lot more room for an upside move--who would've thunk? I'm skeptical whether the major averages will actually close near the calculated highs but if recent market action is any indication, anything is possible. Should this happen, don't think that a bull charge will push the bears back into hibernation--far from it! The high negative VWAPs are indicating that the bears are still hanging out (with perhaps some sector rotation going on, too) so any rally could be very short-lived.

2:00 pm ET: Intraday support/resistance:
SPX 1753/1777
DTX 707.5/722.5
DJIA 15445/15655
Nasdaq 4022/4076
RUT 1096/1110
VIX 17.4/19.1 (falling VIX is bullish)
Trin range: 0.65 - 1.1 (Trin has been falling from the open which is short-term bullish)
Average VWAPs: +86/-80 (bull/bear battle)

February 5, 2014

1:50 pm ET: Intraday support/resistance:
SPX 1738/1758
DTX 701/712
DJIA 15340/15510
Nasdaq 3968/4042
RUT 1083/1103
VIX 18.7/20.7 (falling VIX is bullish)
Trin range: 0.7 - 1.3 (neutral)
Average VWAPs: +141/-41 (very bullish but bears still grousing around)

February 4, 2014

Intraday Market Notes (2:25pm ET): Yesterday we noted that the internals were flashing Contrarian and today we got the indicated reversal. Intraday pivot points (if I'm reading them correctly) are showing the major averages have a lot more room to run to the upside. Whether we actually get close to those top levels remains to be seen but right now the bears seem to be gaining some traction. Right now the market is up for grabs and today's action near the close could be very telling. A big sword hanging over the investing environment is Friday's jobs report. A bad number could lend credence to the recent economic numbers pointing to a slowing in the economy and if that proves to be the case, we may be in for another sell-off. The best place for conservative long-term investors right now is on the sidelines (or hedged).

1:45 pm ET: Intraday support/resistance:
SPX 1744/1765
DTX 703/717
DJIA 15365/15535
Nasdaq 4005/4053
RUT 1094.5/1113.5
VIX 17.85/20.05 (falling VIX is bullish)
Trin range: 0.55 - 0.9 (falling Trin is bullish)
Average VWAPs: +101/-47 (bullish but bears hanging in)

February 3, 2014

Intraday Market Notes (2:50pm ET): Quick update. Support/resistance levels are indicating that the major averages have more downside available but the market internals are all so bearish that they've become contrarian. Sure, we still could see more downside going into the close but I wouldn't be surprised if selling pressure hasn't already dried up thereby opening up some space for the bulls to run. In light of this very real rally possibility, I would suggest that the bears stay on their toes and be ready to cover their short positions when the market begins to reverse.

2:40 pm ET: Intraday support/resistance:
SPX 1740/1785
DTX 703.5/732.5
DJIA 15360/15710
Nasdaq 3977/4114
RUT 1089/1131
VIX 18.35/21.45 (VIX becoming contrarian)
Trin range: 1.0 - 2.0 (bearish contrarian)
Average VWAPs: +27/-211 (extremely bearish to contrarian)

January 30, 2014

2:00 pm ET: Intraday support/resistance:
SPX 1777/1800
DTX 720.7/734.7
DJIA 15740/15940
Nasdaq 4095/4146
RUT 1130/1146
VIX 15.7/16.9 (falling VIX is bullish)
Trin range: 0.95 - 1.35 (rising Trin is bearish)
Average VWAPs: +100/-58 (bullish but bears still hanging in)

January 29, 2014

Market Notes (4:30pm ET): The major averages are having a tough time holding onto key support levels. Any further drop from today's close would be a sign that the bears have regained control making it very likely we'll see a test of the next support levels which are 1750 for the S&P, 15500 for the Dow Industrials, and 4000 for the Nasdaq.

Well, the cold weather that is currently crippling the South has put pressure on gas reserves causing the Natural Gas etfs, GAZ and UNG, to jump to new highs by 13% and +11% respectively. This is good news for shareholders in those etfs but bad news for those who will be suffering from sticker shock when they open their next gas bills. Any significant increase in the cost of energy results in less money that people have to spend elsewhere meaning that consumer discretionary stocks could suffer as a consequence. Retail stocks in particular have been under recent pressure with Target (TGT) and Big Lots (BIG) both slipping to new yearly lows.

Looking globally, emerging markets continue to suffer. South American and Latin American stocks have been hit particularly hard. Sinking to new lows today were the country funds of Brazil (BRF), Chile (ECH), and Latin America (GML, LATM, ILF).

One bright spot was the after-hours jump in Facebook (FB) shares. The social media company just reported earnings and announced a better than expected increase in revenues, particularly in mobile advertising which was the major area of concern to most analysts. Shares of Facebook are up about $3 (approximately 5%) at the time of this writing.

2:30 pm ET: Intraday support/resistance:
SPX 1770/1790
DTX 719/728
DJIA 15710/15930
Nasdaq 4047/4093
RUT 1122/1134
VIX 16.7/18.05
Trin range: 0.75 - 1.1
Average VWAPs: +57/-86 (mildly bearish but bulls are trying to stage a comeback)

January 28, 2014

1:50 pm ET: Intraday support/resistance:
SPX 1779.5/1798.5
DTX 719.5/735.5
DJIA 15840/15970
Nasdaq 4068/4108
RUT 1128.5/1138.5
VIX 15.8/17.3
Trin range: 0.6 - 0.85
Average VWAPs: +66/-57 (bull/bear battle)

Intraday Notes (11pm ET): The intraday levels are showing more room to run to the upside. Bullish indications: The DTX is holding 720 support and the day-over-day movement in both the Trin and the VIX is down. Bearish indications: Heightened negative VWAPs show selling in weaker issues plus the VIX is still on the bear side of 15.

January 27, 2014

Market Notes: Investors cooling on Chile, getting sweet on cocoa, souring on sugar
The major averages followed through on Friday's sell-off until the bulls stepped in mid-day causing the market to reverse. The rally was short-lived, alas, as the bears charged back going into the close. Although the VIX closed well off its intraday high of 19, it's still in bearish territory and it appears that there's a good chance the market will close the month of January in the red. But, hey, there's still a few days left...

Emerging markets in particular have been under intense selling pressure. Argentina has been a favorite punching bag as of late but it got a rest today as investors decided to gang up on its neighbor, Chile. Sliding to new lows were Chilean banks BCH and BSAC, retailer CNCO, and electric utility company ENI. It'll be interesting to see who gets pummeled next...Bolivia?

One of the few bright spots today was in soft commodities where my favorite softie , the Cocoa etf (NIB), jumped 4% breaking out to a new two year high. On the flip side, the Sugar etf (SGG) slid to a multi-year low. It broke $50 support today and appears that it is going a lot lower. Unless there's a fundamental reason to suggest otherwise, I would not be surprised if it tests its all-time low in the $37 area. A long NIB/short SGG pair trade would have been sweet and still it looks good--yum!

1:50 pm ET: Intraday support/resistance:
SPX 1774/1797
DTX 713/729
DJIA 15785/15955
Nasdaq 4044/4136
RUT 1115/1147
VIX 17/19
Trin range: 0.75 - 1.4
Average VWAPs: +88/-59 (mildly bullish)

January 24, 2014

Market Notes: Where's the next stop?
All of the major averages breezed through current support levels today. The VIX hopped the bull/bear fence at 15, gaining over 30%--a ginormous move for this index. You can read the financial news for the expert opinions on why today's sell-off was so dramatic (as if there always has to be a why other than the fact that the market was overbought and buying pressure dried up). I'm just here right now to give you the next stop on the market elevator's move to the ground floor. And yes, I do believe we have a couple of more days (at least) before we drop to a level that can be honestly be called oversold. When you see the VIX spike over 20, that would be a good time to consider exiting any short positions, if recent history is any guide.

Next support levels (current levels in parentheses):
SPX (1790): 1775 (also close to its 100dma); 1750
DTX (726--sitting on its 50dma): 720; 710; 700--its 100dma
DJIA (15880--busted through its 50dma this morning): 15700 which is below its 100dma
Nasdaq (4128): 4100 (50dma); 4000 (roughly its 100dma)
RUT (1144): 1140 (50dma); 1120; 1100 (below its 100dma)

Intraday Market Notes (2:20pm ET): Well, the DTX never had a chance to test 760 as the market sold off from the open. Intraday levels are showing that the major averages still have more room to run to the downside which is supported by a lower Trin. (If the Trin was a lot higher we could have a market reversal but it sure doesn't look like that's going to happen today.) The good news is that the bulls are still in the picture as shown by relatively decent average positive VWAPs but a lot of the buying pressure is focused on leveraged bear exchange traded vehicles (etfs and etns) in the Q's, S&P 500, financials and long VIX funds. Back atcha' later...

2:05 pm ET: Intraday support/resistance:
SPX 1797/1827
DTX 726/756
DJIA 15875/16205
Nasdaq 4132/4198
RUT 1139/1165
VIX 14.9/17.3
Trin range: 0.9 - 1.25 (neutral)
Average VWAPs: +49/-151 (very bearish)

January 23, 2014

Market Notes: Was today's drop a one day affair?
Before you bulls get all bent out of shape at today's market drop, you should consider that the market did turn around midday. In fact, the market-leading Dow Transport Index (DTX) actually ended the day in the green--yay! Also, the VIX calmed back down and managed to close below 14--yay again! We might have had a clue that the market was about to reverse when the Trin hit 1.6 right before the turnaround. A Trin reading over 2 used to be the bearish contrarian level but nowadays 1.6--heck, even 1.5-- has been enough to indicate a reversal.

Earlier in the day we noted the bearish VWAPs (see the Intraday support levels below) but also saw that the bulls were still grousing at the gate. Well, they managed to gather strength and charged in breaking up the bears' encampment. The end of day positive average VWAP values were a very bullish 115--but the end of day negative VWAPs were a fairly bearish 60 as well. This means that the bears are ready to pounce on any sign of weakness. Right now the DTX is thisclose to breaking overhead resistance at 760 and if it can't manage to do that tomorrow morning, we may see a sharp sell-off going into the weekend. Don't forget to pack your parachute!

Today's Highlights & Lowlights: Computers and peripherals got a boost today with Logitech (LOGI, $16) reporting blow-out quarterly earnings. It also raised FY14 guidance. The combination was music to investors' ears. Acting like it was Black Friday, they elbowed their way into the stock causing the price to rise a whopping 23% on nearly ten times normal volume. The stock looks like it can easily take a run at $18, then perhaps to $20. Also getting some love was Lenovo (LNVGY, $27.50). The stock popped another 4% over yesterday's big breakout after it was announced that they're taking over IBM's server business. Just so you know, they also took over Big Blue's laptop business a while ago and both companies have been in bed together since. They've been working so closely together that I'm rather surprised that they haven't made the marriage official. Soon, perhaps..?

Well, the past month and a half has been a wild roller-coaster ride for those trading Provectus Pharmaceuticals (PVCT), a micro-cap biotech with an experimental treatment for melanoma. This drug has been hyped as a miracle cure by enthusiasts (aka momentum traders) in stock chat rooms. In just the past two trading days, the stock's price has skyrocketed from $3 to $6. After the stock hit the $6 mark this morning, an article in theStreet.com came out questioning the efficacy of the drug and the fact that the company hasn't been able to get its act together to perform a Stage II drug trial in over two years (you'd think this would have been a giant red flag). Anyway, the story obviously touched a nerve and triggered an explosive sell-off. The stock's price quickly cascaded down to a low of just $1.42 (that's a loss of 76%) in a little over four hours before it managed to claw its way back to end the day at $1.87. Those buying near the open got crushed and my heart goes out to them. (I know how much they are hurting from way too much past experience.) A lot of the traders in this name are probably dining on some tough-tasting crow. The moral of the story? Don't play these momentum names with money you can't afford to lose and if you do happily manage to turn a quick profit, consider yourself one of the lucky ones. That's the end of this story and it's likely the end of Provectus, too.

2:15 pm ET: Intraday support/resistance:
SPX 1819.75/1842.25
DTX 751/759
DJIA 16055/16375
Nasdaq 4190.5/4224.5
RUT 1166.5/1177.5
VIX 13.65/14.75
Trin range: 1.2 - 1.6 (bearish to bearish contrarian)
Average VWAPs: +47/-97 (bearish but bulls still in the picture)

January 22, 2014

2:15 pm ET: Intraday support/resistance:
SPX 1840.75/1847.25
DTX 748.25/755.25
DJIA 16305/16455
Nasdaq 4225.5/4249.5
RUT 1175.25/1181.75
VIX 12.55/13.25
Trin range: 0.95 - 1.3 (falling Trin is bullish)
Average VWAPs: +77/-51 (bull/bear battle with bulls having the slight edge for the moment)

January 21, 2014

Market Notes: Mining for profits
The recent rollercoaster ride that has characterized the movement of the stock market reflects the current tug of war between the bulls and the bears. Actually, what the market internals are showing is a rotation out of some of the previous high-flying sectors (think aerospace and defense, retail, and other consumer discretionary industries) and into areas that have been unloved until recently. We've been noting the stealth rally in shipping stocks, particularly the rise of the Shipping etf (SEA) which has gained nearly 50% off its recent November low of $15. Technically, the stock is in rally mode with further gains on the horizon.

Metals and mining stocks are topping the new darlings list. Aluminum manufacturers, for one, have been drawing a lot of investor attention. Today, Alcoa (AA, $12.13) received an analyst upgrade with a price target of $15 (roughly 20% above today's close) citing a looming aluminum shortage for virtually everywhere in the world except China. Besides Alcoa, the other notable gainers in this space today were Century Aluminum (CENX, $12.24) and Alumina (AWC, $4.62). Century Aluminum was also favorably noted in the analyst's review and judging from its chart, it could take a run to its next resistance level at $20--that's 60% above today's close.

The second mining group that is beginning to see a lot of inflow is uranium. Today, shares of the Uranium etf (URA, $16.56) jumped over 4%, breaking out of a four and a half month base on over seven times normal volume. It was helped by the 5% moves in its top three constituents--Cameco (CCJ, $23.08--which broke out to a new yearly high), Denison Mines (DNN, $1.39), and Uranium Participation Corp (URPTF, $5.25). These three stocks together comprise nearly 45% of URA's holdings. The other big mover in this space was Energy Fuels (UUUU, $7.93) which exploded through $7 resistance gaining 17% on the day alone! On a purely technical basis, Cameco and Energy Fuels sport the most bullish charts.

The last group getting a lift is the gold miners, especially the junior miners. Both the Gold Mining etf (GDX, $23.70, +1.6%) and the Junior Gold Miner etf (GDXJ, $37.98, +3.8%) have been rising off recent lows and today they broke near-term resistance levels on heavier than normal volume. Could this be the beginning of the next gold rush?

1:50 pm ET: Intraday support/resistance:
SPX 1832.5/1849.5
DTX 741.75/751.75
DJIA 16300/16520
Nasdaq 4193/4230
RUT 1168/1177
VIX 12.45/13.45 (rising VIX is bearish)
Trin range: 1.2 - 1.45 (rising Trin is bearish)
Average VWAPs: +83/-64 (bull/bear battle with bulls having the edge for the moment)

January 17, 2014

2:00 pm ET: Intraday support/resistance:
SPX 1840/1846
DTX 740.5/745.5
DJIA 16380/16510
Nasdaq 4201.5/4220.5
RUT 1169.5/1174
VIX 12/12.6 (bullish to bullish contrarian)
Trin range: 1.0 - 1.3 (falling Trin is bullish)
Average VWAPs: +62/-76 (bull/bear battle)

Market Notes: 2:15pm ET: The intraday support/resistance levels are indicating rangebound action for the S&P (SPX) and the Russell (RUT) for the rest of the trading session. The other indices, however, show that there's some room to the upside--good news for the bulls. Supporting the bullish case is downward movement in the Trin but the upward movement in the VIX could trump that action. High VWAP levels on both the positive and negative sides generally indicate rotation out of certain stocks and/or sectors and into others. Today, we're seeing money flowing into healthcare, big pharma, along with transportation and logistics and flowing out of investment banks, information technology (IT), and consumer discretionary.

January 16, 2014

1:35 pm ET: Intraday support/resistance:
SPX 1840.5/1848
DTX 741.5/749.5
DJIA 16350/16480
Nasdaq 4204/4220
RUT 1168.7/1172.7
VIX 12.25/12.65 (rising VIX over yesterday is bearish but still in very bullish territory)
Trin range: 1.2 - 1.6 (way up over yesterday which is bearish but is falling which is bullish)
Average VWAPs: +86/-58 (bull/bear battle currently with the bulls having the upper hand)

January 15, 2014

2:00 pm ET: Intraday support/resistance:
SPX 1840.5/1854.5
DTX 745.5/749.5
DJIA 16375/16565
Nasdaq 4196/4222
RUT 1166/1172
VIX 11.8/12.5 (contrarian)
Trin range: 0.75 - 0.95 (bullish to neutral)
Average VWAPs: +72/-69 (bull/bear battle--likely some rotation going on)

January 14, 2014

2:10 pm ET: Intraday support/resistance:
SPX 1821.5/1841.5
DTX 736.5/746.5
DJIA 16260/16390
Nasdaq 4126/4189
RUT 1151/1164
VIX 11.7/12.8 (contrarian)
Trin range: 0.7 - 1.0 (neutral)
Average VWAPs: +100/-47 (bullish)

January 13, 2014

Market Theme: Consolidation It's no surprise that the market decided to take some time off. There were two signs that a sell-off was in the offing: 1. Whenever the S&P rises 6% to 8% above its 100 day moving average (dma), it sells off. But timing the sell-off is the tricky part...unless you throw in the VIX, leading us to point #2. The VIX has been falling and today it dipped below 12. Virtually every time it's done that in the past few years it was immediately followed by a sell-off and today was no exception.

In fact, the action today was so bearish that further downside is indicated. Market internals were ugly with negative VWAPs (an indication of institutional selling) firmly in the uber-bearish zone (averaging around -180 at the close). As soon as the VIX dipped under 12 just after the open, it began its upward march and ended the day up over 9%, the largest one day gain in a month. The daily candlestick chart of the Dow Transport Index (DTX) is showing a bearish engulfing bar while the S&P and the Dow Industrials both broke near-term support levels. Only the Nasdaq is hanging onto 4100 support--but I won't be surprised if it punctures that tomorrow. So how much of a correction are we in for? The daily chart of the S&P shows that the 50 dma and the 100 dma have acted as support levels in recent years--1800 and 1750 respectively. A move to the 1750 level represents only a 5% drop from the S&P's recent high of 1850. Some pundits are calling for a 10% correction which corresponds to the 1665 level. Just so you know.

Retail getting marked down
One of the retail etfs--the XRT-- fell through $85 support and is closing in on major support at $83. Not helping it were yoga maker Lululemon (LULU) which announced anemic holiday sales and guided both earnings and revenues lower. Also on sale were teen retailer Aeropostale (ARO) which sunk to its lowest level in ten years (and appears to be heading lower--perhaps out of business?) and Bon-Ton Stores (BONT) which lost 14% as it, too, lowered guidance citing weak holiday sales. With the continued rise in online shopping, malls may become extinct sooner rather than later. Now where am I going to go to get my exercise?

2:00 pm ET: Intraday support/resistance:
SPX 1826.5/1843.5
DTX 741.5/748.5
DJIA 16315/16455
Nasdaq 4141/4180
RUT 1151/1164
VIX 11.8/12.6 (contrarian)
Trin range: 0.7 - 1.1 (neutral)
Average VWAPs: +33/-149 (very bearish)

January 10, 2014

Intraday notes (2:25 pm ET): This morning's much worse than expected employment report may be one reason behind today's divergent market action. The intraday levels on the major averages are showing that there's more room to the downside in all but the Transport Index (DTX) which is indicating that it wants to go higher. Since the DTX is a leader in market direction, this is good news for the bulls. The only thing that can put the brakes on this rally is the VIX which is edging close to the dreaded 12 mark--a sign that investors are becoming too complacent. Right now a correction would be healthy as we are straying farther and farther from the mean but a correction would only be a temporary digestion of market gains. I was perusing the longer term charts (monthly, quarterly, and yearly) of the major indices last night and it appears that we are beginning the next stage of a huge--and I mean HUGE--run to the upside. I think that Payden & Riegel is right when they say that global trade is still in its infancy and now is a great time to be in the investment community. And I think that if you can pick up high quality names with global expansion opportunities during market corrections, it would be prudent to do just that.

2:00 pm ET: Intraday support/resistance:
SPX 1830/1843
DTX 738/747
DJIA 16345/16485
Nasdaq 4142/4173
RUT 1155/1162.5
VIX 12.3/12.9
Trin range: 0.85 - 1.15 (neutral)
Average VWAPs: +94/-49 (bullish but bears still grousing around)

January 9, 2014

1:55 pm ET: Intraday support/resistance:
SPX 1830.75/1843.25
DTX 732.25/739.75
DJIA 16375/16525
Nasdaq 4142.5/4182.5
RUT 1152/1164
VIX 12.85/13.3
Trin range: 1.05 - 1.40 (rising Trin is bearish)
Average VWAPs: +65/-88 (moderately bearish but bulls still in the picture--could be some beginning of the year portfolio rebalancing going on)

January 8, 2014

2:20 pm ET: Intraday support/resistance:
SPX 1831.5/1841.5
DTX 725.75/731.5
DJIA 16420/16530
Nasdaq 4145/4177
RUT 1152/1160
VIX 12.75/13.25
Trin range: 0.5 - 0.75 (bullish)
Average VWAPs: +83/-60 (moderately bullish but bears still hanging around)

January 7, 2014

1:45 pm ET: Intraday support/resistance:
SPX 1828.7/1842.3
DTX 724/733
DJIA 16430/16590
Nasdaq 4126.5/4163.5
RUT 1151/1163
VIX 12.4/13.3 (falling VIX is bullish but getting to be contrarian)
Trin range: 0.85 - 1.2 (rising Trin is bearish)
Average VWAPs: +84/-53 (moderately bullish but bears lurking in the background)

Intraday notes (2:45 pm ET): Today appears to be a mirror image head-fake of yesterday's mid-day reversal to the upside. The intraday levels show that the major averages have a lot more room to move to the upside but it's going to take a concerted effort by the bulls to raise the averages up to their earlier highs. Market internals are favoring the bulls but the bears are showing that they're not giving up the fight. The VIX is continuing to drop--a bullish sign--but should it fall to its historic contrarian level of 12, a reversal in market direction could be imminent.

Today's market highlights/lowlights (3pm ET): It's hard to believe that faith in the PIIGS (Portugal, Ireland, Italy, Greece, Spain) has been restored but it has--that is if today's chart action is any reflection. Today, the Spain etf (EWP), the Greek etf (GREK), and the Ireland etf (EIRL) all broke recent resistance to hit multi-year highs. No way you say? Well, how about this: Italian debt is attracting so many buyers that its current yield is now under 1%. Compare that with yields upward of 15% only several years ago. It appears that the PIIGS have turned into the sacred cows.

In currencies, the Canadian dollar, aka the Loonie (FXC), continues to slide. Today it gapped under its recent support level at $93 and is bent on testing major support at $92. A break through that would likely send it sliding further towards its next level of support at $90. The Loonie is considered a play on the hard commodities and if one considers the slide in all of the metals along with the fall in oil prices as well as the slowdown in China, it's not hard to figure out why the Loonie has been spiraling downward.

That's it for now.

January 6, 2014

2:00 pm ET: Intraday support/resistance:
SPX 1820.5/1837
DTX 719.5/737.5
DJIA 16375/16535
Nasdaq 4096/4140
RUT 1146/1160
VIX 13.3/14
Trin range: 0.55 - 0.85 (low Trin is bullish but it is rising which is bearish)
Average VWAPs: +58/-64 (bull/bear battle)

Intraday notes (11:20 pm ET): This could be one of those days where the intraday pivot levels aren't where they appear to be (at least to me). The intraday levels suggest that there's a lot more room for movement to the downside but we just got a nice pop off the intraday low. It's not clear what caused it--a computerized buy signal? Anyway, we'll see if this rally can continue into the close...

January 3, 2014

1:55 pm ET: Intraday support/resistance:
SPX 1826.75/1838.25
DTX 729.75/736.25
DJIA 16435/16515
Nasdaq 4123/4153
RUT 1151.25/1156.25
VIX 13.85/14.25
Trin range: 0.8 - 1.35 (rising Trin is bearish)
Average VWAPs: +40/-54 (neutral; light volume)

January 2, 2014

1:50 pm ET: Intraday support/resistance:
SPX 1828/1847
DTX 726/740
DJIA 15405/16575
Nasdaq 4130/4160
RUT 1146.5/1160.5
VIX 14/14.16 (rising VIX is bearish but still in bullish territory)
Trin range: 0.65 - 1.05 (rising Trin is bearish)
Average VWAPs: +45/-97 (bearish but there's some beginning of the year rebalancing going on)

Recent Articles
Is it about to rain on this rally?
July 3, 2014 at 3:14 pm

Today’s better than expected jobs number helped hoist most of the major averages to new highs…and pushed the volatility index (VIX) to a low not seen since the beginning of 2007.  While historically the VIX has shown that it can stay at depressed levels for a while, there is an indication that it may not be hanging out here for much longer.

VVIX/VIX divergence
The VIX volatility index (VVIX) is a measure of the implied volatilities of the options that make up the VIX.  It is an indicator of the expected volatility of the 30-day forward price of the VIX. The VIX and the VVIX usually move in concert with each other but lately there’s been a divergence in direction.

The charts below show that from the beginning of February to mid-May the general trend of both indices was down.  Since then, the VIX has continued its downward trend but the VVIX seems to have reversed course and appears to be trending in the opposite direction.  While this could be just a temporary phenomenon that may be explained by the differences between the underlying models involved in the calculation of each index, it could also mean that the era of the ultra-low VIX and an ever rising market is coming to an end.

Not to rain on anyone’s Fourth of July picnic, but it might behoove long-term investors to consider buying put protection as a hedge especially since options are at fire sale prices. Remember, it’s better to carry an umbrella and not have to use it than to be caught without one in a sudden downpour.

 

VVIX chart

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