9:00am (EST)
The bulls got some green numbers on Wednesday although the market’s gains were limited. After a nice open, the bears come out at lunch and had a quick nibble but left after feasting for two days. There was plenty of uninspiring news but it was good to see the bulls battle back despite unflattering results from corporate America and sour economic headlines.
The Dow managed a 7 point win and closed at 12,270 but ran into trouble at prior support which was at 12,350 and now resistance. The index reached 12,335 but we are starting to see lower highs and lower lows for the blue-chips which is not a good sign.
The S&P 500 added a quarter of a point and finished flat at 1,314. The bulls were hoping to get to 1,325 but could only manage a run up to 1,321. The low was 1,309 and a break below 1,300 will cause some panic.
The Nasdaq stayed in positive territory for the entire session and gained 16 points to settle at 2,761. We liked the close above 2,750 and the index kissed 2,772 but the 2,800 level remains a brick wall. There is further risk down to 2,700-2,650 and some of the high beta stocks are still struggling.
The technical charts are still telling us this market could go either way but our fundamental analysis is calling for a pullback. A few things we are seeing: a breech of the 50-day moving averages, a lower close on a Friday and Monday which has only happened twice this year, and the other aforementioned issues we have mentioned. Plus, the one group the bulls have been counting on, the Financial stocks, have done nothing this week.
We all know bull markets can climb a wall of worry but we are starting to see a lot of bearish option trades work which is telling us we could be setting up for a short-term trend to the downside.
Okay, let’s forget about the market for a minute. For those who have been with us for a few years, check out today’s chart on Dendreon (DNDN, $38.78, up $0.21) inside our Members Area which has been pushing resistance recently. We said when shares were under $5 three years ago that their drug, Provenge, could be a huge blockbuster and we were the first newsletter (to our knowledge) to put a $50 price target on the stock. We even went head-to-head with Cramer when he was telling everyone “don’t buy, don’t buy” ahead of the FDA announcements.
Shot of the day…the President called for $4 trillion in cuts and asked for our help. Geez, the average government worker makes $80,000-$90,000 a year while the private worker makes on average $60,000. The cuts need to start on the White House (and State) payrolls not the American taxpayers. Wanna trim some fat? Start there or take some “essential” pay cuts.
Futures are pointing towards a weak open…Dow futures are lower by 45 points to 12,154 while S&P 500 futures are off by 7 points to 1,302. The Nasdaq 100 futures are down 13 points to 2,295.
]]>