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August 2 2011 - Selling Intensifies
August 1 2011 - Bear Returns
July 28 2011 - Before The Open
July 27 2011 - Down But Are We Out?
July 20 2011 - Stock Market Volatility
July 18 2011 - Investors' Nervousness
July 15 2011 - Earnings VS Bleak Data
July 14 2011 - Below 1310
July 13 2011 - Ugly Looking Chart
July 12 2011 - Razor's Edge
July 8 2011 - Nasdaq Leads The Way
July 5 2011 - Expected Weakness
July 1 2011 - Overbought
Jun 28 2011 - July Rally?
Jun 27 2011 - Mixed Signals 
Jun 21 2011 - Bottom Or Bounce?
Jun 16 2011 - Raising Cash
Jun 15 2011 - More Downside To Come?
Jun 14 2011 - Bounce or Bottom?
Jun 12 2011 - Batten Down The Hatches
Jun 6 2011 - Bounce Sometime Soon?
Jun 2 2011 - Sell Signals and Warnings Everywhere
Jun 1 2011 - How Bad Could The Selling Get
Jun 1 2011 - Tread Carefully - Markets Remains Overvalued
May 31 2011 - Success - 100 Day Moving Average Tested
May 17 2011 - Be Careful Out There
Apri 18 2011 - Two Bears Compared
Apr 13 2011 - Why I Bought Puts Today
Apr 4 2011 - Breaking The February Highs
Mar 16 2011 - The Art Of Being Wrong
Mar 15 2011 - Market Remains Resilient
Mar 11 2011 - Trend Is Down
Feb 25 2011 - Trend Turning Bearish
Feb 11 2011 - Still Up - But Watch For June
Jan 3 2011 - Trend Remains Positive


Market Direction Call S&P 500

July 14 2011 - Below 1310


The Markets Sit Precariously On Support

Today started off not too badly but then once again the on again and off again news of possible support from the Federal Reserve when Bernanke spoke around 10:00 AM, hit the markets and the selling began. The VIX ended up above 20.00 which you may recall from my article on Understanding The VIX, some investors consider a signal to sell.

As you may recall from my market direction call of July 5 I indicated that the S&P 500 was probably going to test the 1310 and if that broke than the 1300 marked the last line of support before a retest of the 200 day moving average.


Today's action saw the market struggle to hold at the 1310 and indeed several times it moved back above it, but in the end the selling pressure couldn't be contained and the market moved to close below 1310.

S&P500 chart - July 14 2011

The next move may be to the 1300. If that breaks than the 200 day moving average I believe will be retested. If that breaks than it could signal a major move down and possibly an end to the bull market. Let's hope this is not the case.

Below is the XLF and for most of the day it stayed below 15.00 and closed on the low of the day, a very negative sign.

XLF Stock Chart - July 14 2011

The NASDAQ fell another 1.2% today and closed pretty close to the lows of the day. Again a bad sign. The NASDAQ rally is gone and we are heading back to the 50 day moving average.

Be careful until the market signals exactly its intent. The market could surprise to the downside with a sudden lunge lower should it take out the 1300 easily. While I don't see it, a drop of 200 to 400 points would shock congress and the Fed into realizing that they cannot play too long with the debt ceiling and the S&P Possible Ratings Downgrade. I have raised a lot of cash and tomorrow I have more options expiring. I will be waiting a few days before applying that cash back into the markets.



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