For the second session in a row stocks experienced selling pressure even though the major indexes rallied of their lows of the session. The DJIA (DIA) and S&P 500 (SPX) were able to finish mostly flat for the session but the activity in the Nasdaq Composite (QQQQ) indicated selling with the index finishing down 0.8%. On the NYSE 1.7 stocks declined for every one that advanced. However, staying with the trend we are raising the support levels on the DJIA, S&P 500, and Nasdaq Composite but leaving their resistance levels the same (see below). Investor fear increased with the Volatility Index (VIX) rising 3.9% to 17.99 but it closed in the lower end of its trading range and was unable to re-take its 50-day moving average. If the VIX can move above its 50-day moving average then it might have the opportunity to close the gap that is slightly below 22.50. If this happens then the market will probably be lower than where it is today. Like we have been saying opening new positions in stocks is risky right now based on the current stock market direction if you are a prudent investor. Protecting profits and not letting losses grow is the logical approach right now. If you need to own stocks please see our open watch list symbols below. In our watch list we are adding Family Dollar Stores (symbol: FDO) at tomorrow's market open price.
No positions in securities mentioned.
BTDStocks.com Thursday, January 20, 2011 End-Of-Day Update
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