Stocks eased today with the declines ranging between 0.3% and 0.5% on the DJIA (DIA), S&P 500 (SPY), and Nasdaq Composite (QQQQ). Investor participation picked up and market breadth turned negative. The losses weren't enough to adversely change the support/resistance levels materially. In fact, we are raising the support levels on the DJIA, S&P 500, and Nasdaq Composite based on the trend (see below). In addition, the resistance levels are basically unchanged (see below). However, many stocks are past proper buy points and we continue to feel the risks outweigh the rewards for putting new money to work. The prudent approach indicates to protect profits and keep losses small based on the stock market direction. If you need to own stocks, please see our open watch list below. In a special after market alert we wrote that Family Dollar Stores (symbol: FDO) a stock in our watch list has received a bid to be taken private. Now we don't know the final bid price but we are removing it from the watch list at tomorrow's market open price. Based on what has been said publicly it looks like the offer price is between $55-$60 a share. This will yield a return of between 23%-34% while (FDO) was in our watch list for 26 days.
No positions in securities mentioned.
BTDStocks.com Tuesday, February 15, 2011 End-of-Day Update
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