btdstocksblog's  Instablog

The market opened the session on Tuesday with strong losses in the area of approximately 3% on the major indexes due to the turmoil in Japan.  As the session wore on stocks recovered more than half of their losses (a nice sign from a trading perspective).  However, staying with the trend we are lowering the support/resistance levels on the DJIA, S&P 500, and Nasdaq Composite (see below).  Investor participation was strong and market breadth negative.  In addition, investor fear grew in today's session as the Volatility Index (the VIX) rose 15.1% to 24.32 and cleared its 200-day moving average.  This was the highest close for the VIX and highest fear level in the market since late November 2010.  As we mentioned in last night's post based on the current stock market direction now is an ok time to nibble at opening new positions in stocks if you are an aggressive investor.  The option for more prudent investors is to remain defensive until we get more confirmation from the market.  If you need to own stocks, please see our watch list below.  In our watch list today we removed the positions in the ProShares Short S&P Fund (symbol: SH), the ProShares Short QQQ Fund (symbol: PSQ), and Short Russell 2000 Fund (symbol: RWM) opened on February 7, 2011 and February 16, 2011 at $42.71, $33.81, and $31.55, respectively.  The positions opened on February 7, 2011 in SH, PSQ, and RWM returned 2.4%, 3.5%, and 1.7%, respectively while on the watch list. The positions opened on February 16, 2011 in SH, PSQ, and RWM returned 3.9%, 6.0%, and 4.5%, respectively while on the watch list.  In addition, we also removed from our watch list the iShares Barclays 20+ Year Treasury Bond Fund ETF (symbol: TLT) at $92.54 and the iShares Barclays TIPS Bond Fund ETF (symbol: TIP) at $109.34 opened on February 11, 2011. TLT and TIP returned 3.7% and 3.7%, respectively while on our watch list.     


No positions in securities mentioned.