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Chip Makers Lead The Market Lower

|Includes: DELL-OLD, GOOG, Intel Corporation (INTC), STP, TSL, TXN

The market started out weak on an inline unemployment report.  The chip makers led the market lower as Bank of America downgraded both INTC and TXN.  INTC lost 4.08% while TXN dropped 3.38%.  If you read the above linked article, you can really get a sense that it is a "ratings game".  The timing was just too perfect as the semiconductor index (NASDAQ:SOXX) had recently risen above 300 and was about to turn bullish (above 350, SOXX will have risen above a downward trend that started back in Oct 2007).  Elsewhere, the Chinese solar stocks were strong as both TSL and STP reported solid earnings.  TSL jumped +6.6% and STP finished +5.96% higher.  We cashed out the rest of our position in TSL for a +192% gain:

November 19, 2009
07:02 | HappyTrading TSL ($44.15) Sold to Close TSLKR Nov 37 calls, at $7.00 +192%

We've been locking in profits all weak and are now back to mostly cash. 

Google (NASDAQ:GOOGunveiled more information on its Chrome OS, which could seriouly challenge Microsoft's virtual monopoly on personal computer operating system software.  Google's PC is promising to start and be on the Internet in less than seven seconds!  Given the selling pressure on today's market, GOOG held up well and closed down only 0.63%.

After the market, DELL missed its earnings estimates although it reported signs of improvement in PC sales.  DELL shares fell 6.05% this evening.

The Dow finished dow 93.87 points; SPX lost 14.90 points; Nasdaq fell 36.32 points:

As mentioned above, SOXX (semiconductors) led the market slide with a 3.43% loss.  Commodity sectors were mostly weak:  XME (metals and mining) -1.67%, OIH (oil services) -3.71%, XLE (energy) -2.24%.  GLD (gold) and SLV (silver) managed to come back into the green.  XLF (financials) stayed weak.  FXI (Chinese ADRs) fell 2.08%.

SPX

SPX fell 14.90 points to close at 1094.90, below the 1100 level.  It closed right at its 10-day MA.  The MACD flattened.

Nasdaq

Nasdaq dropped 36.32 points to close at 2156.82.  It closed below its 10-day MA and the MACD slid slightly.

As I mentioned yesterday,

"For the past 3 months, the market has been rallying to start the month.  But, right around the options expiration week (3rd week of the month), things start to stutter, going sideways."

It appears that the market is going into another consolidation period.  Unless the market somehow bounces back to close above SPX 1100, we'll likely see the market range-bound for the next couple of weeks.  VIX jumped up above 24 intraday, but closed below 23 again.  With the DELL's earnings miss, the market will start likely start tomorrow with a negative tone.  Financials are still looking very weak.  We'll probably see some bounces intraday tomorrow, just because it is options expiration day.  So, expect some volatility!

Good night and HappyTrading! ™