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BTDStocks.com Wednesday, February 2, 2011 End-Of-Day Update

|Includes: SPDR Dow Jones Industrial Average ETF (DIA), EUO, FDO, GDX, PSQ, QQQ, RWM, SH, SPY, UUP

Stocks spent most of today's session digesting the gains from this week.  Investor participation was quiet and market breadth in general was neutral.  As we mentioned in last night's post the Nasdaq Composite (QQQQ) is lagging the DJIA (NYSEARCA:DIA) and S&P 500 (NYSEARCA:SPY).  In today's session the Nasdaq Composite flirted with trying to take out the 2,755 level for the second session in a row.  While both the DJIA and S&P 500 have broken out into new ground the Nasdaq Composite remains below its recent high of 2,766 on a closing basis.  The underperformance in the Nasdaq Composite is a red flag that we are watching closely.  Today both the DJIA and S&P 500 held above their psychological levels of 12,000 and 1,300.  Intra-day they didn't even test these levels.  The market appears to be in a wait and see mode until we get the jobs report on Friday.  We still feel buying at these lofty levels is risky based on how far the stock market direction has run up. Instead the prudent approach is to keep your powder dry, protect profits, and get rid of unexpected losses quickly.  If you need to own stocks, please see our watch list below.  In our watch list we are considering adding a second position in Family Dollar Stores (symbol: FDO).  We will let you know if we do.
No positions in securities mentioned.