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BTDStocks.com Tuesday, February 22, 2011 End-of-Day Update

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

The market returned from the long weekend and experienced a strong selloff with the S&P 500 and Nasdaq Composite declining 2.1% and 2.7%, respectively.  The DJIA was down less but still finished lower by 1.4%.  Investor participation confirmed the selling pressure and market breadth was very bad.  As a result, we are lowering the resistance levels on the DJIA (NYSEARCA:DIA), S&P 500 (NYSEARCA:SPY), and Nasdaq Composite (QQQQ) (see below).  However, we are actually raising the support levels on the DJIA and S&P 500 (see below).  The support level on the Nasdaq Composite was moved down (see below).  The DJIA held above and never tested its 21-day moving average.  The S&P 500 mildly tested and held above its 21-day moving average but the Nasdaq Composite closed below its 21-day moving average.  We will be watching the 21-day moving averages closely to see if the indexes find support here or if it is going to turn into resistance.  Volatility shot up today with the Volatility Index (VIX) increasing 26.6% to 20.80.  Fear was evident in today's market action.  The prudent approach continues to be the same as we have been saying: defense.  Protecting profits and keeping losses small is the way to go based on the stock market direction.  Refrain from putting new money to work.  If you need to own stocks, please see our open watch list below.  Today we removed the 'Stock of the Day' position in the Market Vectors Gold Miners (symbol: GDX) at $58.58 based on a special intra-day alert. (GDX) returned 6.4% in 26 days while it was the 'Stock of the Day'. GDX was added on 1/27/11 at $55.04. 


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