Stocks rose in today's session with the major indexes increasing their distance above their moving averages. Investor participation was slower with a holiday weekend approaching. Market breadth was positive. We are raising the support/resistance level on the S&P 500 (see below). For the DJIA (DIA) we are raising its resistance level but keeping its support level the same (see below). We are keeping the support/resistance levels the same on the Nasdaq Composite (see below). The DJIA is currently the only index sitting above its recent April high. The S&P 500 (SPY) is sitting right below its February high of 1,343 and the Nasdaq Composite (QQQQ) is sitting right below its February high of 2,834. Next week should be telling to see if the S&P 500 and Nasdaq Composite are ready to march to new highs or a well deserved break for the market is in store. One thing for sure is there are not many investors who are currently bearish on the market. The Volatility Index (VIX) is sitting at such a low complacency level that the market has not seen in years. Our feeling is the longer the market sentiment stays this complacent the stronger and more painful correction we are going to see. The Semiconductor Index (SOX) for the third time in recent trading is flirting with overtaking its 50-day moving average and seems to be lagging the other major indexes. This could be an indication that stocks might face some headwinds soon. Many stocks are currently extended beyond proper buy points so caution is in order before committing funds to additional stock positions. If you need to own stocks, please see our watch list below. In our watch list today we removed the position in Apple (symbol: AAPL) at the closing price of $350.70. We felt from a technical perspective that the stock is not acting well even though the fundamental information has been good recently. We added AAPL on Thursday, February 24, 2011 at the intra-day price of $340.33. While on the watch list AAPL returned 3.0% in 56 days.
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