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BTDStocks.com Friday, May 13, 2011 End-of-Day Update

May 14, 2011 9:57 AM ETDIA, SPY, SOX
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For the majority of today's trading session stocks spent their time in the red. The DJIA (DIA) and S&P 500 (SPY) briefly were positive early on while the Nasdaq Composite spent the entire day in negative territory. Overall, each index declined at least 0.8% while the losses on the Nasdaq Composite and Semiconductor Index (SOX) were much broader at 1.2% and 1.4%, respectively. The major indexes closed near session lows. Market breadth was decisively negative and the today's selloff happened on a low volume drift. Some positive action the market established late last week looked to be nullified in today's session. The market might need more time to reset itself in order to establish a new base to work its way higher from. We have absolutely been seeing some sector rotation in the market with money flowing into defensive areas such as consumer staples, health care, and utilities and out of energy, financials, industrials, and materials. Over the same time with the market having some struggles technology shares overall have been hanging in there basically down only a small amount. Based on today's stock market direction action we are lowering the support and resistance levels on the DJIA, S&P 500, and Nasdaq Composite (see below). The action near recent support levels came in mixed. The Nasdaq Composite never tested its 21-day moving average intra-day today. However, the DJIA (DIA) tested its 21-day moving average intra-day but was able to close above it and the S&P 500 actually closed below its 21-day moving average. The Volatility Index (VIX) has also been spending a lot of time intra-day testing its 21-day moving average but remains near levels that can often indicate a market feeling complacent. However, we are seeing volatility pickup somewhat as the market works off its overbought conditions from early May. The market continues to be resilient as it has been doing a good job recently of ignoring some economic news that could easily have sent the markets coiling much lower than where the indexes sit right now.
No positions in securities mentioned.

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