From the Trading Desk

S&P 500 Ends Win Streak as VIX Rises; Some Leaders Stumble

Small losses on the S&P 500 and Dow ended their win streaks as AAPL boosts the NASDAQ to close in the green. Durable goods orders were boosted by BA orders coming in better than expected. Disappointing pending home sales were blamed on low supply, but nonetheless there weren’t as many pending home sales as expected. The VIX was able to hold its mid-point despite the market getting support at the lows. There were a few troubling signs with 3D printers facing heavy volume selling. Recent long signals haven’t been working as well suggesting we may be in for the market to take a rest. Our uptrend is still intact, but we do have a few warning signs of a possible pause in the market rally.

DDD and SSYS faced big losses today as these stocks have moved quite a bit from the 11/16 low in the market. It doesn’t matter if these stocks are the way of the future, for now the heavy volume selling suggests these stocks have further to correct. Today’s action is why we have our exit rules with our stocks. Outside of these stocks we don’t see too many trouble signs other than a few new longs not working immediately. KORS another leading stock had trouble today, but LNKD had no issues breaking out. It is very possible we are rotating into new names and this market will resume closing at highs by week’s end. Stay disciplined.

Tomorrow we’ll get the Case-Shiller index regarding the housing market. The index has shown much improvement since the utter disaster back in 2008 and 2009. However, it will be Wednesday when we get a reading on fourth quarter GDP growth as well as the FOMC rate decision. Federal Reserve days tend to be positive for stocks and Wednesday shouldn’t be any different. Of course we’ll allow our signals guide us via price, but the reaction to the comments by the Fed should be entertaining.

We aren’t about to call a market top or even a correction, but given the extreme sentiment readings last week and a few leaders getting hit the probability of a correction is greater. Stick to your game plan and execute.

Short-Term trends:

TICKER ST TREND TREND CHANGE DATE CLOSE %
SPY UPTREND NO CHANGE 1/28/2013 150.07 -0.12%
IWM UPTREND NO CHANGE 1/28/2013 90.00 0.07%
QQQ UPTREND NO CHANGE 1/28/2013 67.15 0.22%
USO UPTREND NO CHANGE 1/28/2013 34.94 0.46%
UNG UPTREND NO CHANGE 1/28/2013 18.55 -4.97%
GLD UPTREND NO CHANGE 1/28/2013 160.29 -0.22%
SLV UPTREND NO CHANGE 1/28/2013 29.85 -1.19%
DBC UPTREND NO CHANGE 1/28/2013 28.00 -0.04%
FXY DOWNTREND NO CHANGE 1/28/2013 107.97 0.14%
FXE UPTREND NO CHANGE 1/28/2013 133.5 -0.03%
TLT UPTREND NO CHANGE 1/28/2013 118.03 -0.36%

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