From the Trading Desk

The Market Hits Stall Speed as the Market Digests the State of the Union

Stocks enjoyed buying through the early morning session as Europe rebounded from its recent pullback. By 10:30 the market changed behavior as it simply could not maintain its high of the day. Thirty minutes prior to the European close the market took a nose dive and hit the lows of the session. Volume was running higher throughout the session and indicating the market had begun hitting stall speed. A late day push from CSCO and AAPL assisted the market lifting from the lows of the session, but the Dow Jones Industrial Average did not escape a day of distribution. Tough to call a stall day on the NASDAQ, but for back to back days the index has been unable to hold the highs of the day. The market is having a tough time with the highs up here. We remain in an uptrend and while there are subtle signs of cracks we haven’t had an all out sell signal.

CSCO reported earnings after the bell and they beat their numbers. However, the initial pop the stock enjoyed was short lived with the stock pulling back. The stock has been on a heck of a run since November contributing to the success of the NASDAQ. Given the action now it appears all is well with the stock, but tomorrow is a new day and anything is possible. If you are long the stock, just know where your exit is.

It appears the past few sessions earnings have not been kind to the majority of stocks. PRLB is an exception after earnings. The stock blasted higher with volume to boot. A very good sign for those who are long the stock. PCYC was another earnings winner. CMCSA started the day off right, but like the market was unable to sustain the high. The loss of the day came from a growth stock RAX. RAX clearly disappointed the street as the stock fell hard in massive trade. This is not what you want to see out of a growth name. BWLD was another loser on the day. Earnings season has created quite the volatility in stock movements. INVN and KORS continued their slumps.

There are positive and negatives to the current market rally. Everyone and their mother are expecting a pullback. When and how this market correction unfolds is anyone’s guess. It is tough to really say we have hit a market top without major distribution following these stall days. Know your exits and wait for your price signals to hit.

Short-Term Trends:

TICKER ST TREND TREND CHANGE DATE CLOSE %
SPY UPTREND NO CHANGE 2/13/2013 152.15 0.09%
IWM UPTREND NO CHANGE 2/13/2013 91.48 0.42%
QQQ UPTREND NO CHANGE 2/13/2013 67.97 0.35%
USO UPTREND NO CHANGE 2/13/2013 35.19 -0.26%
UNG DOWNTREND NO CHANGE 2/13/2013 18.52 1.37%
GLD DOWNTREND NO CHANGE 2/13/2013 159.05 -0.53%
SLV DOWNTREND NO CHANGE 2/13/2013 29.77 -1.06%
DBC UPTREND NO CHANGE 2/13/2013 28.51 0.04%
FXY DOWNTREND NO CHANGE 2/13/2013 104.85 0.09%
FXE UPTREND NO CHANGE 2/13/2013 133.36 -0.04%
TLT DOWNTREND NO CHANGE 2/13/2013 116.74 -0.81%

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