Gold continued its free-fall Monday, suffering its biggest
one-day loss ever, and the weakness spread to the equity markets as
(INDEXSP:.INX) saw its largest decline in five months. The 2.3%
loss in the S&P engulfed all of last week's bounce and put the
market in short-term oversold territory. Both gold and stock
futures are set for a healthy up open this morning, and it will be
very interesting to see what it leads to. Will the market continue
to be remarkably resilient in 2013, or are recent market
dislocations a sign that the long-awaited deeper correction could
After a lower open in the indices yesterday, stocks faded
throughout the session, with selling intensifying after news of
fatal explosions near the finish line of the Boston Marathon. The
S&P 500 ETF
(NYSEARCA:SPY) dropped below its 8- and 21-day moving average in
one trading session, creating a big engulfing bar on the chart. The
next support level to watch, if this gap up does not hold, is the
50-day at $154.06, which lines up with the gap from March 5.
Through sector analysis, you could see that all was not well under
the hood of this market.
(NYSEARCA:IYT) has long-since lost its leadership role and saw a
harsh sell-off again yesterday. The IYT put in a big engulfing bar
as the ETF retraced more than 4%. It is a red warning sign for the
market to see this type of action in an important sector. The ETF
came down to retest the neckline of the Head and Shoulders pattern
that has been forming since January. A break below the neckline
could bring our more sellers.
(NYSEARCA:XHB) was the weakest of them all, shedding almost 5%
yesterday and trading all the way down to its 100-day moving
average following yesterday's weakness. It also looks poised to
break the intermediate uptrend support since August 2012. A break
below yesterday's low of $28.09 could take us down to the new
year's gap at $27.12.
(NYSEARCA:XLF) tried to hold up early yesterday but followed the
weakness in the market on its way to a 2.11% loss. The ETF was
still positive just before 11:00 a.m. EDT, but succumbed to the
weakness in the broader market. The banks have kicked off their
earnings season with solid earnings last week from
), but both stocks closed lower despite surpassing supposed
consensus expectations. Yesterday we got a strong report from
), but it couldn't hold pre-market gains as the market tumbled.
) was the latest bank to report this morning, and like the others
delivered a good report but is only marginally higher pre-market.
(NYSEARCA:RTH) has been leading the market up recently and
yesterday showed relative strength with only a 1.68% decline, but
also lost its 8-day moving average. Next support level is the
21-day at around $49.12
The sell-off in
(NYSEARCA:GLD) intensified over the weekend as GLD slipped another
8.8% yesterday. The major support level of $135 that we highlighted
Friday was reached yesterday as GLD went as low as $131. The
measured move of the recent macro range could take us down to
$124-127 level, but gold is bouncing this morning back to that $135
(NYSEARCA:SLV) dropped another 12.6% yesterday after also breaking
major support Friday. If today's gap up doesn't hold, the next
major support level is at $20.70 level from March 2008's pivot
Keep an eye on stocks that are reporting earnings the rest of this
) reports Q1 earnings after the close today with estimated EPS of
$0.24 on revenue of $1.1 billion. The stock put in a new 52-week
high at $24.99 level yesterday before pulling back into its 8-day
moving average. Next support is sitting at the 21-day moving
average at $23.45.
(ISRG), which reports Thursday, is expected by analysts to book a
profit of $3.99 a share during the first quarter, up from $3.50 a
year ago. The company has enjoyed double-digit year-over-year
percentage revenue growth for the past four quarters. The majority
of analysts (78.6%) rate Intuitive Surgical as a buy. The stock saw
a major sell off late February/ early March and just started to
perk up again since March 18. It saw a nice breakout on April 11
which helped the stock to reclaim its 8- and 21-day moving average.
The 200-day at around $520 marks the next level of resistance.
(MSFT), which also reports Thursday after the close, is expecting
$0.68 in EPS on $20.5 billion in revenues for expected
year-over-year growth of 13% and 18%, respectively. The stock
continued to show weakness after its big sell-off on Thursday last
week due to a big decline in PC unit sales number, dropping below
its 200-day. The next support level is sitting are at 50-day at
$28.15, which lines up with the rising trend line since December
(AAPL) Apple shed another 2.3% Monday and is teetering on the edge
of pivot support at $419.. As the stock held this level twice
previously, often the third time is the "charm" for a breakdown. A
break below this level could bring us down to retest the support of
$408, but the next major support level isn't until the $380s. Could
AAPL provide a trade heading into earnings?
(GOOG) has been trading in an ascending channel and forming a bear
flag pattern after its four-day sell off earlier this month. It
failed to reclaim support of the 8-day moving average yesterday and
a break below yesterday's low of $777 could bring out more sellers.
Intel, Microsoft, eBay: What to Look for in This Week's
Tech Earnings Reports
Las Vegas Sands
(LVS) has been acting better but failed to build on to its recent
gains as the stock slipped more than 4% yesterday. If it doesn't
bounce off this key moving average today, we could see a further
down move to retest the next support at $50.96 from the recent
(FB) saw a breakdown out of its ascending channel at around $27.25
and went as low as $26.36. Use yesterday's low as the new point of
reference - next support is standing at $26.11.