Stocks closed mixed yesterday following a dull session in which investors
focused on the small country ofSlovakia.Slovakiawas the last of 17 countries in
the euro zone to vote yesterday on an expansion of the zone's rescue fund. The
world waited but the final decision, a rejection, came after stock markets in
the west were closed. The obsessive focus on Europe and its impact on
theU.S.markets may be warranted due to the global nature of business. But it
could also be the result of the public's withdrawal from stocks, which results
in an overall condition much like war days of boredom punctuated by hours of
sheer terror. Just 882 million shares traded on the NYSE yesterday and 441
million on the Nasdaq. And on both the Big Board and Nasdaq, advancers exceeded
decliners by about 1.5-to-1. Nevertheless the CBOE Volatility Index (VIX) still
hangs over the market threatening to again turn calm into chaos. The index
closed yesterday at the lower end of its two-month range but still above 30 a
number which is generally thought to be the beginning of high volatility that
favors the bears. It is sometimes helpful to view long-term charts with a
cluster of moving averages. These charts give perspective to the current market
because the formations are so similar. Note the failures of prices to break
through these clusters in this weekly chart going back to 1996 and how quickly
prices fell afterward. (Please excuse the quality of the chart and thanks to
Ciovacco Capital Management for the long-term idea.) One of the lines in the
long-term chart was a 300-day moving average. If past is prologue, then the
resistance from 1,220 to 1,230 is a very important area of overhead congestion.
A break above that line would probably lead to a test of the neckline at 1,260
and the change of the overall trend from down to sideways. But a failure could
lead to another leg down. Experienced traders like my colleague Joe Burns are
able to lock in profits no matter what the market is doing. In fact, he just
captured profits of 43%, 50% and 57% in only one day. You can check out his
system here. Todays Trading Landscape To see a list of the companies reporting
earnings today, click here . For a list of this weeks economic reports due out,
click here .
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