A positive open for the stock market today reversed course as the S&P 500/Nasdaq Composite closed near the bottom of their intra-day trading ranges. The DJIA was flat in the session. Market breadth once again swayed towards the negative side and investor participation was somewhat there to validate the down session. Earnings season began after the closing bell tonight with Alcoa (symbol: AA) beating the EPS forecast but missed the revenue forecast. The next bunch of sessions should set the tone for the stock market direction as earnings season kicks into full throttle. Based on the trend we are lowering the support/resistance levels on the S&P 500 (SPY) and keeping them the same for the Nasdaq Composite (QQQQ) (see below). For the DJIA (DIA) we are lowering its support level and leaving its resistance level the same (see below). Sort of a mixed bag but not unexpected before earnings season. As we have been mentioning complacency among investors is very high and volatility low going into earnings season. This sort of makes you feel that unless companies beat or raise their numbers a decent amount the market might be fully priced and due for a correction. The prudent approach right now is to be cautious. Be careful with adding to stock positions, protect profits, and keep losses small. If you need to own stocks, please see our watch list below.
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