The general stock market declined once again for the fourth straight session on the S&P 500 (SPY) and Nasdaq Composite (QQQQ). Market breadth was negative and the action of investors showed them selling energy based shares and light crude oil declining over 9% to finish at approximately $99 after recently trading near the $115 area. The Nasdaq Composite showed some strength intra-day in today's session as it spent the majority of the session in positive territory. Late day selling turned the Nasdaq Composite negative. Based on the current stock market direction we are lowering the support/resistance levels on the S&P 500 (see below). For the DJIA (DIA) and Nasdaq Composite we raising their support levels and keeping the resistance levels the same (see below). Albeit the increase in the support level was only one point on the Nasdaq Composite. The S&P 500 and Nasdaq Composite tested their 21-day moving averages intra-day and were able to close above them. The DJIA has yet to test its 21-day moving average. All of them remain well above their 50-day and 200-day moving averages. The major indexes might be trying to form a new base to trade higher from at their respective 21-day moving averages. The jobs report tomorrow might shed some light and confirm if this is true or not. The Semiconductor Index (SOX) once again test successfully intra-day both its 21-day and 50-day moving averages and held above both of them on a closing basis. This is another encouraging sign that the market might be forming a new base to trade up from. However, until we get confirmation of a new uptrend the best approach it to be cautious and limit your buying of stocks. Keep protecting your profits and limit your losses. If you need to own stocks, please see our watch list below. In our watch list today we removed the position in the ProShares Ultra Short Oil & Gas Fund (symbol: DUG) at the intra-day price of $29.81. We added this position on Thursday, April 28, 2011 at the intra-day price of $26.80. The position in DUG returned 11.2% in 7 days while on the watch list. We have no remaining position in DUG on the watch list.
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