Market Internals

Introduction

With few distractions to draw attention away from their warnings, retailers such as LuLulemon (LULU), Express (EXPR), Bon-Ton Stores (BONT), and PVH (PVH) offered disappointing guidance this morning. While big banks such as Barclays performed well in Europe, leading European indices higher, financials failed to come to the rescue in the U.S., trading lower ahead of their earnings.

Were those the reasons behind the weak performances on U.S. indices? Did Dennis Lockhart's midday inclusion of the word "disinflation" in the same talk in which he appeared to be okay with tapering rattle markets? Maybe, maybe not. Sometimes we're just due for a pullback. It's how the markets respond to a pullback that tells us more about next direction.

The SPX lost 1.26 percent; the Dow, 1.09 percent; and the NDX, 1.47 percent. The RUT dropped 1.41 percent, and the SOX, 1.13 percent. The Dow Jones Transports lost 1.40 percent. Volatility indices jumped. Financials as represented by the BKX lost 1.30 percent. Home builders as represented by the DJUSHB lost 2.53 percent. The XRT, the SPDR S&P Retail ETF, lost 2.89 percent.

Gold futures (/GC) for February delivery settled 1251.1, up 4.2. Silver futures (/SI) for March delivery settled at 20.385, up 0.162. Copper futures (/HG) for March delivery settled 3.3465, up 0.0050 points. Light sweet crude futures (/CL)for February delivery settled at 91.80, down 0.92 points.

Treasury yields dropped as treasuries climbed. The yield on the 10-year ended the day at 2.83 percent, below its yield the day before the taper was announced. The yield on the 30-year ended the day at 3.767, also below the yield the day the taper was announced.

Monday's Developments

Asian bourses turned in mixed performances last night. The Nikkei 225 was closed for a holiday. The Hang Seng gained 0.19 percent, but the Straits Times lost 0.27 percent. China's Shanghai Composite declined 0.19 percent.

European bourses gained, with big banks helping to boost those indices. In Basel, Switzerland, global regulators have bowed to pressure to loosen the standard--the leverage ratio--that dictates the ratio of banks' capital to their total assets without adjustment. Some of that pressure reportedly came from U.S. banks such as Citigroup and Bank of America. In the U.S., regulators are waiting on Basel III before deciding if they'll use the Basel definitions or define the regulations differently. Those U.S. banks have a reason for wanting the Basel standards loosened. Other measures were loosened, too, including the degree to which off-balance sheet exposures are incorporated into the balance sheet and then into the calculation of the ratio.

The FTSE 100 gained 0.26 percent; the DAX, 0.39 percent; and the CAC 40, 0.30 percent. Spain's IBEX 35 gained 0.73 percent, and Italy's FTSE MIB, 0.73 percent.

Today's U.S. release schedule was light, but Bank of America reportedly added its take on the economy. The firm revised its estimate of fourth quarter GDP growth higher, to 3.5 percent from the prior 2.1 percent. The firm also trimmed its estimate of first quarter growth to 2.3 percent.

Moody's Weekly Business Confidence Survey stayed steady, slipping from last week's record 38.8 to 38.7. The summary was as glowing as it's been for the last month, with "no discernible blemishes" in a report that's "consistent with an economy . . . expanding well above its potential."

Atlanta Federal Reserve Bank President Dennis Lockhart spoke at 12:40 PM in Atlanta, discussing "The Limits of U.S. Monetary Policy." Lockhart is not a voting member in 2014. He may have surprised some market watchers when he endorsed the trimming back of asset buying and sounded reasonably optimistic that the economy's growth will increase next year to 2.5-3.0 percent, and inflation will gradually increase. However, he still believes that it's appropriate for Fed policy to remain accommodative due to the condition of the labor market and some signs of possible disinflation, signs he thought "worrisome."

At 2:00 pm EST, the Department of the Treasury released the latest Federal Budget Balance, expected to climb to a surfeit of 44.3B from the prior deficit of 135.2B. The government reported a surplus of $53 billion. Almost $40 billion of that are payments from Fannie Mae and Freddie Mac, with their payments increasing $34 billion since December 2012.

Fannie Mae and Freddie Mac required $187.5 billion in U.S. aid. They have returned $185.2 billion. Bloomberg counsels that this is tallied as an almost 80 percent return on investment, not as repayment.

That $53 billion surplus is a record December budget surplus, Bloomberg reported. A year ago, the deficit was $1.19 billion. Due to increased tax revenue and a strengthening economy, revenue last month was $283.2 billion as compared to $269.5 billion in December 2012. Spending was $230 billion as compared to $270.7 billion in December 2012.

Geopolitical developments of note included an announcement by Ransquawk that Iran and six other nations have made progress in an agreement meant to ease sanctions in return for restraints on Iran's nuclear program. Progress came in the form of technical hurdles that had been resolved, and this appears to be progress after the late-week problems incurred when Iran separately negotiated an "oil for goods" swap with Russia. As Jim Brown discussed in the Oil Slick newsletter yesterday, the P5+1 agreement being negotiated pertains to a six-month deal that is meant to allow Iran some relief from sanctions while the countries involved negotiate a broader and longer-ranging deal.

Story stocks today include Lululemon (LULU, 49.70, down 9.90 or 16.61 percent) and Express (EXPR, 18.15, down 0.87 or 4.57 percent). Both companies lowered guidance. LULU lowered estimate ranges for its EPS to $0.71-0.83 from the prior $0.78-0.80 and revenue to $513-418 million from the prior $535-540 million. Consensus had been for an EPS of $0.79 per share on revenue of $541 million. The company also expects declining same-store sales.

Mentioning weak holiday traffic and resulting steep discounts, EXPR lowered guidance for the fourth quarter and FY2013. The CEO also mentioned disappointing January traffic to date. The earnings range for the fourth quarter was reduced to $0.57-0.61 per diluted share against previous guidance of $0.66-0.71 per diluted share. For the full year, net income is now expected to range from $1.37 to $1.41 per diluted share instead of the prior $1.46 to $1.51 per diluted share.

After the close, outdoor apparel maker Wolverine Worldwide Inc. (WWW, 32.82, down 0.70 or 2.09 percent) joined the list of retailers who guided forecasts lower. The stock was last at 32.02, down 0.80 or 2.44 percent from the day's close.

SodaStream (SODA, 36.94, down 12.95 or 25.96 percent) also lowered guidance in its preliminary results for FY2013. The company develops, manufactures and sells home beverage carbonation systems.

Juniper Networks (JNPR, 25.32, up 1.78 or 7.56 percent) was one of the gainers today, and it gained on quadruple the average daily volume. Investor Elliott Management has targeted the company for a plan to increase its share price, streamline its business operations, and reduce expenses. Not everyone endorsed the plan, and some described it as "vague."

Disney (DIS, 72.37, down 2.12 or 2.81 percent) dropped despite good news about its film Frozen. The animated film lead the international box office last weekend, has garnered more than $712 million in sales globally, and hasn't even opened in China yet.

McKesson (MCK, 167.14, down 8.30 or 4.73 percent), deliverer of pharmaceuticals, medical supplies and healthcare information technologies, dropped after announcing that it was not able to complete the conditions necessary for its planned buyout of German pharmaceutical distributor Celesio. Not enough of Celesio's shareholders wanted the deal.

Rumors circulate that Apple's (AAPL, 535.73, up 2.79 or 0.52 percent) China sales may be disappointing. Several sources are reported that Cleveland Research had compiled the research showing disappointing orders, but I could not confirm the information since some sources are reporting this news as an unconfirmed rumor and others are reporting it as news. Facts aren't always confirmed these days, so are those sources reporting it as news just less cautious about confirming rumors? I would not normal detail a rumor in this space, but since so many sources are reporting it, I felt it incumbent to warn that this perhaps-true-perhaps-not rumor began by a rumor by one source and then was picked up by other sources.

Gilead Sciences (GILD, 73.14, down 1.73 or 2.31 percent) headed lower today. The company said that the FDA will review its new drug application for a treatment for a form of non-Hodgkin's lymphoma. The company was also presenting at the J.P. Morgan Healthcare Conference, and perhaps something said or not said there impacted the stock's price.

Merck climbed today. A preliminary review of Merck & Co.'s (MRK, 53.12, up 3.24 or 6.50 percent) blood-clot preventing drug vorapaxar will likely result in approval, some experts conclude, but the recommendation to approve or not will not come for at least two days when medical experts meet. The company also initiated the licensing process for an investigational immunotherapy drug meant to treat patients with advanced melanoma.

Perhaps soon I can stop reporting on whether Men's Wearhouse (MW, 50.39, down 0.69 or 1.35 percent) is trying to buy Jos. A. Bank (JOSB, 56.41, up 0.40 or 0.71 percent) or vice versa in these Monday reports, but that time has not yet come. Eminence Capital, a 4.9 percent shareholder in JOSB, said today that it supports MW's purchase of JOSB and wants JOSB to engage in talks with MW. It has apparently brought suit against the company.

Goldman Sachs raised Twitter's (TWTR, 57.82, up 0.82 or 1.44 percent) price target to $65 from the prior $46. Be careful if you're thinking about a long TWTR trade, however, as its chart looks a bit dangerous. An argument could be made for a drop closer to that original $46 target as well as to a retest of last month's $74.73 high.

Japanese drinks maker Suntory Holdings will buy Beam (BEAM, 83.42, up 16.45 or 24.56 percent) for $83.50 a share, with BEAM closing at $66.97 on Friday. BEAM manufactures and sells distilled spirits internationally, and the two companies had already been distributing each other's products. Bernstein Liebhard LLP has already announced an shareholder investigation into the acquisition plan.

Late news today noted that Charter Communications (CHTR, 134.22, down 2.20 or 1.61 percent) has made an offer to buy Time Warner Cable Inc. (TWC, 132.40, down 0.96 or 0.72 percent), with the offer at about $132.50 a share. The offer is a combined cash/stock offer, with Time Warner shareholders receiving $83 cash per share and $49.50 in Charter stock. As this report was sent for publication, Time Warner has not yet received a response considered serious. CHTR was last at 134.22, up 2.32 or 1.73 percent from the day's close. TWC was last at 133.42, up 1.092 or 0.77 percent above the day's close.

Google (GOOG, 1,122.98, down 7.20 or 0.64 percent) was climbing off the day's close as this report was prepared on news that it would buy Nest Labs for $3.2 billion. Nest Labs is owned by former AAPL engineers and makes smart thermostats, smoke and carbon monoxide detectors. GOOG may be seeking the expertise of engineer owners who designed the first 18 generations of the iPod and the first three generations of the iPhone and not those detectors. Some market watchers were wondering what happens with GOOG can audit our thermostats to determine energy usage. Nest assured market participants that its privacy policy would limit the use of gathered data. As this report was prepared, GOOG was last up 5.51 or 0.49 percent off the day's close.

Wendy's (WEN, 8.89, up 0.54 or 6.40 percent) reported preliminary results today. The company reported strong second-half same-restaurant sales growth due the company's promotions. Based on preliminary unaudited results, the company noted same-restaurant sales growth of 3.1 percent in company-owned stores in North America and 2.8 percent in franchise-owned stores in the same region. Margins increased in the mid double digits. EPS expectations for the quarter, excluding some items, are now revised to $0.10-0.11 per share from the prior $0.06 consensus. Projected revenue of $592.4 million was below estimates, however, and lower than the year-ago $629.9 million. The company said the drop was anticipated and was due to cutting back the number of company-operated restaurants in an optimization program. For FY2014, the company revised its EPS expectation, excluding some items, to $0.34-0.36 per share from the prior $0.29 consensus.

The company also announced that it would repurchase up to 275 million in common stock. It will pay $8.50-9.25 per share in a Dutch auction procedure.

Let's look at daily charts.

Charts

Those new to my Monday Wraps might find the following paragraphs useful when interpreting my charts. Those who have read the Wraps can skip straight to the charts. I set up nested Keltner channels on my charts. It's a run-of-the-mill channeling system like the more familiar Bollinger Bands. As with those more familiar BB's, channel boundaries are often targets for upside or downside moves. They also mark levels where prices might find support or resistance on closes. When several channel lines converge, that potential resistance or support might appear stronger, just as it would if 20-, 50- and 100-sma's all converge in one spot.

For the benefit of subscribers, I mark potential upside and downside target/support/resistance levels with rectangles, usually green for upside and red for downside. Orange rectangles are sometimes used when the darker-colored ones would not allow for a clear examination of the next target. From now on, I will mention the nearest potential support or resistance level in the discussion on the chart, but not the further-out ones. They can be located on the charts if price breaks through the nearest levels on consistent daily closes. If an interpretation such as "support levels appear stronger than resistance, so up looks more likely than down" is possible, I'll tell you. Often we traders must be able to defend our trade against a move in either direction.

As with any type of potential support or resistance, those with profits should be protective of those profits as support or resistance is tested. If prices find support and climb, look to the next higher rectangle, even one just broken through, as potential resistance. Do the reverse when resistance is breached. Hopefully, this format provides you with the information you need without requiring all night to read as happens when I list each potential support or resistance level individually.

Annotated Daily Chart of the SPX:

Last week, the SPX climbed, but it climbed with a series of small-bodied candles that left spiky candle shadows above and below the candle body. That kind of action can mean that bulls and bears are fighting it out, and, despite the gain, neither is winning strongly over the other. Despite the gain, that kind of action wasn't a sign of strength. The SPX needs to sustain daily closes above about 1,849 to encourage bulls that it's safe to pile on again. Because the SPX would have outrun all its upside targets once it sustains daily closes above 1,849, no new upside target zones are suggested on the daily or weekly charts if it indeed breaks out to the upside. That doesn't mean that it can't continue to climb, but only that we won't have a specific target or know where the next resistance could kick in.

If the SPX is closing between about 1,824-1,849, bulls and bears are still battling it out, without a clear next direction determined, but that wasn't what happened today. Sustained daily closes below about 1,824 suggest that bears might be capable of driving prices down to the next downside target, likely to be driven to 1,800-1,814 by the time it could be tested. That target is tentatively set by today's close and the SPX dropped close to the next lower target.

Was today's drop close enough to the target? We don't know yet. If the SPX is driven deeper into that 1,800-1,814 zone, bears should be aware of bounce potential, especially if the round-number 1,800 level is approached.

If the SPX bounces, either before or after a test of deeper support, bulls should be aware that the 1,840 zone might be strong resistance if retested on a bounce. Potentially strong resistance would begin to kick in as early as 1,824 but be particularly strong from about 1,832-1,842.

If the SPX should sustain daily closes beneath about 1,800, a potential next target is set near 1,745-1,769.

Annotated Daily Chart of the Dow:

The Dow would need to sustain daily closes above its December closing high of 16,576.66 before bulls could consider this index breaking out to the upside again. If the Dow should do that, it's outrunning upside targets all the way up through the weekly chart, so there are no new targets set by the Keltner channeling system I employ. As with the SPX, that doesn't mean that it couldn't climb higher once it broke out, but it does mean that this system doesn't set a target for us to watch.

Daily closes from about 16,371 up through that 16,577-ish level would closes within a chop zone. They wouldn't tell us much about the ultimate direction, but the Dow settled that matter by closing beneath that zone today.

Sustained daily closes beneath about 16,371 set a potential downside target of 16,000-16,178. That's an unfortunately wide target zone, but various historical, swing highs or lows, psychologically important support and Keltner support levels layer through that zone. It's difficult to predict which would hold on a sharp decline. Daily closes beneath about 16,371 maintain that downside target.

If support anywhere in that 16,000-16,178 zone is firm enough to bounce the Dow back again or if it heads straight up from today's close without testing deeper support, note that resistance near 16,400 will potentially have firmed up and might present rollover potential if retested. That resistance on daily closes might be particularly strong near 16,400-16,455.

If the Dow produces consistent daily closes below 16,000, it sets another, lower potential target. It's marked on the chart.

Annotated Daily Chart of the NDX:

The NDX would need to sustain daily closes above its December daily closing high of 3,592.00 before it could be considered breaking out to the upside again. As has been true of the other indices, if it did so, it will have outrun the potential upside Keltner targets all the way up through the weekly chart on the Keltner channeling system I watch. No new targets are suggested. The NDX could of course continue to climb without a target: we just wouldn't know where to set profit-protecting plans in motion if we were in bullish trades. Following such trades higher with the stops might be a possibility.

Daily closes within that yellow-orange rectangle suggested coiling behavior, without a prediction as to the next direction, but that's not what the NDX did today. It fell below that support and headed straight down to its next potential downside target, from about 3,470-3,513. The gain at the end of the day left a small candle wick or shadow below current prices and could indicate that the NDX will attempt to bounce, with the accent on "attempt" for the time being. If the NDX should bounce, either immediately or after a deeper drop into that 3,470-3,513 potential support zone, resistance near 3,550 may have firmed and might present rollover potential. Bulls should be cautious if there's a retest of today's broken support.

Consistent daily closes beneath about 3,470 in turn set a lower potential target, marked on the chart.

Annotated Daily Chart of the RUT:

The RUT has been producing small-bodied candles, but they have at least been climbing along the spine of a slightly rising (red) 9-ema. Until today. The RUT had significant-appearing Keltner resistance on daily closes overhead, however, and that resistance had been relevant on daily closes over the last week. The RUT would need to sustain daily closes above about 1,176 before we could consider it breaking out to the upside. As was true of all the other indices covered here, such a breakout would run the RUT up past all potential upside targets marked on its daily and weekly charts, with no further potential upside targets projected. A lack of an upside target doesn't mean that the RUT can't climb: we just have no idea where to set bullish profit-protecting plans in place.

We didn't have to worry about upside potential today, however. When the RUT sustained a daily close beneath 1,149, it set a potential downside target near 1,126-1,140. It came close to hitting the target this afternoon. Did it come close enough?

The lower candle shadow or wick indicates that some buyers thought so, but we don't know yet whether those were true buyers or shorts nervous about holding overnight as the earnings season heats up. A dip deeper into the support zone would not feel good for those in bullish trades, but it wouldn't undo the RUT's pattern over the last few months if support catches and the RUT bounces. In case of such a bounce immediately or after a deeper support test, resistance near 1,155 and then 1,170 may have firmed and might each present strong rollover potential.

Sustained daily closes beneath about 1,126 would change the RUT's bullish pattern over the last months, however. Such action would suggest a further drop, perhaps to 1,000 or perhaps as low as 1,080-1,093.

Annotated Daily Chart of the $DJT:

The Dow Jones Transports sometimes provides a heads-up look at the health of the economy, so that it's a good indicator index to watch. The transports had been outperforming many of the other indices, but today it produced a bearish engulfing candle. What's that telling us? We don't know yet because the transports can undo bearish signals, but this development should be watched. Bears would like to see the Dow Jones Transports head lower tomorrow and confirm the bearishness.

Bulls could point out that the transports stopped the decline near last week's breakout level, so they could reason that the DJT merely retreated to retest the breakout level from last week. If bullish wishes are to be honored, the DJT needs to bounce convincingly now that it's created that bearish candle. Remember that this index is not optionable, so we watch it for information and not for trading opportunities.

The VIX, an indicator index we often watch, too, hit that 12-ish level that has been such support for the last ten months, with an intraday low of 11.82. Then the VIX bounced hard, closing back above 13. For newbies, the volatility indices such as the VIX tend to move in opposition to equities, although they're not always great market-timing tools.

While the VIX can and has in the past dipped below 12 on daily closes and done so for long periods, this approach to 12 and bounce today warns equity bulls to be protective of their profits. Keep both the transports and the VIX on the radar screen. Equity bulls, especially in the SPX, OEX and Dow, don't want to see the transports barrel lower while the VIX holds its above-13 level and then keeps climbing. Equity bears don't want to see the transports keep hitting new daily highs while the VIX steadies or declines.

Tomorrow's Economic and Earnings Releases

This week's important economic events are carried forward from Jim Brown's weekend Wrap.

Philadelphia Federal Reserve Bank President Charles Plosser's speech at 12:45 pm tomorrow will tackle his view of the country's economic outlook. Plosser will be a voting member in 2014.

Companies reporting earnings tomorrow include JPMorgan Chase & Co (JPM, 7:00 AM EST) and Wells Fargo & Co (WFC, 8:00 AM EST).

What about Tomorrow on the Intraday Charts?

Annotated 30-Minute Chart of the SPX:

The SPX fell through several layers of support on the 30-minute chart, and, by the close, has set a tentative short-term downside target of 1,810-1,813. Prices very nearly reached that target.

That potential downside target would be erased by consistent 30-minute closes above about 1,827-1,828. If the SPX bounces first thing tomorrow, as is possible, potential resistance on 30-minute closes could kick in as early as 1,823-1,828. However, if the SPX gaps above 1,828 and stays there or sustains 30-minute closes above there on a slower move, it sets a next potential upside target from about 1,832-1,836. Higher potential upside targets are also marked in case the SPX sees a rabid relief rally, but remember that such a rally would nudge those potential targets higher. Keltner targets are dynamic and will be moved in the direction of a strong price movement, so higher on a rally.

If we talk about "nudging" Keltner lines, we must also recognize that a strong downdraft will nudge the lowest target lower, too, and of course all targets can be overrun.

Annotated 30-Minute Chart of the Dow:

As of the close, the Dow has set a potential short-term downside target of about 16,185-16,225. As was the case with the SPX, prices very nearly reached that target before the end-of-the-day bounce. The Dow would continue to look vulnerable to that target until it begins printing consistent 30-minute closes above about 16,338. Unless the Dow gaps above about 16,338 tomorrow morning and stays there, however, watch for potentially strong resistance to kick in anywhere from 16,300-16,338. There's rollover potential in that zone.

If the Dow does manage sustained 30-minute closes above 16,338, it sets a potential next upside target of about 16,392-16,433. Two higher potential upside targets are also marked, but remember that a strong rally will nudge those zones higher, too.

If we talk about "nudging" Keltner lines, we must also recognize that a strong downdraft will nudge the lowest target lower, too, and of course all targets can be overrun.

Annotated 30-Minute Chart of the NDX:

As of the close, the NDX had set a potential short-term downside target of 3,494-3,501, with the NDX having reached the upper portion of that downside target. Then the NDX rebounded off its low. Was that low enough of a low? Was the target, as inexact as these can be, reached? If the NDX rallies tomorrow morning, watch for potential resistance on 30-minute closes at about 3,523-3,535. There could be strong rollover potential there, rolling the NDX back down to retest today's low.

If the NDX gaps above about 3,535 tomorrow morning or can sustain 30-minute closes above it after a rally, it sets a new potential short-term upside target from about 3,545-3,557, where resistance on 30-minute closes might kick in again. I've marked two higher potential short-term targets, but remember that a strong rally will nudge them higher.

If we talk about "nudging" Keltner lines, we must also recognize that a strong downdraft will nudge the lowest target lower, too, and of course all targets can be overrun.

Annotated 30-Minute Chart of the Russell 2000:

By today's close the RUT had set a potential short-term downside target of about 1,137-1141. However, the RUT had approached that target and then bounced strongly into the close. At the close, the RUT had nearly reached its next potentially strong resistance level on 30-minute closes, from about 1,149-1,152. This could be strong resistance on a retest, rolling the RUT back down into a retest of today's low.

If the RUT gaps above about 1,152, which it could do, or if it climbs above that level and maintains 30-minute closes above it, it sets a new potential short-term upside target at about 1,155-1,158. Resistance on 30-minute closes could be strong at that level. I've noted two additional potential upside targets, but remember that they'll be nudged higher on a strong rally.

If we talk about "nudging" Keltner lines, we must also recognize that a strong downdraft will nudge the lowest target lower, too, and of course all targets can be overrun.

What's next? I wasn't impressed with last week's performances on the indices, not when I saw small-bodied daily candles with spiky upper and lower shadows on the SPX. I wasn't impressed when I saw increasing intraday volatility again on the RUT without that volatility breaking the index to new highs. When it appears that a lot of effort is being expended to keep prices at certain levels, there's some selling into any gains. Bulls are going to tire after a while if their results aren't rewarded.

Bulls did tire. We've had some new potential downside targets set today on both the daily charts and the 30-minute charts, although most indices came close to meeting those short-term targets on their 30-minute charts.

If the Dow Jones Transports barrels higher again, negating the bearish signal given today, the possibility exists that the pullback was a shallow one, soon concluded.

Charts are producing many signs that we need to pay attention to the markets. I'm seeing lots of evidence that it's time for a deeper pullback down to the next marked support levels, but I'm not getting ironclad proof yet that's going to happen before a bounce to retest today's breakdown levels. The bounce might come before the targets set today are met, if they are met.

On the daily charts, indices still look ready to bump down to their next support levels, but the intraday charts suggest the possibility, at least, that such a deeper support test might as easily come after a bounce as before one. When so much depends on how the financials report tomorrow morning and how those retail sales measure, it's difficult to assign a greater probability to bounce-first or drop-first scenarios.

Keep the possibility of deeper declines in mind, even if the indices should bounce or steady tomorrow. Also watch those upside breakout levels marked on the chart in case today's pullback was the only pullback we get. The charts suggest the possibility of further declines, but the charts are not foolproof, and the RUT's bounce off this afternoon's low was strong.

Watch the RUT, the DJT and the VIX.

Linda Piazza

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