More Downside or Pure See-saw

WEEKLY MARKET ANALYSIS

Stocks opened modestly higher but the advance reversed and accelerated during the day into the close. The Dow Jones Industrial Average ETF DIA was down 0 points on the day and closed at 246. For the S&P 500, there is support near 2597 and 2556. Resistance levels are currently at 2677 and 2718.

GLOBAL ASSETS UPDATE

TWELVE SECTOR ANALYSIS

VOLATILITY UPDATE

On Wall Street, 10 of the 12 major market sectors are seeing red today. The biggest losers are Materials (XLB), Energy (XLE), and Transportation (XTN). The strongest sector today has been Utilities (XLU) which has gone up 0.7%.

The CBOE Volatility Index (VIX) is down $-1.33 going from $20.85 to $19.52 today. The ratio of puts to calls for the current at-the-money strike of $20 is below average which means that traders are favoring Calls over Puts currently.

MARKET HEAT

A NASDAQ stock with unusually high volume today is eHealth, Inc. (EHTH). On the AMEX Seaboard Corp (SEB) has had significant interest, and on the NYSE K12 Inc. (LRN) has had unusual volume.

The biggest mover out of other high-volume stocks is K12 Inc. (LRN) which has moved up over 15% recently on volume of over 2 million shares. The chart below shows the performance of LRN over the last year. K12 Inc. (K12) is a technology-based education company.

DARWIN K12 INC. FORECAST

The performance of K12 Inc. (LRN) will be worth watching in the near term for a number of reasons. The forecast for the coming week on LRN is for the price to go up. The correlation of LRN to the S&P 500 recently has been 0.6 which is a moderate positive correlation. Key levels to watch for LRN are downside support at both the $23 and $18 price points.

Trade smart,

Paul "Bulldog" Hudson, Chief Investment Officer
Darwin Investing Network