WALL STREET : Bears Gatecrash Bull's Party

Wall Street Dips Amid Turmoil In Libya

Wall Street marked the two-year anniversary of the bull market with a whimper, edging lower on continuing concern over the turmoil in north Africa and the Middle East and some disappointing earnings forecasts in the technology sector.

Stocks dipped Wednesday as crude oil prices hovered near $104 a barrel, continuing a three-week run of high prices that economists say could slow the economic recovery.Stocks hit 12-year lows on March 9, 2009, dragged down by the financial crisis. The S&P 500 index, the benchmark for most U.S. mutual funds, has had a total return of 102 percent since then, including dividends. It was the best two-year period for the index since 1955, according to Standard & Poor's.

The Dow Jones Industrial Average (DJIA) made a few brief forays north of the breakeven line today, due in part to a rosy forecast from component IBM (IBM), but not all of the tech sector news was so upbeat. Texas Instruments (TXN) provided some fodder for the bears after lowering the top end of its first-quarter earnings and revenue forecast, while Finisar (FNSR) fell off a proverbial cliff -- and took its sector peers along for the ride -- after predicting a weak fourth-quarter performance. Against this uneasy backdrop, traders all but shrugged off an upbeat report on wholesale inventories. The S&P 500 Index (SPX) and Nasdaq Composite (COMP) spent most of the day wallowing in red ink, though the major market indexes pared the worst of their losses by the close.

The Dow Jones Industrial Average (DJIA – 12,213.09) traded in a 101-point range today, but settled for a barely perceptible loss of 1.3 points, or 0.01%. Seventeen of the Dow's 30 components ended lower, led by Caterpillar (CAT) and Chevron (CVX), while IBM paced the 13 advancing blue chips. Meanwhile, General Electric (GE) exemplified the session's sideways theme by eking out a gain of just one penny. The Dow didn't make much progress on the charts today, but did maintain a foothold above its 10-day and 20-day moving averages.

The S&P 500 Index (SPX – 1,320.02) spent all day trying to fight its way back toward breakeven, before closing on a deficit of 1.8 points, or 0.1%. The SPX remains sandwiched between its own 10-day and 20-day trendlines. Finally, the Nasdaq Composite (COMP – 2,751.72) brought up the rear, shedding 14.1 points, or 0.5%. The COMP finished the session beneath its 10-day and 20-day moving averages, and is now in danger of notching a weekly close beneath its 10-week trendline for the first time since Aug. 27, 2010.

Oil Slips 0.64%; Mantain Above $104 pb
Despite continuing turmoil in Libya, crude futures actually swallowed a modest loss today. The recently red-hot commodity came under pressure after the Energy Information Administration (EIA) reported a larger-than-forecast rise of 2.5 million barrels of crude last week, with supplies at the Cushing, Okla. storage hub for NYMEX futures swelling to a new record high of 40.3 million barrels. With concerns about a looming supply crunch temporarily eased, crude oil for April delivery ended the day off 64 cents, or 0.6%, at $104.38 per barrel.

On a technical note, the low-range close sets the stage for a steady to lower opening when Thursday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If April extends this winter's rally, weekly resistance crossing at 110.45 is the next upside target. Closes below the 20-day moving average crossing at 96.02 would confirm that a short-term top has been posted. First resistance is Monday's high crossing at 106.95. Second resistance is weekly resistance crossing at 110.45. First support is the 10-day moving average crossing at 101.51. Second support is the 20-day moving average crossing at 96.02.

Gold Incited By Portugese Bond & Oil Nations Strife

On the other hand, gold futures managed a healthy gain today. A lackluster reception for Portugal's bond offering incited some safe-haven interest in the precious metal, as did ongoing strife in oil-rich nations. By the close, gold for April delivery added $2.40, or 0.2%, to end at $1,429.60 per ounce.

Technically, Stochastics and the RSI are overbought and are turning neutral to bearish hinting that a short-term top might be in or is near. Closes below the 20-day moving average crossing at 1398.40 would confirm that a short-term top has been posted. Multiple closes above December's high crossing at 1434.00 would renew this winter's rally into uncharted territory. First resistance is Monday's high crossing at 1445.70. First support is the 10-day moving average crossing at 1424.00. Second support is the 20-day moving average crossing at 1401.50.

TECHNICAL ANALYSIS
Dow Jones Industrial Average
The Dow closed slightly lower on Wednesday and the mid-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near-term.

If the Dow extends the rally off the reaction low, February's high crossing at 12,391 is the next upside target. Closes below the reaction low crossing at 11,983 are needed to confirm that a short-term top has been posted.

First resistance is February's high crossing at 12,391.

Second resistance is the January 2008 high on the weekly continuation chart crossing at 12,767. First support is the reaction low crossing at 11,983.

Second support is the reaction low crossing at 11,803.

HAPPY TRADING