WALL STREET : Stocks Slide as Japanese Crisis Rattle Investors

DJIA Dips 137 points Off Low
A third explosion at a Japanese nuclear power plant prompted a warning of "substantial amounts of radiation" leakage, which sent traders around the world into "sell" mode. On pace with their comrades in Asia and Europe, U.S. stocks spiraled into the red at the sound of the opening bell, with nuclear-related and Japan-exposed equities once again blazing the trail lower. As a result of the widespread panic, volume skyrocketed on the CBOE Market Volatility Index (VIX) – often dubbed the market's "fear barometer" – which took out its closely watched 200-day moving average for just the second time since early October.

However, the Federal Open Market Committee's (FOMC) vow to maintain the status quo of rock-bottom interest rates, as well as the policymakers' comments about a gradually improving economic and employment backdrop, helped stocks chip away at their deficits in afternoon trading. Nevertheless, although the damage could've been worse, all three major market indexes once again swallowed significant losses, with each surrendering more than 1.1%.

The Dow Jones Industrial Average (DJIA – 11,855.42) was down more than 200 points in early trading, but pared its loss to 137.7 points, or 1.2%. However, Chevron Corp. (CVX) was the lone blue chip to buck the trend, while tech concerns Intel Corp. (INTC) and Cisco Systems (CSCO) led the 29 declining equities with losses of 3.1% and 2.6%, respectively. While the index is now on pace to end the week beneath its 10-week trendline for the first time since late August, the Dow seemed to have found a floor in the 11,700 region, which is also home to its 20-week trendline.

The S&P 500 Index (SPX – 1,281.87) also chipped away at its deficit by the close, but still ended with a loss of 14.5 points, or 1.1%. Finally, the Nasdaq Composite (COMP – 2,667.33) swallowed a loss of 33.6 points, or 1.3%, surrendering its foothold atop the 2,700 level. What's more, the tech-rich COMP is now in danger of ending the week beneath both its 10-week and 20-week trendlines for the first time since Aug. 27.

Oil falls 3.5% as Japanese nuclear crisis intensifies

Crude futures retreated today, as a nuclear catastrophe in Japan exacerbated fears of ebbing demand in the world's third-largest oil consumer. In the same vein, the International Energy Agency (IEA) warned that global demand will likely be lower than previously forecast this year, cutting its per-day projections by 10,000 barrels.

Japanese Prime Minister Naoto Kan warned of a “substantial” radiation leak as the effects of last Friday’s earthquake and tsunami grew grimmer.

A new blast and fire rocked a nuclear plant where workers were already trying to avert meltdowns in three reactors.

On the other hand, Bahrain declared martial law a day after Saudi Arabian forces arrived in the kingdom, escalating concerns about supply disruptions. By the close, April-dated crude oil futures shed $3.63, or 3.5%, to end at $97.56 per barrel. In electronic trading, the front-month contract deepened its slide in the wake of the Fed's monetary statement.

That was oil’s lowest settlement since Feb. 28 and its largest one-day percentage drop since Oct. 19. Japan is the world’s No. 2 oil importer after the U.S. and the third largest oil consumer after the U.S. and China.

TECHNICAL ANALYSIS
Dow Jones Industrial Average
The Dow closed lower on Tuesday as it extends the decline off February's high. Rising concerns over the impending nuclear disaster in northern Japan triggered a 10% decline in Japan's stock market and has since spilled over into the rest of the world stock markets. A short covering rally tempered early-session losses and the mid-range close sets the stage for a steady opening on Wednesday.

Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near-term. If the Dow extends this month's decline, the 38% retracement level of the June-February rally crossing at 11,339 is the next downside target. Closes above the 20-day moving average crossing at 12,146 are needed to confirm that a short-term low has been posted.

First resistance is the 10-day moving average crossing at 12,089.

Second resistance is the 20-day moving average crossing at 12,146.

First support is today's low crossing at 11,696.

Second support is 38% retracement level of the June-February rally crossing at 11,339.

HAPPY TRADING