Inverted Hammer Bullish Harami at 50 DMA

DJIA + 86.90, +1.15% SP500 + 10.33, +1.31% NASDAQ Comp. + 26.79, +1.78% Russell 2000 + 6.78, +1.63% Exchange NYSE NASD Advancing 2,819 1,901 Declining 912 886 Oil $49.90 +$1.49 Gold $922.60 +$7.10 SOX 230.91 +1.46 VIX 44.14 -1.40 The VIX moved down and did confirm the move up in the SPX on Tuesday. Strongest Sectors: XLF +5.51%...XLK +1.89%...XLU +1.03% Weakest Sectors: XLE -0.85%...XLP -0.19%...XLV +0.37% The Financial sector which was the weakest sector on Monday rallied leading the broad market higher on Tuesday. XLF rose 5.51% Strong financial stocks that gained more than 5.51% on Tuesday included: BAC, SPG, STT, AFL, PNC, C, RF, BK, KEY, SCHW, JPM, WFC, AXP, IVZ, USB, MET, PRU, GS and ETF’s FAS and UYG. Sector Watch Up Trending: Sideways: XLE, XLY, XLV, XLK, XLB Down Trending: XLF, XLP, XLI, XLU Today the SPX formed an inverted hammer/bullish harami. Both are trend reversal patterns that require confirmation...a close above the body of the inverted hammer. From a short term traders perspective that confirmation is impportant. The disappointment in Tuesday's rally was the selloff at the end of the day that formed the upper shadow of the inverted hammer. While buyers had control for the day, sellers had control and the end of the day. (click on image to enlarge) On Wednesday if the day starts with sellers in control, watch the key support areas of: 787 - 790 - Monday's close & Tuesday's open 779 - Monday's low. These are areas of short term importance. If price action breaks below this area 766 - 772 is the next area of support. Remember if price breaks below an area of support it is likely to fall to the next suppor level. If short term support holds look for a rally and confirmation of the inverted hammer. The SPX finished March with its best month from open to close and from low to close in over five years. Perhaps even more telling about what we might expect is the piercing line pattern on the monthly 5 year chart. The Piercing Line pattern is a bullish reversal pattern. With the strong down trend of the past 18 months the March candle is by far the most bullish candle in that time frame. However one month is not a trend, so the month of April becomes very important to see if the SPX continues to move higher or if the SPX simply has a trend change from down to sideways. (click on image to enlarge) Index Commentary The DJIA formed an inverted hammer/bullish harami…closed above 20, 30 and 50 DMA The SPX formed an inverted hammer/bullish harami…closed above 20, 30 and 50 DMA The Nasdaq formed an inverted hammer, closed above the high of the low day…closed above 20, 30 and 50 DMA The RUT formed an inverted hammer/bullish harami…closed above 20, 30 and 50 DMA At the Open on Wednesday SPY – doji SNDA – confirmed hammer rose to horizontal resistance DECK – confirmed hammer CTSH – confirmed hammer CRM – bullish harami NFLX – rose to horizontal resistance GME – rose to horizontal resistance WYNN – bullish harami ILMN – confirmed dragon fly doji SCHN – bullish harami MHS – closed above 30 DMA GILD – closed above 30 DMA Stocks to Watch on Wednesday Leading Stocks: Holding Above 30 DMA BIDU, CLB, BKC, NFLX, DLTR, HANS, ICE, ALGT, DLB, JEC, PWR, VPRT, AMZN, MON, USD, AAPL, CTSH, FLS, JOYG, APEI, AXYS, BAP, CAM, GMCR, GPRO, JCOM, JOSB, MUR, PETS, WMT, ATW, GR, BIIB, SLGN, SWN, SYNA, SNHY, EBAY, GES, SNA, ORCL, WRC, DECK, HDB, PCP, UYG, BLUD, FSLR, GME, ESI, WCG, RIMM, X, BDX, BYI, CBST, EZPW, HLF, MYGN, STRA, MCD Moving Above 30 DMA = 6 AMX, GILD, MHS, WAB NIHD, FAS Moving Below 30 DMA = 3 DV, MOS, RCI Staying Below 30 DMA CHL, JW.A, NTLS, PCLN, ACN, PPD, RBN, ESRX, PSYS, TDG, SPWRA, AMED, GXDX, VAR, PCR, K, AFAM Tuesday’s Action Moving Up: Doji – BIDU, CF, MS, Broke High of Low Day – GOLD, AFAM, CLF, ESRX, INFY, KRE, GS, NDAQ, KBE Bullish Harami – IPI, SCHN Moving Down: Lower High, Lower Low – POT, MOS, X, CNX, NEM Doji – FSLR Higher Low – PCLN, STRA Intermediate Term Market Trend: Neutral – SPX, Nasdaq, RUT Down – DJIA Short Term Market Trend: Neutral