Thursday, April 30, 2009

Shooting Star Thursday...

DJIA - 17.61, -0.22% SP500 - 0.83, -0.10% NASDAQ Comp. + 5.36, +0.31% Russell 2000 - 3.91, -0.80% Exchange NYSE NASD Advancing 2,101 1,384 Declining 1,632 1,395 Oil $51.12 +$0.15 Gold $890.70 -$9.10 SOX 258.54 +6.99 VIX 36.50 +0.42 The VIX moved up and did confirm the move down in the SPX on Thursday. Both indexes were essentially unchanged. Strongest Sectors: XLB +2.80%...XLY +1.70%...XLI +0.37% Weakest Sectors: XLE -1.65%...XLF -1.38%...XLP -0.41% Five of nine Sectors moved higher on Thursday. Materials, Consumer Discretionary, Industrials, Technology and Utilities outperformed the SPX with positive gains. Financial stocks stronger than XLF -1.38% include: SPG, BAC, PRU, MS, AOC, ALL, AXP, GS, ICE, MMC, MET, WFC, STT, SCHW, AFL, IVZ, NTRS, PNC and ETFS UYG and FAS. Leading tech stocks stronger than XLK, +0.29% include: AMAT, TXN, DELL, MA, INTC, ADBE, EMC, YHOO, GOOG, AAPL, T and CSCO. Sector Watch Up Trending: Sideways: XLE, XLY, XLV, XLK, XLB Down Trending: XLF, XLP, XLI, XLU All four indices finished April by forming a higher high and higher low on the daily candle. The Nasdaq made a new high close while closing below its high and with a net gain for the day. The SPX, RUT and DJIA finished slightly lower for the day. The SOX gained +2.78% and closed above its 200 DMA for the first time since June 8, 2008. Apparently the pull back from the intraday highs is being attributed to the announcement today that Chrysler will file for bankruptcy. If, this is accurate and this news event is the cause of the pull back, that is good news as its total economic significance is likely to be nothing more than a small ripple. All four indices finished positive for the second straight month. The Nasdaq is positive for 2009 and the RUT is near breakeven. Take a look at the monthly chart for the indices...do you see anything different about March and April compared with the past year? (click image to enlarge) Index Commentary The DJIA formed a shooting star candle…volume was near average at 341 million shares…closed above its 20, 30 and 50 DMA. The SPX formed a shooting star and closed just below 875 resistance…closed above its 20, 30 and 50 DMA. The Nasdaq formed a shooting star like candle, again making a new high close for 2009…stayed above horizontal resistance of 1682…came within five points of its 200 DMA before pulling back…short term chart price target is 1,765…closed above its 20, 30 and 50 DMA. The RUT formed a shooting star like candle…closed above horizontal resistance of the past two weeks, late January and early February…new chart target 606 during next 8+ weeks…within 33 points of 2009 high …closed above its 20, 30 and 50 DMA At the Open on Friday SPY – black spinning top ALGT – spinning top SCHN – horizontal breakout ICE – spinning top DECK – spinning top SNDA – black candle ADBE – spinning top at 200 DMA EBAY – black spinning top in pennant GME – spinning top close below 200 DMA SHLD – white candle bounce at 200 DMA WYNN – shooting star WHR – doji LEAP – spinning top ISRG – dark cloud cover DHR – black spinning top DE – white shooting at 200 DMA (click image to enlarge) Stocks to Watch on Friday Leading Stocks Holding Above 30 DMA BIDU, CLB, ICE, ALGT, DLB, PWR, VPRT, AMZN, USD, AAPL, CTSH, AXYS, BAP, CAM, GMCR, JCOM, JOSB, ATW, GR, SYNA, EBAY, GES, SNA, ORCL, WRC, HDB, PCP, UYG, FSLR, GME, WCG, RIMM, X, BYI, CBST, HLF, AMX, MHS, WAB, FAS, AFAM, JW.A, K, RBN, ESRX, PCLN, URE, VAR, PCR, PPD, HANS, SWN, FLS, SNHY, GILD, GXDX, TDG, NIHD, RCI, STRA, CPLA, ACN, AMED, GPRO, NFLX, EZPW, JOYG, MON, MUR, PSYS, SPWRA Moving Above 30 DMA = 1 PETS Moving Below 30 DMA = 1 DLTR Staying Below 30 DMA DECK, JEC, CHL, MCD, BDX, CBST, MYGN, DV, SLGN, TDG, BIIB, MOS, NTLS, WMT, GILD, BKC, APEI, BLUD, ESI, GXDX Intermediate Term Market Trend: Neutral Short Term Market Trend: Up

Futures Pointing to a Higher Open...

BMO - ES +13 and NQ +22 are higher in pre-market trading about 90 minutes before the open pointing to a higher open. If the cash markets open at this level of trading the SPX will break the 875 resistance area. The Nasdaq and RUT already cleared horizontal resistance on Wednesday. Remember the pattern since March 10 has been one to two days of thrust, so don't by surprised if the markets continue higher after Wednesday's push...the breakout of the Nasdaq and the RUT suggest continuation... Here are the indices and their recent horizontal resistance areas... (click image to enlarge) Check out these stocks of interest Thursday morning (see the surprise here)... (click image to enlarge) At the Open on Thursday SPY – white candle ALGT – large white candle in bull flag SCHN – bull flag breakout ICE – white candle confirm inverted hammer at 20 DMA DECK – spinning top support bounce SNDA – large white candle support bounce at 20 DMA ADBE – bull flag break high of low day and horizontal resistance EBAY – white spinning top in pennant GME – spinning top close below 200 DMA SHLD – white spinning top at 200 DMA WYNN – bull flag breakout WHR – breakout after day pull back LEAP – large white candle does not confirm potential bearish harami ISRG – bull flag breakout DHR – bull flag breakout DE – two week ascending triangle

Wednesday, April 29, 2009

Stocks Move Higher...Nasdaq, RUT Breakout...

DJIA + 168.78, +2.11% SP500 + 18.48, +2.16% NASDAQ Comp. + 38.13, +2.28% Russell 2000 + 18.63, +3.94% Exchange NYSE NASD Advancing 3,109 2,125 Declining 634 631 Oil $50.97 +$1.05 Gold $899.80 +$7.00 SOX 251.55 +4.88 VIX 36.08 -1.87 The VIX moved down and did confirm the move up in the SPX on Wednesday. Strongest Sectors: XLF +4.31%...XLI +3.34%...XLE +2.76% Weakest Sectors: XLV +0.37%...XLU +0.74%...XLK +1.12% All nine Sectors moved higher on Wednesday. Financial was again the leading sector. Financial stocks stronger than XLF +4.31% include: MS, IVZ, PRU, C, MET, BK, BAC, ZION, USB, SCHW, AFL, GS, SPG, JPM, TROW, MMC and ETFS UYG and FAS. Leading tech stocks stronger than XLK, +1.12% include: MA, ADBE, DELL, CSCO, HPQ, YHOO, AMT, TXN, ADP, EMC, IBM, GOOG, INTC, QCOM, SYMC, EBAY, MSFT and AMAT. Sector Watch Up Trending: Sideways: XLE, XLY, XLV, XLK, XLB Down Trending: XLF, XLP, XLI, XLU We wrote last night, “…a potential exits for Wednesday to resume the move to the upside. If the indices move up on Wednesday this would be from Tuesday’s higher low compared with April 21, which could provide the support base for the SPX to break above the 875 resistance.” That is what occurred on Wednesday, a break above 875 with a late pull back with the SPX closing at 873. The Nasdaq did close above resistance and made a new high close along with a new 2009 high. Take a look at the chart below and see the Nasdaq’s relative strength. The RUT closed above resistance with a strong move up. The breakout of these two leading indexes suggests a continuation of the current up trend. There will continue to be pause or pull back days, perhaps very similar to what the market has produced since March 10. Take a look at these YTD Index Charts...What do you notice about the Nasdaq and RUT compared with the SPX and DJIA? (click image to enlarge)

Index Commentary The DJIA formed a large white candle…closed at 8,190 horizontal resistance…new high close…volume was below average at 300 million shares…closed above its 20, 30 and 50 DMA. The SPX formed a large white candle that broke above 875 horizontal resistance intraday and closed just below…new high close since Jan 29…closed above its 20, 30 and 50 DMA. The Nasdaq formed a large white candle making a new high close for 2009…broke and closed above horizontal resistance of 1682…short term chart price target is 1,765…closed above its 20, 30 and 50 DMA. The RUT formed a large white candle following Tuesday’s piercing line pattern…broke through horizontal resistance of the past two weeks and late January and early February resistance…new chart target 606 during next 8+ weeks…within 30 points of 2009 high …closed above its 20, 30 and 50 DMA

At the Open on Thursday SPY – white candle ALGT – large white candle in bull flag SCHN – bull flag breakout ICE – white candle confirm inverted hammer at 20 DMA DECK – spinning top support bounce SNDA – large white candle support bounce at 20 DMA ADBE – bull flag break high of low day and horizontal resistance EBAY – white spinning top in pennant GME – spinning top close below 200 DMA SHLD – white spinning top at 200 DMA WYNN – bull flag breakout WHR – breakout after day pull back LEAP – large white candle does not confirm potential bearish harami ISRG – bull flag breakout DHR – bull flag breakout DE – two week ascending triangle

Learn the Discipline We opened 12 new positions in BYI, GR, CAM SYNA, ATW, SNA, AG, ADS, ADBE, ALGT, LEAP and ISRG in the Model Portfolio. We also took a short term SP futures position. Stocks to Watch on Thursday Leading Stocks Holding Above 30 DMA BIDU, CLB, ICE, ALGT, DLB, PWR, VPRT, AMZN, USD, AAPL, CTSH, AXYS, BAP, CAM, GMCR, JCOM, JOSB, ATW, GR, SYNA, EBAY, GES, SNA, ORCL, WRC, HDB, PCP, UYG, FSLR, GME, WCG, RIMM, X, BYI, CBST, HLF, AMX, MHS, WAB, FAS, AFAM, JW.A, K, RBN, ESRX, PCLN, URE, VAR, PCR, PPD, HANS, SWN, FLS, SNHY, GILD, GXDX, TDG, NIHD, RCI, STRA, CPLA, ACN, AMED, DLTR, GPRO, NFLX, EZPW Moving Above 30 DMA = 5 JOYG, MON, MUR, PSYS, SPWRA Moving Below 30 DMA = 1 DECK Staying Below 30 DMA JEC, CHL, MCD, BDX, PETS, CBST, MYGN, DV, SLGN, TDG, BIIB, MOS, NTLS, WMT, GILD, BKC, APEI, BLUD, ESI, GXDX Intermediate Term Market Trend: Neutral Short Term Market Trend: Up

Futures Point to a Higher Open...

SPX is breaking through 875...if the breakout holds...price target becomes 924.43 with a time target of nine trading days... BMO - ES +8 and NQ +11 futures are trading higher in pre-market trading pointing to a higher open. Stocks have been in consolidation over the past two days without much of a pull back, which is generally bullish. This is conceptually similar to a large white candle and followed by consolidation trading which does not break below the S1 level, followed by price moving higher. The last two days could be viewed as a miniture bull flag. Today might be the day we see price action break through the 875 on the SPX...the Nasdaq chart target is still 1,765. The Nasdaq is has been pulling modestly back from a higher high to a higer low in a miniture bull flag. There should be some interesting opportunities in our At the Open list. Check out these charts and the charts in last night's post... (click image to enlarge) At the Open on Wednesday SPY – spinning top ALGT – bull flag support bounce at 30 DMA SCHN – white spinning top at 200 DMA ICE – inverted hammer at 20 DMA DECK – close above support of 30 DMA SNDA – spinning top at 20 DMA ADBE – doji at Friday’s S1 EBAY – inside day inverted hammer at 200 DMA GME – spinning top close below 200 DMA SHLD – doji at 200 DMA ADS – spinning top AG – confirm bearish harami…support bounce at 20 DMA LEAP – inside day potential bearish harami after two day bounce ISRG – confirm bearish harami…close above Friday’s S2 DHR – spinning top in two day bull flag…potential low day XLNX – inside day

Tuesday, April 28, 2009

Spinning Top Tuesday...

DJIA - 8.05, -0.10% SP500 - 2.35, -0.27% NASDAQ Comp. - 5.60, -0.33% Russell 2000 + 3.31, +0.70% Exchange NYSE NASD Advancing 1,863 1,569 Declining 1,804 1,145 Oil $49.22 -$0.22 Gold $892.80 -$14.70 SOX 246.67 -4.13 VIX 37.95 -0.97 The VIX moved down and did NOT confirm the move down in the SPX on Tuesday. Strongest Sectors: XLP +0.46%...XLU +0.39%...XLP +0.37% Weakest Sectors: XLF -3.09%...XLI -1.18%...XLB -0.53% Four of nine Sectors; Healthcare, Utilities, Consumer Staples and Technology outperformed the SPX. Financial stocks stronger than XLF -3.07% include: SPG, TRV, ALL, JPM, GS, AXP, CB, MS, MMC, SCHW, KEY, AFL, CME, AOC, PNC, MET, USB, UVZ, PRU, BK and ETF UYG. Leading tech stocks stronger than XLK, -0.06% include: IBM, EMC, CSCO, BZ, T, MA, SYMC and ADP. Sector Watch Up Trending: Sideways: XLE, XLY, XLV, XLK, XLB Down Trending: XLF, XLP, XLI, XLU I was surprised to read this mornings' headline "Futures Point to a Lover Open..." and delighted as it gave me an endorphin rush. I'm not sure if the headline or the fact that no one posted any comments about the headline was more surprising. Did everyone read this and their brain automatically replace the word "Lover" with "Lower" and no one consciously noticed it? Or did everyone get as good a laugh as I did? Tuesday’s spinning tops just barely confirmed Monday’s bearish harami on the DJIA and SPX. Both the Nasdaq and RUT candles did NOT confirm Monday’s bearish patterns. In fact the RUT was up on Tuesday. Since lower highs and lower lows were made on Tuesday and only two of the indices confirmed Monday’s bearish pattern, Wednesday is still a Yellow Alert for short term traders. Tuesday is a low day and could also be the low of this short term pull back. With the price action Thursday and Friday moving up and Monday and Tuesday being pause days, in the context of the pattern of one to two day up days and one to two pause days since March 10, the potential exits for Wednesday to resume the move to the upside. If the indices move up on Wednesday this would be from Tuesday’s higher low compared with April 21, which could provide the support base for the SPX to break above the 875 resistance and the Nasdaq to resume its move to its chart target of 1,765. Adding weight to this potential is the below average volume on the DJIA the past two days...both the price action and volume suggest not a lot of aggressive sellers at this level and the buyers may have just being providing the pause that refreshes. We’ll be watching closely on Wednesday to see if the pause or pullback continues another day or the trend up resumes. Stay tuned…. Index Commentary The DJIA formed a spinning top that confirmed Monday’s bearish harami l…volume was below average at 274 million shares…closed above its 20, 30 and 50 DMA. The SPX formed a white spinning top that confirmed Monday’s bearish harami and inside day…closed above its 20, 30 and 50 DMA. The Nasdaq formed a spinning top that did NOT confirm Monday’s shooting star and bearish harami…closed just below horizontal resistance of 1682…short term chart price target is 1,765…closed above its 20, 30 and 50 DMA. The RUT formed a piercing line pattern that did NOT confirm Monday’s bearish harami…closed above its 20, 30 and 50 DMA Can you identify the support bounce in each of these stocks from At the Open on Tuesday list? (click image to enlarge) At the Open on Wednesday SPY – spinning top ALGT – bull flag support bounce at 30 DMA SCHN – white spinning top at 200 DMA ICE – inverted hammer at 20 DMA DECK – close above support of 30 DMA SNDA – spinning top at 20 DMA ADBE – doji at Friday’s S1 EBAY – inside day inverted hammer at 200 DMA GME – spinning top close below 200 DMA SHLD – doji at 200 DMA ADS – spinning top AG – confirm bearish harami…support bounce at 20 DMA LEAP – inside day potential bearish harami after two day bounce ISRG – confirm bearish harami…close above Friday’s S2 DHR – spinning top in two day bull flag…potential low day XLNX – inside day Stocks to Watch on Wednesday Leading Stocks Holding Above 30 DMA BIDU, CLB, ICE, ALGT, DLB, PWR, VPRT, AMZN, USD, AAPL, CTSH, AXYS, BAP, CAM, GMCR, JCOM, JOSB, ATW, GR, SYNA, EBAY, GES, SNA, ORCL, WRC, DECK, HDB, PCP, UYG, FSLR, GME, WCG, RIMM, X, BYI, CBST, HLF, AMX, MHS, WAB, FAS, AFAM, JW.A, K, RBN, ESRX, PCLN, URE, VAR, PCR, PPD, HANS, SWN, FLS, SNHY, GILD, GXDX, TDG, NIHD, RCI, STRA, CPLA, ACN, AMED, DLTR, GPRO, NFLX Moving Above 30 DMA = 0 Moving Below 30 DMA = 2 JEC, JOYG Staying Below 30 DMA CHL, EZPW, SPWRA, MCD, BDX, PETS, CBST, MYGN, DV, MUR, SLGN, TDG, BIIB, MOS, NTLS, MON, WMT, GILD, BKC, APEI, BLUD, ESI, GXDX, PSYS Intermediate Term Market Trend: Neutral Short Term Market Trend: Neutral

Futres Point to a Lover Open...

10:05 am ET - For the second day in a row ES and NQ futures open lower and rally. ES are now down only - 3.50 and NQ futures are - 4.50. Follow your rules... BMO - ES -13 and NQ -13 are lower in pre-market trading and pointing to a lower open. Check out thes At the Open stocks: (click image to enlarge) At the Open on Tuesday SPY – shooting star ADBE - bearish harami after horizontal breakout ALGT – bull flag support bounce at 30 DMA RS – spinning top at 200 DMA ICE – support bounce at 20 DMA XLNX – white spinning top AMGN – breakout of 50 DMA DECK – at support of 30 DMA SNDA – spinning top support bounce at 20 DMA EBAY – inside day at 200 DMA GME – spinning top inside day at 200 DMA SHLD – spinning top inside day at 200 DMA ADS – spinning top AG – bearish harami at horizontal resistance LEAP – large white candle rise to 30 DMA ISRG – bearish harami

Monday, April 27, 2009

Bearish Harami Monday - Yellow Alert

DJIA - 51.29, -0.64% SP500 - 8.72, -1.01% NASDAQ Comp. - 14.88, -0.88% Russell 2000 - 9.21, -1.92% Exchange NYSE NASD Advancing 1,187 950 Declining 2,540 1,820 Oil $50.14 -$1.41 Gold $907.50 -$6.10 SOX 250.80 -2.85 VIX 38.32 +1.50 The VIX moved up and did confirm the move down in the SPX on Monday. Strongest Sectors: XLV +1.09%...XLU +0.71%...XLP +0.60% Weakest Sectors: XLB -2.19%...XLI -1.99%...XLE -1.89% Four of nine Sectors; Healthcare, Utilities, Consumer Staples and Technology outperformed the SPX. Financial stocks stronger than XLF -1.62% include ICE, TRV, AOC, GS, MMC, CB, ALL SCHW, NTRS and TROW. Leading tech stocks stronger than XLK -0.47%: QCOM, GLW, AAPL, T, AMT, DELL, ORCL, IBM and CSCO. Sector Watch Up Trending: Sideways: XLE, XLY, XLV, XLK, XLB Down Trending: XLF, XLP, XLI, XLU Monday’s price action formed an inside day on the SPX, DJIA and Nasdaq. The RUT formed lower higher and lower low. This could be the first time since this up trend started on March 10 that an up move has not led to a higher high. A close look at the SPX could be interpreted as a potential double top or a potential shift into a sideways trend. Check out the bearish harami inside day on the SPX: (click image to enlarge) Index Commentary - Yellow Alert The DJIA formed a bearish harami…volume was below average at 283 million shares…closed above its 20, 30 and 50 DMA. The SPX formed a bearish harami and inside day…closed above its 20, 30 and 50 DMA. The Nasdaq formed a shooting star and bearish harami…closed just below horizontal resistance of 1682…short term chart price target is 1,765…closed above its 20, 30 and 50 DMA. The RUT formed a bearish harami…closed above its 20, 30 and 50 DMA At the Open on Tuesday SPY – shooting star ALGT – bull flag support bounce at 30 DMA RS – spinning top at 200 DMA ICE – support bounce at 20 DMA XLNX – white spinning top AMGN – breakout of 50 DMA DECK – at support of 30 DMA SNDA – spinning top support bounce at 20 DMA EBAY – inside day at 200 DMA GME – spinning top inside day at 200 DMA SHLD – spinning top inside day at 200 DMA ADS – spinning top AG – bearish harami at horizontal resistance LEAP – large white candle rise to 30 DMA ISRG – bearish harami Stocks to Watch on Tuesday Leading Stocks Holding Above 30 DMA BIDU, CLB, ICE, ALGT, DLB, JEC, PWR, VPRT, AMZN, USD, AAPL, CTSH, AXYS, BAP, CAM, GMCR, JCOM, JOSB, ATW, GR, SYNA, EBAY, GES, SNA, ORCL, WRC, DECK, HDB, PCP, UYG, FSLR, GME, WCG, RIMM, X, BYI, CBST, HLF, AMX, MHS, WAB, FAS, AFAM, JW.A, K, RBN, ESRX, PCLN, URE, VAR, PCR, PPD, HANS, SWN, FLS, SNHY, JOYG, GILD, GXDX, TDG, NIHD, RCI, STRA, CPLA, ACN Moving Above 30 DMA = 3 AMED, DLTR, NFLX Moving Below 30 DMA = 3 CHL, EZPW, SPWRA Staying Below 30 DMA MCD, BDX, GPRO, PETS, CBST, MYGN, DV, MUR, SLGN, TDG, BIIB, MOS, NTLS, MON, WMT, GILD, BKC, APEI, BLUD, ESI, GXDX, PSYS Intermediate Term Market Trend: Neutral Short Term Market Trend: Neutral

Futures Pointing to a Lower Open...

Dave will be teaching the Basic Options Capstone Monday at 4:30 pm ET for anyone who is interested. Markets open lower and move higher...again showing that a lower open does not mean the market is going down from the open... BMO - ES -16 and NQ -20 futures are lower in pre-market trading and are pointing to a lower open. Friday's low is key support. Short term traders be prepared this morning to trade to the downside and protect short term profits if the pre-market activity becomes a daily trend. A pull back in an up trend will create potential support bounce setups... Look at these charts from At the Open on Friday... (click image to enlarge) Look at these charts from At the Open on Monday... (click image to enlarge) At the Open on Monday SPY – white spinning top ALGT – bull flag RS – 200 DMA support bounce ICE – spinning top after hammer at 20 DMA XLNX – bullish harami/inside day AMGN – double bottom support bounce after earnings DECK – at support of 20 DMA SNDA – white candle confirms hammer EBAY – hanging man after earnings gap at 200 DMA GME – hanging man above 200 DMA SHLD – support bounce break above 200 DMA ADS – large white candle confirm dragonfly doji in bull flag AG – close above horizontal resistance LEAP – outside day support bounce at 50 DMA and 50% Fibonacci retracement level ISRG – large white candle continuation

Saturday, April 25, 2009

Learn the Discipline

Learn the Discipline Model Portfolio Summary - Week 12 You can see all the positions opened in the Model Portfolio since March 10. Positions prior to March 10 are listed in earlier posts. If you are new to the blog there is a description in the February 7 post that details an overview of how the Model Portfolio is being run. You can read it by clicking here: http://chartsignals.blogspot.com/2009/02/coming-next-week_07.html All prior posts can be found in the left hand menu under Key Topics...Learn the Discipline. As of Friday April 24 the portfolio is 49.86% invested in stocks. The balance is in cash. The drop is stocks positions was a result of being stopped out of four positions this week: NTLS, MOS, MYGN, and BDX. We entered no new positions this week primarily a function of market action and Dave's focus on teaching a two day Advanced Technical Analysis Workshop in Atlanta. The total value of open stock positions is $80,963.87 and the total portfolio value is $162,383.49. The portfolio value increased this week while the SPX was down three points. There are now eight positions that have been open at least four weeks ranging in returns from -0.83% to +35.68%. The longer (six month) intermediate term trend in the market is still neutral or sideways. These eight trades are suggesting that the intermediate term strategy is working. As we have stated for the past several weeks the performance time period is still too short to be conclusive. The early results are still very positivie. The portfolio continues to outperform the SPX since February 2. The portfolio has mostly been less than 50% invested during its existence which means it has been taking less risk than the SPX which is fully invested. As a result the risk adjusted returns continue to be more than double the SPX. Full details on the positions can be viewed in the table below. (click image to enlarge)

Friday, April 24, 2009

Stocks Move Higher...Nasdaq Breaks Resistance...

DJIA + 119.23, +1.50% SP500 + 14.31, +1.68% NASDAQ Comp. + 42.08, +2.55% Russell 2000 + 12.12, +2.60% Exchange NYSE NASD Advancing 2831 1,983 Declining 876 776 Oil $51.55 +$2.70 Gold $913.60 +$7.40 SOX 253.65 +4.29 VIX 36.82 -0.89 The VIX moved down and did confirm the move up in the SPX on Friday. You may notice the move down in the VIX was very modest compared with the move up in the SPX. Some observers believe this is not confirming the SPX. Strongest Sectors: XLB +4.76%...XLE +2.90%...XLY +2.47% Weakest Sectors: XLP -0.42%...XLU -0.16%...XLV -0.13% Five of nine Sectors, Materials, Energy, Consumer Discretionary, Financials and Industrials outperformed the SPX. Financial stocks stronger than XLF +2.24% include AXP, KEY, ZION, PRU, WFC, PNC, SPG, MET, USB, BAC and ETF’s UYG and FAS. The Tech Sector XLK was up +1.42%. Leading tech stocks stronger than XLK +1.42%: MSFT, ADBE, MA CSCO, SYMC, TXN, DELL, HPQ, AMT, AMAT and QCOM. Check out these two SPDR Sectors and two SPDR Industry ETF's...they've been the strongest in this current rally... (click image to enlarge) Sector Watch Up Trending: Sideways: XLE, XLY, XLV, XLK, XLB Down Trending: XLF, XLP, XLI, XLU The SPX trended higher for most of Friday with two pullbacks late in the day, one occurring about two hours before the close and the last occurring in the last 10 minutes of the trading day. The first pullback represented essentially a 38.2 % Fibonacci retracement from Thursday’s late day low point that occurred around 3:15 pm ET. The SPX, DJIA and RUT are still below their April 17 resistance. The Nasdaq did break through its horizontal resistance on Friday creating a new short term price target of 1,765 and a time target of five days. Targets are not certainties, rather they are probabilities based on technical analysis measuring techniques. A one day pull back on Monday was followed by a piercing line bounce on Tuesday. The pullback on Monday and the piercing line bounce on Tuesday both found support at the 20 DMA. This indicates big money buying at the support level of the short term trend and continuation of the short term trend. The bounce was followed by two spinning top pause days on Wednesday and Thursday. Friday was another thrust day. You may have noticed this followed the technical price action pattern of one to two thrust days and one to two pause days that has been occurring during the past seven weeks. On Monday watch the open in relation to Friday’s close, if it is the same or higher and early trading continues higher, look for the SPX break its April 17 high and move to an 885 to 895 short term resistance area. Index Commentary The DJIA formed a formed a white candle that confirmed Thursday’s hammer like candle…volume was average at 402 million shares…closed above its 20, 30 and 50 DMA. The SPX formed a white candle that confirmed Thursday’s hammer like candle…closed above its 20, 30 and 50 DMA. The Nasdaq formed a white candle that confirmed Thursday’s dragonfly doji…broke through horizontal resistance of 1682…short term chart price target is 1,765…closed above its 20, 30 and 50 DMA. The RUT formed a white candle that did confirm Thursday’s hammer like candle…closed above its 20, 30 and 50 DMA Did you notice the big moves (5 to 10%) in several of our At the Open on Friday stocks? ISRG, SCHN, WYNN, AG, SHLD, ADS, LEAP At the Open on Monday SPY – white spinning top ALGT – bull flag RS – 200 DMA support bounce ICE – spinning top after hammer at 20 DMA XLNX – bullish harami/inside day AMGN – double bottom support bounce after earnings DECK – at support of 20 DMA SNDA – white candle confirms hammer EBAY – hanging man after earnings gap at 200 DMA GME - hanging man above 200 DMA SHLD – support bounce break above 200 DMA ADS – large white candle confirm dragonfly doji in bull flag AG – close above horizontal resistance LEAP – outside day support bounce at 50 DMA and 50% Fibonacci retracement level ISRG – large white candle continuation Stocks to Watch on Monday Leading Stocks Holding Above 30 DMA BIDU, CLB, ICE, ALGT, DLB, JEC, PWR, VPRT, AMZN, USD, AAPL, CTSH, AXYS, BAP, CAM, GMCR, JCOM, JOSB, ATW, GR, SYNA, EBAY, GES, SNA, ORCL, WRC, DECK, HDB, PCP, UYG, FSLR, GME, WCG, RIMM, X, BYI, CBST, EZPW, HLF, AMX, MHS, WAB, FAS, AFAM, CHL, JW.A, K, RBN, ESRX, PCLN, URE, VAR, PCR, PPD, HANS, SWN, FLS, SNHY, SPWRA, JOYG, GILD, GXDX, TDG, NIHD, RCI, STRA Moving Above 30 DMA = 2 CPLA, ACN Moving Below 30 DMA = 3 DLTR, NFLX, MCD Staying Below 30 DMA AMED, BDX, GPRO, PETS, CBST, MYGN, DV, MUR, SLGN, TDG, BIIB, MOS, NTLS, MON, WMT, GILD, BKC, APEI, BLUD, ESI, GXDX, PSYS Intermediate Term Market Trend: Neutral Short Term Market Trend: Up

Stocks Follow Through on 20 DMA Support Bounce...

1:30 pm ET - After last night's weather delayed flight I managed to make it home a little after 4 am MT. Although I woke up for about one minute shortly before the open and saw the ES futures up about 5 points, I decided the long positions would take care of themselves just fine and went back to sleep. Finally arising it appears that even in my sleep my judgement was accurate about Friday's price action. I know, I know you're asking yourself, how does he do that? It really is quited simple...it's because I know what I have taught many of you repeatedly for five years... Dave's Insight: The trend is the most important factor in every trade. What was the trend this morning? Up After some range bound trading on Thursday the market was moved higher by big money late in the day. Over night and leading into this morning that upward bias was still in the price action. Also Thursday upward bias survived the all NOT as important as some people make it out to be, at least as it relates to trend, Jobless Claims report which came in slightly worse than expected 640,000 versus 636,000 forecasted. The Existing Home Sales report was also below forecast. After the large one day pullback on Monday, support holding on Tuesday, price action staying above the 20 DMA (support for the short term trend) on Tuesday, Wednesday and Thursday and Thursday rallying even after those economic reports, it seemed a high probability conclusion that big money was interested in moving the market higher it again today. Did you watch the four charts this morning that I posted for you last night. Here they are after this morning's trading...It almost appears as if this Trend and Support and Resistance stuff has some merit to it, eh? (click image to enlarge)

Thursday, April 23, 2009

Stocks Move Higher on Late Day Rally...

DJIA + 70.49, +0.89% SP500 + 8.37, +0.99% NASDAQ Comp. + 6.09, +0.37% Russell 2000 - 4.09, -0.87% Exchange NYSE NASD Advancing 2,221 1,046 Declining 1,478 1,665 Oil $48.85 +$0.00 Gold $906.20 +$14.10 SOX 249.36 -1.72 VIX 37.15 -0.95 The VIX moved down and did confirm the move up in the SPX on Thursday. Strongest Sectors: XLF +4.70%...XLE +1.87%...XLI +1.10% Weakest Sectors: XLP +0.00%...XLY +0.00%...XLV +0.08% Three of nine Sectors, Financials, Energy and Industrials outperformed the SPX. Financial stocks returned to their winning ways as XLF, +4.70% led all sectors. Stocks stronger than XLF +4.70% include WFC, CME, MET, STT, AXP, PNC, BAC, NTRAS, TROW, SPG, PRU and ETF’s UYG and FAS. The Tech Sector XLK was up +0.48%. Leading tech stocks stronger than XLK +0.48%: EBAY, AAPL, MA, GLW, ORCL, QCOM, ADBE, CSCO, DELL, MSFT and YHOO. Sector Watch Up Trending: Sideways: XLE, XLY, XLV, XLK, XLB Down Trending: XLF, XLP, XLI, XLU I'm sitting in the Atlanta Airport with a flight departure of 9:30 pm...It is now 10:30 pm...A lightning and hail storm caused a delay...lightning struck the FAA congtrol tower and knocked out the radar so no planes could land or take off...our flight crew was on a plane in Jacksonville and could not take off because it would be unable to land in Atlanta...the radar is now repaired so the flight from Jacksonville is now on its way and looks like I'll get out tonight...I've posted our At the Open list since I had extra time...this is the first time I've seen a control tower struck by lightning...sounds kind of like the market, eh? The broad indices SPX, DJIA, Nasdaq and RUT had a roller coaster day in a relatively tight trading range as they moved lower after the open, started rising at mid-day, only to move lower with less than two hours to go and then rallied during the last half hour into the close, finishing modestly higher. The RUT closed down for the day. The SOX also closed slightly lower on Thursday. Index Commentary The DJIA formed a hammer like candle…volume was below average at 327 million shares…closed above its 20, 30 and 50 DMA. The SPX formed a hammer like candle…closed above its 20, 30 and 50 DMA. The Nasdaq formed a dragonfly doji…closed above its 20, 30 and 50 DMA. The RUT formed a black hammer like candle…closed above its 20, 30 and 50 DMA Look at these stocks with support bounce potential from our At the Open List: (click image to enlarge) At the Open on Friday SPY – hammer DECK – spinning top SNDA – hammer EBAY – horizontal resistance breakout…rose to 200 DMA SCHN – spinning top GME – spinning top at 200 DMA SHLD – spinning top, inside day at 200 DMA ADS – dragonfly doji 30 DMA bounce in bull flag STT – white candle higher close AG – doji in bull flag breakout XRT –black spinning top inside day USD – hammer support bounce at 30 DMA URE – white candle higher close WYNN – horizontal resistance breakout…three white soldiers like LEAP – black candle at 50% Fibonacci retracement level ISRG – doji inside day after short term up trend Stocks to Watch on Friday Leading Stocks Holding Above 30 DMA BIDU, CLB, NFLX, DLTR, ICE, ALGT, DLB, JEC, PWR, VPRT, AMZN, USD, AAPL, CTSH, AXYS, BAP, CAM, GMCR, JCOM, JOSB, ATW, GR, SYNA, EBAY, GES, SNA, ORCL, WRC, DECK, HDB, PCP, UYG, FSLR, GME, WCG, RIMM, X, BYI, CBST, EZPW, HLF, AMX, MHS, WAB, FAS, AFAM, CHL, JW.A, K, RBN, ESRX, PCLN, URE, VAR, PCR, PPD, HANS, SWN, CPLA, FLS, SNHY, SPWRA, JOYG, GILD, GXDX, TDG Moving Above 30 DMA = 4 MCD, NIHD, RCI, STRA Moving Below 30 DMA = 4 AMED, BDX, GPRO, PETS Staying Below 30 DMA CBST, MYGN, DV, MUR, SLGN, TDG, BIIB, MOS, NTLS, MON, WMT, GILD, BKC, APEI, BLUD, ESI, GXDX, ACN, PSYS Intermediate Term Market Trend: Neutral Short Term Market Trend: Neutral

Futures Point to Higher Open...

BMO - ES +7 and NQ +19 futures are trading higher in pre-market about 90 minutes before the open. AAPL is up over $4 after reporting earnings on Wednesday. RIMM, WYNN, BIDU and GOOG are alos trading higher in pre-market trading. Look for support bounce and bounce follow through opportunities in trading as the market heads higher. Check out these bull flag breakouts from out At the Open List: (click image to enlarge) At the Open on Thursday SPY – inverted hammer DECK – spinning top SNDA – black spinning top EBAY – bull flag breakout SCHN – shooting star GME – spinning top at 200 DMA SHLD – spinning top at 200 DMA ADS – black spinning top in bull flag STT – black spinning top above S1 AG – bull flag breakout XRT – white candle USD – support bounce break high of low day URE – bullish engulfing WYNN – bull flag breakout LEAP – inverted hammer ISRG – large white candle horizontal breakout

Wednesday, April 22, 2009

Stocks End Mixed...

DJIA - 82.99, -1.04% SP500 - 6.53, -0.77% NASDAQ Comp. + 2.27, +0.14% Russell 2000 + 0.66, +0.14% Exchange NYSE NASD Advancing 2,005 1,435 Declining 1,699 1,307 Oil $48.85 +$0.30 Gold $892.10 +$9.70 SOX 251.08 +10.42 VIX 38.10 +0.96 The VIX moved up and did confirm the move down in the SPX on Wednesday. Strongest Sectors: XLI +1.55%...XLY +1.00%...XLK +0.48% Weakest Sectors: XLF -3.58%...XLP -1.33%...XLV -1.08% Five of nine Sectors moved lower on Wednesday. Industrials, Consumer Discretionary, Technology and Materials were stronger than the SPX. Financial stocks weaker than XLF, -3.58% include: KEY, MS, USB, ALL, ICE, SPG, TRV, BK, STT, PNC, BAC, PRU, RF, AFL, MET, ZION, CME, CB, NTRS and ETF’s UYG and FAS. The Tech Sector XLK was up +0.48%. Leading tech stocks stronger than XLK +0.48%: EBAY, AMAT, TXN, INTC, EMC, T, SYMC, ADBE, DELL, YHOO and GOOG. On Tuesday we wrote; “The SOX +0.20%, was weaker than the SPX, not a sign of strength on Tuesday. Generally the SOX is a leader in a rally, however there have been times in recent weeks where it was weak on a strong rally day and then the next day it outperformed the market.” Did you notice on Wednesday that the SOX moved up 10.42 points or +4.33% while the SPX moved down? Sector Watch Up Trending: Sideways: XLE, XLY, XLV, XLK, XLB Down Trending: XLF, XLP, XLI, XLU Index Commentary The DJIA formed a spinning top…closed below 20 DMA…volume was 387 million shares…closed above its 30 and 50 DMA. The SPX formed an inverted hammer…closed above its 20, 30 and 50 DMA. The Nasdaq formed a white inverted hammer bullish engulfing pattern…closed above its 20, 30 and 50 DMA. The RUT formed a white inverted hammer…closed above its 20, 30 and 50 DMA Check out these bull flag breakouts from our At the Open list
(click image to enlarge)
At the Open on Thursday SPY – inverted hammer DECK – spinning top SNDA – black spinning top EBAY – bull flag breakout SCHN – shooting star GME – spinning top at 200 DMA SHLD – spinning top at 200 DMA ADS – black spinning top in bull flag STT – black spinning top above S1 AG – bull flag breakout XRT – white candle USD – support bounce break high of low day URE – bullish engulfing WYNN – bull flag breakout LEAP – inverted hammer ISRG – large white candle horizontal breakout Stocks to Watch on Thursday Leading Stocks Holding Above 30 DMA BIDU, CLB, NFLX, DLTR, ICE, ALGT, DLB, JEC, PWR, VPRT, AMZN, USD, AAPL, CTSH, AXYS, BAP, CAM, GMCR, GPRO, JCOM, JOSB, ATW, GR, SYNA, EBAY, GES, SNA, ORCL, WRC, DECK, HDB, PCP, UYG, FSLR, GME, WCG, RIMM, X, BDX, BYI, CBST, EZPW, HLF, AMX, MHS, WAB, FAS, AFAM, CHL, JW.A, K, RBN, ESRX, PCLN, URE, VAR, PCR, PPD, HANS, PETS, SWN, MCD, CPLA, AMED, FLS, SNHY, SPWRA, JOYG Moving Above 30 DMA = 3 GILD, GXDX, TDG Moving Below 30 DMA = 2 MCD, CBST Staying Below 30 DMA MYGN, STRA, DV, MUR, SLGN, TDG, NIHD, BIIB, MOS, NTLS, RCI, MON, WMT, GILD, BKC, APEI, BLUD, ESI, GXDX, ACN, PSYS Intermediate Term Market Trend: Neutral Short Term Market Trend: Neutral

Early Futures Trading Pointing to a Flat Opening...

Midday - Markets have rallied after a lower open...but have pulled back from their earlier highs and are still positive for the day...I was finally able to get the charts from earlier this morning uploaded...I will have more later... (click image to enlarge)
BMO - ES -4 and NQ -3 futures are down with a little more than 90 minutes before the open suggesting a flat open. Keep in mind the futures can change significantly over the next 90 minutes before the open. Take a look at our AT the Open stocks and the support bounce patterns on each. I'll be back with charts later as mobile technology isn't letting me upload them at the moment... At the Open on Wednesday SPY – piercing line DECK – piercing line SNDA – bullish engulfing EBAY – bullish engulfing SCHN – bullish engulfing GME – morning start pattern SHLD – piercing line ADS – white spinning top in bull flag STT – bullish engulfing AG – piercing line XRT – bullish engulfing USD – spinning top URE – bullish engulfing WYNN – piercing line LEAP – hammer/bullish harami FAZ – bearish engulfing ISRG – white candle did not confirm shooting star/bearish harami

Tuesday, April 21, 2009

Piercing Line Tuesday as Financials Lead the Market...

DJIA + 127.83, +1.63% SP500 + 17.69, +2.13% NASDAQ Comp. + 35.64, +2.22% Russell 2000 + 17.56, +3.88% Exchange NYSE NASD Advancing 2,871 2,048 Declining 859 700 Oil $46.51 +$0.63 Gold $882.40 -$4.80 SOX 240.66 +0.47 VIX 37.14 -2.04 The VIX moved down and did confirm the move up in the SPX on Tuesday. Strongest Sectors: XLF +7.40%...XLI +2.06%...XLB +2.43% Weakest Sectors: XLV -0.95%...XLU +0.37%...XLP +1.02% Eight of nine Sectors moved higher on Tuesday led by XLF +7.40%. Financials and Industrials were stronger than the SPX. Financial stocks weaker than XLF, +7.40% include: USB, STT, AFL, SPG, WFC, PRU, TROW, C, ALL, JPM, PNC, IVZ, BAC, MET and ETF’s UYG and FAS. The Tech Sector XLK was up +1.71%. Leading tech stocks stronger than XLK +1.71%: MA, YHOO, ORCL, GLW, INTC, DELL, CSCO, HPQ, AMT, MSFT and IBM which reported earnings last night. The SOX +0.20%, was weaker than the SPX, not a sign of strength on Tuesday. Generally the SOX is a leader in a rally, however there have been times in recent weeks where it was weak on a strong rally day and then the next day it outperformed the market. Sector Watch Up Trending: Sideways: XLE, XLY, XLV, XLK, XLB Down Trending: XLF, XLP, XLI, XLU Stocks rallied after opening lower following the trading pattern of the last six weeks; one to two thrust days and one to two pause days. For each of the indices, Tuesday was a low day. Watch for continuation of the support bounce on Wednesday. Remember the six week trend is still up. Two real time virtual orders filled from our Monday night AT Webcast on Tuesday morning. Both were buy stops for options if the stocks rose. BBBY 10 May 29 calls at 2.05, options closed up 75 cents or 36%. GME 10 May 30 calls at 1.55, options closed up 25 cents or 16%. Index Commentary The DJIA formed a piercing line candle…volume was average with 424 million shares…closed above its 20, 30 and 50 DMA. The SPX formed a piercing line…closed above its 20, 30 and 50 DMA. The Nasdaq formed a bullish engulfing pattern…closed above its 20, 30 and 50 DMA. The RUT formed a piercing line pattern…closed above its 20, 30 and 50 DMA At the Open on Wednesday - Check the Charts from our earlier post... SPY – piercing line DECK – piercing line SNDA – bullish engulfing EBAY – bullish engulfing SCHN – bullish engulfing GME – morning start pattern SHLD – piercing line ADS – white spinning top in bull flag STT – bullish engulfing AG – piercing line XRT – bullish engulfing USD – spinning top URE – bullish engulfing WYNN – piercing line LEAP – hammer/bullish harami FAZ – bearish engulfing ISRG – white candle did not confirm shooting star/bearish harami Stocks to Watch on Wednesday Leading Stocks Holding Above 30 DMA BIDU, CLB, NFLX, DLTR, ICE, ALGT, DLB, JEC, PWR, VPRT, AMZN, USD, AAPL, CTSH, AXYS, BAP, CAM, GMCR, GPRO, JCOM, JOSB, ATW, GR, SYNA, EBAY, GES, SNA, ORCL, WRC, DECK, HDB, PCP, UYG, FSLR, GME, WCG, RIMM, X, BDX, BYI, CBST, EZPW, HLF, AMX, MHS, WAB, FAS, AFAM, CHL, JW.A, K, RBN, ESRX, PCLN, URE, VAR, PCR, PPD, HANS, PETS, SWN, MCD, CPLA Moving Above 30 DMA = 5 AMED, FLS, SNHY, SPWRA, JOYG Moving Below 30 DMA = 2 MYGN, STRA Staying Below 30 DMA DV, MUR, SLGN, TDG, NIHD, BIIB, MOS, NTLS, RCI, MON, WMT, GILD, BKC, APEI, BLUD, ESI, GXDX, ACN, PSYS Intermediate Term Market Trend: Neutral Short Term Market Trend: Neutral

Futures Pointing to a Lower Open...

3:15 pm ET - Thanks to the amazing capabilities of modern technology...I'm sitting in an airplane waiting to take off to Atlanta, while I am posting this...with 45 minutes to go the ES, SPX, SPY and NQ are all moving up in a big way today...a good distance now from the lower open that started this day...this is why I teach overnight and pre-market futures only tell you what the open will be, not what the day will be...today is another great example of futures and the market is up...we placed two virtual trades in our AT Webcast last night for entry if the stocks moved up in the morning...both GME and BBBY were filled and have moved up nicely today...I will give you the exact numbers tonight when I arrive in Atlanta...well if you paid attention to our guidance this morning you should have been prepared to take advantage...also intermediate term traders are likely seeing your positions rebound nicely today....Remember, it is the trend that makes us money...I will stay focused...Will You? If you haven't reviewed the charts below take a close look at them and the bullish patterns they were forming early in the day.... 1:30 pm ET - The market has rallied all morning...ES, SPX, SPY and NQ are all higher...so are most stocks...check out the candle formations now... (click image to enlarge) (click image to enlarge) 9:45 am ET - Take a look at the support bounces that are occuring in early trading in our At the Open List stocks in early trading...notice the bull flag formations and the white candles that are beginning to form here in early trading... (click image to enlarge) (click image to enlarge) 9:40 am ET - Just 10 minutes into trading the ES -3 , NQ +7, SPX and SPY are rising...NQ has reversed from being down in pre-market to being positive for the morning BMO - ES - 9 and NQ - 11 futures are lower in pre-market trading pointing to a lower open. Watch key support levels this morning to see if buyers appear or if sellers maintain control. At the Open on Tuesday SPY – large black candle DECK – large black candle bull flag SNDA – large black candle, bull flag EBAY – spinning top in bull flag SCHN – black candle broke low of high day GME – hammer in bull flag SHLD – inside day close above 200 DMA ADS – black candle in bull flag STT – black candle in bull flag AG – black candle in bull flag XRT – evening star USD – confirm bearish harami URE – break low of high day WYNN – black candle break low of high day LEAP – break horizontal support and 200 DMA FAZ – whit candle break high of low day ISRG – shooting star…bearish harami

Monday, April 20, 2009

Yellow Alert Turns to Red as Stocks Break the Low of the High Day

DJIA - 289.60, -3.56% SP500 - 37.21, -4.28% NASDAQ Comp. - 54.86, -3.88% Russell 2000 - 26.88, -5.61% Exchange NYSE NASD Advancing 461 457 Declining 3,327 2,321 Oil $45.88 -$4.45 Gold $887.20 +$19.40 SOX 240.19 -14.62 VIX 39.18 +5.24 The VIX moved up and did confirm the move down in the SPX on Monday. Strongest Sectors: XLU -1.12%...XLV -1.94%...XLP -1.95% Weakest Sectors: XLF -11.16%...XLE -5.53%...XLB -4.62% All Sectors moved lower on Monday led by XLF -11.16%. Utilities, Healthcare, Consumer Staples, Technology and Consumer Discretionary were stronger than the SPX. Financial stocks weaker than XLF, -11.16% include: BAC, RF, C, KEY, WFC, PRU, USB, ZION, AFL, AXP, SPG and PNC. The Tech Sector XLK was down -3.18%. Leading tech stocks stronger than XLK –3.18%: IBM, ORCL, ADP, EBAY, AAPL, T, EMC, VZ, SYMC and MSFT. The SOX -5.74%, was down more than the SPX, a confirming sign of weakness. Sector Watch Up Trending: Sideways: XLE, XLY, XLV, XLK, XLB Down Trending: XLF, XLP, XLI, XLU We put you on Yellow Alert and the market opened lower and traded down all day long. Our post on Friday elaborated the reasons for the Yellow Alert. Click here to review those technical factors: http://chartsignals.blogspot.com/2009/04/spinning-top-on-friday.html Short term traders may have had an exit signal on their trades or an entry signal for counter trend trades. Intermediate term traders may be holding as Monday’s pullback did not break intermediate term support. With the the thrust pause cycle of the past 6 weeks lasting one to days up and then one to two days down...maintain your focus on Tuesday for any signs of a support bounce. The red line in the Marke t Forecast indicator is in the lower reversal zone indicating approximately a 65% of a technicacl bounce within one day. The SPX, Nasdaq and RUT all closed above the short term support of their 20 DMA. The DJIA which closed just below its 20 DMA traded 453 million shares down from 537 million shares on Friday. Index Commentary The DJIA formed a large black candle and closed below the low of the high day…volume decreased to 453 million shares…closed above its 30 and 50 DMA. The SPX formed a large black candle and closed below the low of the high day forming an evening star pattern that we alerted to on Friday…closed above its 20, 30 and 50 DMA. The Nasdaq formed a large black candle closing below the low of the high day …closed above its 20, 30 and 50 DMA. The RUT formed a large black candle closing below the low of the high day…closed above its 20, 30 and 50 DMA At the Open on Tuesday SPY – large black candle DECK – large black candle bull flag SNDA – large black candle, bull flag EBAY – spinning top in bull flag SCHN – black candle broke low of high day GME – hammer in bull flag SHLD – inside day close above 200 DMA ADS – black candle in bull flag STT – black candle in bull flag AG – black candle in bull flag XRT – evening star USD – confirmed bearish harami URE – break low of high day WYNN – black candle break low of high day LEAP – break horizontal support and 200 DMA FAZ – whit candle break high of low day ISRG – shooting star…bearish harami Stocks to Watch on Tuesday Leading Stocks Holding Above 30 DMA BIDU, CLB, NFLX, DLTR, ICE, ALGT, DLB, JEC, PWR, VPRT, AMZN, USD, AAPL, CTSH, AXYS, BAP, CAM, GMCR, GPRO, JCOM, JOSB, ATW, GR, SYNA, EBAY, GES, SNA, ORCL, WRC, DECK, HDB, PCP, UYG, FSLR, GME, WCG, RIMM, X, BDX, BYI, CBST, EZPW, HLF, MYGN, AMX, MHS, WAB, FAS, AFAM, CHL, JW.A, K, RBN, ESRX, PCLN, URE, VAR, PCR, PPD, HANS, PETS, STRA, SWN, MCD, CPLA Moving Above 30 DMA = 0 Moving Below 30 DMA = 10 AMED, DV, FLS, MUR, SLGN, TDG, NIHD, SNHY, SPWRA, JOYG Staying Below 30 DMA BIIB, MOS, NTLS, RCI, MON, WMT, GILD, BKC, APEI, BLUD, ESI, GXDX, ACN, PSYS Intermediate Term Market Trend: Neutral Short Term Market Trend: Down

Futures Pointing to a Lower Open

2:08 pm ET - Once again the warning from our Yellow Alert materializes as stocks break the low of the high day. Take a look at some of the charts from our At the Open List. See any Chart Signals for the way you trade? (click image to enlarge) (click image to enlarge) 12:40 pm ET - After falling for the first 90 minutes the SPY, SPX and ES have found at least a support area for the past 90 minutes. The SPY is the 84 area, the SPX is the 839 - 840 area and the ES is the 835 - 836 area. Look at the 10 minute SPY chart to see this support area is the support area of last Tuesday and Wednesday. (click image to enlarge) 10:35 am ET - After opening lower, the first hour of trading has been down. SPY opened down from Friday's close at 85.54 and is currently 84.46. The sell off has been straight down in the first hour. The SPY has fallen to the resistance level established on April 2 at the 84.50 - 84.60 level. We'll see if buyers step at this level. Take a look at the 30 min. chart to see the current area of support. (click image to enlarge) BMO - ES -15 and NQ - 24 are lower in pre-market trading pointing to a lower open in the cash markets. If cash opens lower this will break the low of the high day which was Friday. Take a close look at the ES this morning and see how it is below Friday's low, we'll watch to see if it is able to move above this level in early trading this morning. (click image to enlarge) At the Open on Monday SPY – white spinning top DECK – large white candle…hit 66 – 67 price target SNDA – large black candle CTSH – doji EBAY – hammer in bull flag SCHN – white spinning at 200 DMA GME – large black candle…shadow bounce on 30 DMA SHLD – white candle breakout of 200 DMA GS – spinning top XRT – hanging man USD – potential bearish harami URE – white spinning top WYNN – black spinning top at horizontal resistance CELG – black spinning top LEAP – confirmed tombstone doji breaks low of high day FAZ – black spinning top ISRG – large white candle

Saturday, April 18, 2009

Learn the Discipline

Learn the Discipline Model Portfolio Summary - Week 11 In the table below you can see all the positions we have opened since March 10. Positions prior to March 10 are listed in earlier posts. As of Friday April 17 the portfolio is 54.66% in stocks and the balance in cash. The Portfolio was stopped out of two positions this week, PETS and GILD, both with losses. We entered just one new position this week, a second position in FAS. The total value of the open positions is $$88,471.00 and the total portfolio value is $161,859.57. There are still only seven positions that are open longer that four weeks with returns ranging from 4.00% to 39.21%. Four of the positions DLB, NFLX, PCLN and VPRT increased in value this week, while ICE, MCD and WMT pulled back. These seven trades along with the five trades that were opened at the same time that have been stopped (see the April 11 post - click here: http://chartsignals.blogspot.com/2009/04/learn-discipline.html ) continue to suggest that this intermediate term strategy is working. Again we reiterate that it is too early and the number of trades surviving over four weeks is too small to be conclusive regarding the validity of the strategy. However the early evidence continues to be encouraging. The portfolio continues to outperform the SPX over the time period since February 2, even though it has not been fully invested like the SPX. Its risk adjusted return is still more than double the SPX.

Friday, April 17, 2009

Spinning Top on Friday...

DJIA + 5.90, +0.07% SP500 + 4.30, +0.50% NASDAQ Comp. + 2.63, +0.16% Russell 2000 + 5.49, +1.16% Exchange NYSE NASD Advancing 2,442 1,709 Declining 1,277 1,068 Oil $50.33 +$0.35 Gold $867.80 -$12.00 SOX 254.81 +0.31 VIX 33.94 -1.85 The VIX moved down and did confirm the move up in the SPX on Friday. Strongest Sectors: XLF +1.28%...XLY +1.21%...XLE +1.17% Weakest Sectors: XLK -0.18%...XLU -0.15%...XLI -0.05% The Sectors were mixed on Friday with six moving slightly higher and three moving lower. XLF led all sectors with a modest gain. Financial stocks stronger than XLF, +1.28% include: ZION, RF, AFL, PNC, AXP, KEY, SPG, MS, WFC, USB, AOC, BAC, TROW, ICE, MET and ETF’s UYG and FAS. The Tech Sector XLK was the weakest sector down a modest -0.18%. Leading tech stocks stronger than XLK at -0.18%: DELL, AAPL, GLW, ADBE, SYMC, TXN, GOOG, MA, AMAT, VZ, EBAY, T and IBM. The SOX barely made a new high close while failing to make a new intraday high as horizontal resistance held. Sector Watch Up Trending: Sideways: XLE, XLY, XLV, XLK, XLB Down Trending: XLF, XLP, XLI, XLU No, No, No...Not Again... Yes, once again... It's time for...Another...Yellow Alert... The major indices on Friday finished six consecutive weeks up for the first time since 2007 completing a V Bottom formation off the low of March 6. Last Thursday, April 9, in the Weekly Wrap Dave pointed out that the chart with the SPX breakout that day indicated an SPX target over the next six trading days of 875. Yes, the session is recorded. On Friday, April 17, the SPX hit an intraday high of 875.63. Target achieved. For the skeptics, yes, yes, we know, it's only an accident. Friday’s Spinning Top is clear indication that Wednesday and Thursday’s upward momentum is at least pausing. Remember upward momentum will slow down as the first step to reversing. The combination of the achievement of a short term breakout price target, a spinning top on Friday, a 100% retracement of the February sell off, the failure of SOX to break horizontal resistance and the trading pattern of one to two strong days and then one to two pause days gives us a Yellow Alert for Monday. The key positive for Friday was the VIX making a new low close. Once again the question becomes, is this simply a pause that refreshes or a short term move to the downside? Short term traders should once again watch for a break of the low of the high day on Monday which is a potential exit signal for short term bullish trades. Take a look at Friday's SPX chart. What candle pattern is formed on Friday? What does it tell you about momentum? (click image to enlarge) Index CommentaryYellow Alert The DJIA formed a doji…volume increased to 537 million shares…closed above its 20, 30 and 50 DMA. The SPX formed a white spinning top…potentially the second candle in an evening star pattern…closed above its 20, 30 and 50 DMA. The Nasdaq formed a white spinning top …closed above its 20, 30 and 50 DMA. The RUT formed a white spinning top…closed above its 20, 30 and 50 DMA At the Open on Monday SPY – white spinning top DECK – large white candle…hit 66 – 67 price target SNDA – large black candle CTSH – doji EBAY – hammer in bull flag SCHN – white spinning at 200 DMA GME – large black candle…shadow bounce on 30 DMA SHLD – white candle breakout of 200 DMA GS – spinning top XRT – hanging man USD – potential bearish harami URE – white spinning top WYNN – black spinning top at horizontal resistance CELG – black spinning top LEAP – confirmed tombstone doji breaks low of high day FAZ – black spinning top ISRG – large white candle Stocks to Watch on Monday Leading Stocks Holding Above 30 DMA BIDU, CLB, NFLX, DLTR, ICE, ALGT, DLB, JEC, PWR, VPRT, AMZN, USD, AAPL, CTSH, FLS, JOYG, AXYS, BAP, CAM, GMCR, GPRO, JCOM, JOSB, MUR, ATW, GR, SLGN, SYNA, SNHY, EBAY, GES, SNA, ORCL, WRC, DECK, HDB, PCP, UYG, FSLR, GME, WCG, RIMM, X, BDX, BYI, CBST, EZPW, HLF, MYGN, AMX, MHS, WAB, FAS, AFAM, CHL, JW.A, K, RBN, ESRX, PCLN, URE, AMED, VAR, PCR, PPD, MON, NIHD, SPWRA, HANS, PETS, STRA, SWN, TDG, MCD Moving Above 30 DMA = 2 CPLA, DV Moving Below 30 DMA = 4 BIIB, MOS, NTLS, RCI Staying Below 30 DMA WMT, GILD, BKC, APEI, BLUD, ESI, GXDX, ACN, PSYS Intermediate Term Market Trend: Neutral Short Term Market Trend: Up