Support Bounce Tuesday Afternoon...

DJIA + 50.34, +0.60% SP500 - 0.89, -0.10% NASDAQ Comp. - 15.32, -0.88% Russell 2000 - 6.76, -1.35% Exchange NYSE NASD Advancing 1,651 1,000 Declining 2,080 1,790 Oil $58.85 +$0.35 Gold $923.50 +$10.50 SOX 242.53 -6.33 VIX 31.88 -1.07 The VIX moved down and did NOT confirm the move down in the SPX on Tuesday. From a practical perspective the SPX was flat or unchanged. Strongest Sectors: XLV +1.63%...XLP +1.19%...XLB +1.00% Weakest Sectors: XLY -2.12%...XLF -2.12%...XLI -1.08% Five of nine Sectors moved higher on Tuesday. Healthcare and Consumer Staples, Materials, Utilities and Energy were stronger than SPX -0.10%. Financial stocks stronger than XLF -2.12% include: CME, ICE, TRV, TROW, ALL, AFL, NTRS, MS, AOC, SCHW, MET, GS, MMC, CB, SPG, STT, JPM and IVX. Leading tech stocks stronger than XLK, -0.53% include: MSFT, VZ, DELL, T, IBM, CSCO, ADP and HPQ. Stocks weaker include: AAPL, YHOO, QCOM, GOOG, AMT, AMAT, EMC and MA. Sector Watch Up Trending: Horizontal Breakout: XLB, XLK, XLY Sideways: XLE, XLV, XLF, XLP, XLI Down Trending: XLU SPX Key resistance levels: 944 = horizontal 954 = 200 DMA 957 = short term chart target Key support levels: 904 = weekly S1 891 = 38.2% Fib level 875 = horizontal The SPX opened slightly higher then sold off from the open to the 896 area and rebounded after two days of pull back. Does this sound familiar? Two days of pull back? Does this sound familiar? If it doesn’t sound familar you haven’t been reading this blog over the past several weeks. If it doesn’t you weren’t reading this blog last night. I sincerely hope you are not surprised by this. I hope if you are an intermediate term trader that you didn’t give up this afternoon and sell at the low. If you are a short term trader and exited according to your rules I hope you are prepared to reenter according to your rules if prices rise on Wednesday with a follow through on Tuesday’s support bounce. After a two day pull back look for stock prices to move higher on Wednesday in the market's alternating pattern of one to two thrust days and one to two pause days. Exchange stocks CME and ICE were strong while bank and other financial stocks were again weak. Financial stocks did bounce off their intraday lows around 1 pm ET and moved higher into the close. Monday and Tuesday's pull back fournd support this afternoon at the 61.8% fibbonaci retracement level of last week's 22% rise. Other strong stocks included SNDA from our At the Open on Monday list and drug stocks PFE, GSK, AZN, MRK, SGP, JNJ, LLY, ABT and BMY. Tech stocks also sold off on Tuesday after rising modestly on Monday as sellers took a big bite out of AAPL. XLK made a higher low on Tuesday, so watch for a support bounce on Wednesday. Which of these charts is a bull flag and which is a hammer? (click image to enlarge) Index Commentary The DJIA…white spinning top did NOT confirm Monday’s bearish harami…fell below and rallied to close above horizontal resistance at 8,405…three month chart target 10,340…volume slightly below average at 334 million shares…closed above its 20, 30 and 50 DMA. The SPX formed a hammer…3 month chart target of 1,075…closed above its 20, 30 and 50 DMA. The Nasdaq formed a black candle and found support at its 20 DMA and formed a lower shadow…closed below its 200 DMA…consolidating after reaching short term chart price target of 1,765…3 month chart target of 2,065…closed above its 20, 30 and 50 DMA. The RUT formed a black candle that did confirm Monday’s bearish harami…had a support bounce near its 20 DMA…appears to be forming a horizontal flag…3 month chart target 606…closed above its 20, 30 and 50 DMA At the Open on Wednesday SPY – hammer in horizontal flag FAS – black spinning top bounce off 20 DMA STT – hammer in bull flag WYNN – black candle in horizontal flag KOL – hammer in horizontal flag SCHN – hammer/bullish harami EBAY – black spinning top in pennant above 200 DMA SNDA – white candle support bounce ZION – black confirm bearish harami two day bull flag ADBE – black spinning top in bull flag JNPR – white spinning top in bull flag CTV – black spinning top in bull flag BBT – large black candle in bull flag OSG – hammer in bull flag EL – black spinning top in bull flag Stocks to Watch on Wednesday Leading Stocks Holding Above 30 DMA BIDU, CLB, ICE, DLB, VPRT, AAPL, CTSH, AXYS, BAP, CAM, GMCR, ATW, GR, SYNA, EBAY, GES, SNA, WRC, HDB, PCP, UYG, FSLR, 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, TDG, NIHD, RCI, STRA, ACN, AMED, JOYG, MON, MUR, PSYS, SPWRA, NTLS, CHL, DECK, MOS, GXDX, CBST, DV, PETS Moving Above 30 DMA = 2 CPLA, WMT Moving Below 30 DMA = 3 AMZN, JOSB, EZPW Staying Below 30 DMA JEC, MCD, PWR, DLTR, USD, DECK, ORCL, SYNA, ALGT, JCOM, NFLX, GME, GILD, GPRO, BDX, CBST, MYGN, SLGN, BIIB, BKC, APEI, BLUD, ESI Intermediate Term Market Trend: Neutral Short Term Market Trend: Neutral