Gap Up, Fade, Rally...End Near Unchanged...

DJIA - 24.04, -0.27% SP500 - 3.28, -0.35% NASDAQ Comp. - 7.73, -0.38% Russell 2000 - 4.22, -0.80% Exchange NYSE NASD Advancing 1,352 1,064 Declining 1,622 1,647 Oil $71.33 +$1.32 Gold $954.10 +$0.10 SOX 283.20 +0.56 VIX 28.46 +0.19 The VIX moved up and did confirm the move down in the SPX on Wednesday. Strongest Sectors: XLU +1.56%...XLE +0.90%...XLK +0.27% Weakest Sectors: XLF -1.52%...XLY -1.48%...XLP -1.11% Four of nine sectors moved higher on Tuesday. Utilities, Energy, Technology and Materials were stronger than the SPX -0.35%. Financial stocks stronger than XLF -1.52%: C, CB, MMC, IVZ, AOC, USB, TRV, BAC, KEY, AFL, AXP, BK, JPM, SPG and RF. Leading tech stocks stronger than XLK +0.27% include: MA, DELL, SFT, ADBE, VZ and T. Sector Watch Up Trending: Horizontal Breakout: XLB, XLK, XLY, XLE Sideways: XLV, XLF, XLP, XLI, XLU Down Trending: SPX Key resistance levels: 944 = January horizontal 962 = 161.8% Fib extension Key support levels: 930 = horizontal & 200 DMA 913 = Friday’s S1 907 = Friday’s S2 899 = Thursday’s S1 875 = horizontal The SPX looked like it could potentially break through the 950 horizontal resistance at the open this morning only to turn into another roller coaster ride as it sold off to the 930 support followed by a late day rally to close near unchanged. This is the same trading pattern as last Friday. The SPX closed down -0.35% which took back Tuesday’s +0.35% gain. Two days of trading and the SPX is essentially were it was on Monday’s close 939.14. Wednesday’s trading action extends the narrow trading range between 925 and 950 into its seventh day. Essentially the pattern is shaping up as a horizontal bull flag which is a trend continuation pattern. Light volume in a flag pattern suggests that there are not that many traders that are locking in profits at these price levels. Why? Generally it would because those holding stocks that could sell with profits at this level are not doing so because they believe prices will go higher and it is in their best interest to hold for greater profits. Once light selling drives price to support, buyers are moving prices back up on similarly light volume suggesting that the low volume selling pressure is exhausted. The lack of heavy selling at the highest price levels in seven months is a bullish indication. Key Nasdaq stocks MSFT, FSLR, RIMM, ADBE, DTV, ATVI, INTC and QCOM moved higher. EBAY, SYMC, TEVA, AMZN, CSCO, GILD and GOOG moved moderately lower. Oil again rose to its highest level since last November. Index Commentary The DJIA formed a black spinning top… three month chart target 10,340…volume was a below average 219 million shares …closed above its 20, 30, 50 and 200 DMA. The SPX formed a black spinning top …3 month chart target of 1,075…closed above its 20, 30, 50 and 200 DMA. The Nasdaq formed a black spinning top…3 month chart target of 2,065…closed above its 20, 30 50 and 200 DMA. The RUT formed a black spinning top….3 month chart target 606…closed above its 20, 30, 50 and 200 DMA. At the Open on Wednesday SPY – black spinning top at resistance KOL – black spinning top USD – hanging man FAS – black candle JOYG – black spinning top BIDU – bearish engulfing ADBE – white spinning top X – white candle horizontal breakout +6.11% ISRG – doji above 200 DMA FWLT – black spinning top SHLD – black spinning top UNG – black spinning top NTAP – black spinning top ZION – black spinning top CTV – black spinning top AAPL – black spinning top confirm hanging man RIMM – black spinning top VPRT – white candle continuation support bounce +4.01% DECK – white candle 200 DMA breakout +2.39% MICC – black spinning top at 20 DMA GES – bearish engulfing TRLG – bearish engulfing DDS – dragonfly doji SCHN – large white candle breakout continuation +5.06% MRVL – hanging man bounce at S1 Stocks to Watch on Thursday Leading Stocks Holding Above 30 DMA BIDU, CLB, ICE, VPRT, CTSH, BAP, CAM, GMCR, ATW, GR, EBAY, TRLG, HDB, PCP, RIMM, WCG, UYG, HLF, AMX, K, PCLN, VAR, PCR, PPD, SWN, FLS, TDG, NIHD, RCI, JOYG, MUR, PSYS, CHL, MOS, DV, AXYS, BIIB, BYI, CPLA, SPWRA, SYNA, X, MCD, BDX, CBST, AAPL, DLTR, ESRX, GES, GXDX, ORCL, RBN, USD, WRC, DECK, FAS, WMT, CPLA, JEC, MYGN, PWR, URE, AMZN, DV, EZPW, JCOM, SNA, SNHY, STRA, BLUD, GILD, SLGN, JW.A, ACN Moving Above 30 DMA = 1 FSLR Moving Below 30 DMA = 2 DLB, PSYS Staying Below 30 DMA JOSB, AFAM, MHS, NTLS, APEI, WAB, ESI, HANS, URE, MON, AMED, PETS, PWR, ALGT, NFLX, GME, GPRO, BKC Intermediate Term Market Trend: Neutral Short Term Market Trend: Neutral