Friday, July 31, 2009

Markets End Flat, Oil, Gold Rise...

Good afternoon everyone...as you are probably aware I have been in Chicago teaching an AT Workshop to 420 traders...I arrived home late last night and got to spend some of the day relaxing and trading...on balance it was a good day for Financials and Materials stocks...some tech stocks like AAPL, GOOG and BIDU started strong and ended weak. AAPL did close up 60 cents but had been up nearly $2. On the other hand XLF was up 1% and FAS +1.78%. We did a real time virtual trade in BAC in our workshop yesterday, going long the Sep 15 Call at $0.66 at 10:13:11 am ET. BAC +5.87% on Friday led to a 22 cent rise in the Sep 15 call or 33%. The trade was based on a resistance breakout or what I call Dave's B pattern. The SPX and NDX rose but were unable to hold on to gains...a number of second tier earnings stocks fared poorly after releasing earnings, so the sustainability of the rally was just not there today. I'll be back later with my Friday post and some important comments on what you need to focus on for Monday... DJIA + 17.15, +0.19% SP500 + 0.73, +0.07% NASDAQ Comp. - 5.80, -.0.29% Russell 2000 - 1.09, -0.20% Exchange NYSE NASD Advancing 1,738 1,312 Declining 1,137 1,382 Oil $69.45 +$2.51 Gold $953.70 +$18.80 SOX 301.74 +0.23 VIX 25.92 +0.52 The VIX moved up and did NOT confirm the move up in the SPX on Friday. Strongest Sectors: XLB +1.04%...XLF +1.01%...XLE +0.98% Weakest Sectors: XLU -1.26%...XLV -0.78%...XLK -0.35% Four of nine sectors moved higher and XLY was unchanged on Firday. Materials, Financials, Energy and Industrials were stronger than the SPX +0.07%. Financial stocks stronger than XLF +1.01: BAC, KEY, RF, PNC, TRV, STT, ALL, CB, MET and ETFs UYG and FAS. Tech stocks stronger than XLK -0.35%: ADP, HPQ, AMAT, SYMC, GLW, ADBE, AAPL, CSCO, IBM, MA and ORCL. Sector Watch Up Trending: XLK Horizontal Breakout: XLB, XLY Sideways: XLE, XLV, XLF, XLP, XLI, XLU Down Trending: SPX Key resistance levels: 996 = Thursday’s high 1,007 = November horizontal 1,025 = 950 break out price target Key support levels: 980 = last broken resistance now support 962 = 161.8% Fib extension 944 – 956 = old January/June/July resistance During the past three weeks the markets have been in the midst of earnings season. Strong earnings during the week of July 13 from the likes of GS, INTC, IBM and CTAS propeled the SPX from 875 support to 930 to 950 resistance (see charts below). Early in the week of July 20 reports from CAT, AAPL, MMM, EBAY and ISRG pushed the SPX through 950 resistance to the 980 area. Negative reactions to earnings from MSFT, AMZN, BRCM and NFLX kept the SPX in the 980 area on July 24 and during the first half of the week of July 27. On Thursday July 30 continued strength in AAPL, GOOG, CAT, MMM and IBM pushed the SPX to 996 where profita takers again pushed back the index. Negative reaction to earnings from FSLR, SYNA, AKAM and GPRO kept the indices near breakeven on Friday. When an area of resistance is broken price is likely to rise to the next area of resistance. Once at the new resistance price will either break out and go higher of fail to break resistance and pull back. When the SPX broke the 950 resistance area it gave us the 1,000 to 1,007 as the next horizontal resistance area. As of Thursday the SPX came within 11 points of the price target. On Monday look for the SPX to make another move to the 1,000 to 1,007 resistance area. If it breaks then there are two price target areas 1,025 which is the 950 break out target price and 1,075 which is the 875 resistance break out target price. If the SPX fails to break 1,007 look for a pull back to take place. The 950 area is both horizontal support and the 38.2% Fib retracement. At current VIX levels a 38 to 40 point pull back is a realistic weekly trading range in the SPX. Week of July 13 (click image to enlarge) Week of July 20 (click image to enlarge) Week of July 20 (click image to enlarge) Week of July 27 (click image to enlarge) Stocks to Watch on Monday Leading Stocks Holding Above 30 DMA PWRD, K, CPLA, ACN, PSYS, MHS, SLGN, AMED, ALGT, PPD, AMX, NFLX, BYI, CTSH, AAPL, DLTR, ESRX, PETS, USD, BIDU, FUQI, GMCR, HLF JOSB, AMZN, ATW, BAP, CAM, DLB, EBAY, FAS, GES, GILD, JCOM, NIHD, ORCL, PCLN, RCI, SNHY, TDG, TRLG, UYG, WRC, ESI, MOS, MUR, WCG, SNA, X, CBST, CHL, SWN, WAB, BLUD, CLB, HDB, JOYG, PCP, RIMM, URE, WMT, EZPW, MON, RBN, STRA, AFAM, CHL, FLS, PWR, VAR, SPWRA, BKC, DV, GR, CLB, HANS Moving Above 30 DMA = 3 BIIB, GXDX, JEC Moving Below 30 DMA = 4 FSLR, GPRO, SYNA, VPRT Staying Below 30 DMA BDX, GME, JW.A, DECK, HDB, MCD, FAZ, APEI, NTLS, ICE, MYGN Intermediate Term Market Trend: Neutral Short Term Market Trend: Up

Futures Pointing to a Slightly Lower Open...

9:31 am ET - AAPL, BIDU and GOOG are up at the open... BMO – ES -2.25 and NQ -4.25 futures are slightly lower in pre-market trading pointing to a flat to lower open. FSLR reported improved earnings after the close yesterday and is gapping down in pre-market trading. AAPL and BIDU are trading slightly lower in pre-market trading. Earnings of Interest Post Earnings WYNN -1.67% pre-market DLB +0.99% pre-market GPRO -12.27% pre-market VPRT -6.35% pre-market DIS -3.62% pre-market FSLR -10.79% pre-market Friday: CVX, DRYS Look at these Charts… (click image to enlarge) At the Open on Friday SPY – QQQQ – BIDU – ADBE – AAPL – PCLN – NFLX – EBAY – FUQI – PWRD – GMCR – BDK – FAS – FAZ – BAC – ZION – STT – JOYG – X – GES – ISRG – FSLR –

Thursday, July 30, 2009

SPX Rises Again...

I just returned from teaching a two day AT Workshop in Chicago to 420 traders...I will post in the next several minutes... DJIA + 83.74, +0.92% SP500 + 11.60, +1.19% NASDAQ Comp. + 16.54, +0.84% Russell 2000 + 9.42, +1.72% Exchange NYSE NASD Advancing 2,470 1,850 Declining 557 848 Oil $66.94 +$3.59 Gold $934.90 +$7.70 SOX 301.05 +0.40 VIX 25.40 -0.21 The VIX moved down and did confirm the move up in the SPX on Thursday. Strongest Sectors: XLB +3.04%...XLF +2.30%...XLI +1.62% Weakest Sectors: XLP -0.12%...XLV +0.14%...XLK +0.51% Eight of nine sectors moved higher on Thursday. Materials, Financials, Industrials, Consumer Discretionary, Utilities and Energy were stronger than the SPX +1.19%. Financial stocks stronger than XLF +2.30%: RF, ZION, AFL, KEY, SCHW, MS, IVZ, USB, MET SPG, PRU, BACK ICE, CME, NTRS and ETFs UYG and FAS. Tech stocks stronger than XLK +0.51%: AMT, MA, GOOG, AAPL, T, HPQ, EBAY, CSCO, VZ, GLW, ADBE, ORCL, QCOM and IBM. Sector Watch Up Trending: XLK Horizontal Breakout: XLB, XLY Sideways: XLE, XLV, XLF, XLP, XLI, XLU Down Trending: SPX Key resistance levels: 1,007 = November horizontal Key support levels: 982 = Monday's high 962 = 161.8% Fib extension 944 – 956 = old January/June/July resistancel 930 = horizontal 920 = horizontal end of May high 917 = 50 DMA Earnings of Interest Post Earnings AKAM -19.07% FISV -5.13% GMR -6.94% BDX -8.44% WYNN +13.18% DLB +3.03% after hours GPRO -8.94% after hours VPRT -6.40% after hours DIS -3.13% after hours Friday: CVX, DRYS The SPX and other broad indices broke out of this week’s consolidation pattern. The SPX went to its measuring distance price target of 996 and then profit takers stepped in and the index sold off. I taught this technique in my Workshop yesterday and applied it on the SPX chart at the open when the index was around 984 and calculated a price target of 996. The class was pretty amazed when the SPX went to 996 later in the morning and then sold off. The SPX trading range expanded to 20 points expanding this weeks trading range to 28 points. AAPL rose 2.76 and QCOM was up 27 cents. GOOG rose $9.40 and BIDU was up $7.29. Strong Nasdaq 100 stocks included WYNN, EXPE, XRAY, LINTA, PCAR, ORLY, FSLR, URBN, NIHD SBUX, STLD, GENZ, JOYG and FWLT. Watch Monday’s high of 982 as short term support, Stocks to Watch on Friday Leading Stocks Holding Above 30 DMA PWRD, K, CPLA, ACN, PSYS, MHS, SLGN, AMED, ALGT, PPD, AMX, NFLX, BYI, CTSH, AAPL, DLTR, ESRX, PETS, USD, BIDU, FUQI, GMCR, HLF JOSB, AMZN, ATW, BAP, CAM, DLB, EBAY, FAS, GES, GILD, JCOM, NIHD, ORCL, PCLN, RCI, SNHY, TDG, TRLG, UYG, WRC, ESI, MOS, MUR, WCG, SNA, X, CBST, CHL, SWN, WAB, BLUD, CLB, HDB, JOYG, PCP, RIMM, URE, WMT, EZPW, MON, RBN, STRA, AFAM, CHL, FLS, PWR, VAR, FSLR, SPWRA, BKC, GPRO, SYNA, DV, GR Moving Above 30 DMA = 3 CLB, HANS, VPRT Moving Below 30 DMA = 2 BDX, BIIB Staying Below 30 DMA GME, JW.A, DECK, JEC, HDB, MCD, FAZ, APEI, NTLS, GXDX, ICE, MYGN Intermediate Term Market Trend: Neutral Short Term Market Trend: Up

Futures Pointing to a Higher Open...

BMO – ES +7 and NQ +9 futures are higher in pre-market trading pointing to a higher open. The current pattern on the daily chart for the indices and futures is essentially a pennant or horizontal bull flag. This morning in overnight trading the futures are pushing to a new high. If the futures hold their gains and the cash market opens higher this could be a pattern break out that leads the market closer to the next horizontal resistance of 1,000 to 1,007 on the SPX. Earnings of Interest Watch these stocks that reported earnings on Wednesday: after hours change AKAM -11.27% CERN -4.04% ESRX +1.81% DAVE +2.34% FISV -3.85% GMR -6.04% Thursday: BDX, DLB, GPRO, MET, VPRT, DIS, WYNN At the Open on Thursday SPY – QQQQ – BIDU – FUQI – GMCR – SHLD – BDK – FAS – FAZ – JOYG – STT – X – ADBE – AAPL – PCLN – GES – NFLX – PWRD – ALGT – JOSB – PRU – ARO – ISRG – FSLR – EBAY –

Wednesday, July 29, 2009

SPX Holds Above Short Term Support, Again...

DJIA - 26.00, -0.29% SP500 - 4.47, -0.46% NASDAQ Comp. - 7.75, -0.39% Russell 2000 - 3.57, -0.65% Exchange NYSE NASD Advancing 1,082 1,020 Declining 1,860 1,641 Oil $63.35 -$3.88 Gold $927.20 -$11.90 SOX 300.65 -2.60 VIX 25.61 +0.60 The VIX moved up and did confirm the move down in the SPX on Wednesday. Strongest Sectors: XLP +0.53%...XLf +0.00%...XLP -0.07% Weakest Sectors: XLE -2.31%...XLB -2.10%...XLY -0.52% Seven of nine sectors moved lower on Wednesday. Consumer Staples, Financials, Industrials Healthcare and Technology were stronger than the SPX -0.46%. Financial stocks stronger than XLF +0.00%: C, MMC, AOC, ICE, STT, BK, BAC, NTRS, CME, TROW, AXP and CB. Tech stocks stronger than XLK -0.10%: VZ, AMAT, T, ADP, MSFT, MA, HPQ, EMC, SYMC, INTC, AAPL and IBM. Sector Watch Up Trending: XLK Horizontal Breakout: XLB, XLY Sideways: XLE, XLV, XLF, XLP, XLI, XLU Down Trending: SPX Key resistance levels: 980 = Thursday’s high 1,007 = November horizontal Key support levels: 962 = 161.8% Fib extension 944 – 956 = old January/June/July resistancel 930 = horizontal 920 = horizontal end of May high 917 = 50 DMA Post Earnings MEE +6.82% USNA +4.86% WCG +14.17%% Earnings of Interest Wednesday: AKAM -11.27% after hours CERN -4.04% after hours ESRX +1.81% after hours DAVE +2.34% after hours FISV -3.85% after hours GMR -6.04% after hours Thursday: BDX, DLB, GPRO, MET, VPRT, DIS, WYNN Friday: CVX, DRYS The SPX, COMPQ, DJIA and RUT all found support near Tuesday’s low. All four indices rallied from their low and formed a hanging man candle. The SPX, DJIA and RUT confirmed Tuesday’s hanging man but failed to break support. The SPX trading range was 9 points continuing this week’s narrow daily range. Buyers and sellers were again fairly balanced for the fourth day in a row. AAPL rose 3 cents and QCOM closed down 11 cents. GOOG sold off $3.61 and BIDU was down $6.60. Strong Nasdaq 100 stocks included LIFE, APOL, TEVA, FISV, PPDI, LOGI, AMAT, ADP and CHKP. Watch Friday’s low and Thursday’s S1 as short term support and Tuesday’s high as short term resistance. We continue to observe the Yellow Alert with Monday or Tuesday being the high day in the broad indices. Stocks to Watch on Thursday Leading Stocks Holding Above 30 DMA PWRD, K, CPLA, ACN, PSYS, MHS, SLGN, AMED, ALGT, PPD, AMX, NFLX, BYI, CTSH, AAPL, BDX, DLTR, ESRX, PETS, USD, BIDU, FUQI, GMCR, HLF JOSB, AMZN, ATW, BAP, CAM, DLB, EBAY, FAS, GES, GILD, JCOM, NIHD, ORCL, PCLN, RCI, SNHY, TDG, TRLG, UYG, WRC, ESI, MOS, MUR, WCG, SNA, X, CBST, CHL, SWN, WAB, BLUD, CLB, HDB, JOYG, PCP, RIMM, URE, WMT, EZPW, MON, RBN, STRA, AFAM, BIIB, CHL, FLS, PWR, VAR, FSLR, SPWRA, BKC, GPRO, SYNA, DV Moving Above 30 DMA = 1 GR Moving Below 30 DMA = 4 CLB, GME, JW.A, VPRT Staying Below 30 DMA DECK, JEC, HANS, HDB, MCD, FAZ, APEI, NTLS, GXDX, ICE, MYGN Intermediate Term Market Trend: Neutral Short Term Market Trend: Up

Futures Pointing to a Slightly Lower Open...

BMO – ES -4 and NQ -4 futures are slightly lower in pre-market trading pointing to a flat to slightly lower open. Watch Friday to Monday's support lows and Thursday's S1 levels... Earnings of Interest Watch these stocks that reported earnings on Tuesday: MEE +5.19% after hours USNA +7.11% after hours WCG +22.90% after hours Wednesday: AFL, AEM, AKAM, CERN, ESRX, XOM, DAVE, FISV, GMR, MA, OII, STRA, V At the Open on Wednesday SPY – QQQQ – BIDU – FUQI – GMCR – SHLD – BDK – FAS – FAZ – JOYG – STT – X – ADBE – AAPL – PCLN – GES – NFLX – PWRD – ALGT – JOSB – PRU – ARO – ISRG – FSLR – EBAY –

Tuesday, July 28, 2009

Nasdaq and RUT New High Close...Support Holds Again...

DJIA - 11.79, -0.13% SP500 - 2.56, -0.26% NASDAQ Comp. + 7.62 +0.39% Russell 2000 + 1.07, +0.19% Exchange NYSE NASD Advancing 1,342 1,468 Declining 1,634 1,215 Oil $67.23 -$1.15 Gold $939.10 -$14.40 SOX 303.25 +0.61 VIX 25.01 +0.73 The VIX moved up and did confirm the move down in the SPX on Tuesday. Strongest Sectors: XLV +0.68%...XLK +0.20%...XLP +0.12% Weakest Sectors: XLU -1.63%...XLE -1.46%...XLB -0.83% Three of nine sectors moved higher on Monday. Healthcare, Technology, Consumer Staples, Industrials and Financials were stronger than the SPX -0.26%. Financial stocks stronger than XLF -0.24%: C, PNC, BAC,AOC, WFC, ZION, SCHW and JPM. Tech stocks stronger than XLK +0.20%: GLW, DELL, MSFT, YHOO, VZ, ORCL, EMC, ADP, TXN, AMAT, CSCO, HPQ, EBAY and AMT. Sector Watch Up Trending: XLK Horizontal Breakout: XLB, XLY Sideways: XLE, XLV, XLF, XLP, XLI, XLU Down Trending: SPX Key resistance levels: 980 = Thursday’s high 1,007 = November horizontal Key support levels: 962 = 161.8% Fib extension 944 – 956 = old January/June/July resistancel 930 = horizontal 920 = horizontal end of May high 917 = 50 DMA Earnings of Interest Tuesday: MEE +5.19% after hours USNA +7.11% after hours WCG +22.90% after hours Wednesday: AFL, AEM, AKAM, CERN, ESRX, XOM, DAVE, FISV, GMR, MA, OII, STRA, V Thursday: BDX, DLB, GPRO, MET, VPRT, DIS, WYNN Friday: CVX, DRYS The SPX, DJIA and RUT all ran into resistance at Monday’s highs and found support at or above Friday’s low and stayed above Thursday’s S1 level. The SPX and DJIA formed a hanging man pattern and the RUT formed a spinning top. The Nasdaq went 7 points above Monday’s high while the Nasdaq 100 closed above 1,600 for the second time in four days and made a new high close. The SPX trading range was 13 points following Monday’s 10 point range. Buyers and sellers are fairly balanced for the third day in a row. AAPL and QCOM closed down 10 and 12 cents. GOOG sold off $4.95 and BIDU was down $5.70. Strong Nasdaq 100 stocks included CHKP, TEVA, CELG, STLD, STX, EXPE, CEPH, MRVL, AMGN, NTAP, ISRG and CTXS. Financial stocks started strong and ended mixed. Watch Friday’s low and Thursday’s S1 as short term support and Tuesday’s high as short term resistance. We continue to observe the Yellow Alert for short term traders with Monday or Tuesday being the high day in the broad indices. Stocks to Watch on Wednesday Leading Stocks Holding Above 30 DMA PWRD, K, CPLA, ACN, PSYS, MHS, SLGN, AMED, ALGT, PPD, AMX, NFLX, BYI, CTSH, AAPL, BDX, DLTR, ESRX, PETS, USD, BIDU, FUQI, GMCR, HLF JOSB, AMZN, ATW, BAP, CAM, DECK, DLB, EBAY, FAS, GES, GILD, JCOM, NIHD, ORCL, PCLN, RCI, SNHY, TDG, TRLG, UYG, WRC, ESI, MOS, MUR, WCG, SNA, X, CBST, CHL, SWN, WAB, BLUD, CLB, HDB, JOYG, PCP, RIMM, URE, WMT, EZPW, GME, MON, RBN, STRA, AFAM, BIIB, CHL, CLB, FLS, JEC, PWR, VAR, VPRT, FSLR, JW.A, SPWRA, BKC, GPRO, SYNA Moving Above 30 DMA = 1 DV Moving Below 30 DMA = 2 DECK, JEC Staying Below 30 DMA GR, HANS, HDB, MCD, FAZ, APEI, NTLS, GXDX, ICE, MYGN Intermediate Term Market Trend: Neutral Short Term Market Trend: Up

Futures Pointing to a Lower Open...

1:10 pm ET - The indices have moved toward Monday's low but have stayed above that short term support level...Healthcare is positive while Technology and Financials are down only modestly...Energy, Utilities and Materials are the weakest sectors keeping the market slightly negative...I'm traveling today for a Workshop in Chicago...stay tuned 9:40 am ET - Our virtural trade from our Monday night AT webcast on ZION filled this morning at 1.05 just after the open... Look at these Charts... (click image to enlarge) BMO – ES -7 and NQ -8 futures lower in pre-market trading pointing to a lower open. Remember Monday is the high day, watch for a potential break of the low of the high day. Earnings of Interest Tuesday: MEE, MHS, PNRA, X, USNA, WCG At the Open on Tuesday SPY – QQQQ – BIDU – FUQI – GMCR – SHLD – BDK – FAS – FAZ – JOYG – STT – X – ADBE – AAPL – PCLN – GES – NFLX – PWRD – ALGT – JOSB – PRU – ARO – ISRG – FSLR – EBAY –

Monday, July 27, 2009

SPX New High Close...Barely...

DJIA + 15.27, +0.17% SP500 + 2.92, +0.30% NASDAQ Comp. + 1.93, +0.10% Russell 2000 + 2.42, +0.44% Exchange NYSE NASD Advancing 1,936 1,513 Declining 1,053 1,168 Oil $68.38 +$0.33 Gold $953.50 +$0.40 SOX 302.64 +1.76 VIX 24.28 +1.19 The VIX moved up and did NOT confirm the move up in the SPX on Monday. Strongest Sectors: XLF +1.61%...XLI +0.56%...XLY +0.40% Weakest Sectors: XLP -0.37%...XLU -0.24%...XLV -0.07% Five of nine sectors moved higher on Monday. Financials, Industrials, Consumer Discretionary and Energy, were stronger than the SPX +0.30%. Financial stocks stronger than XLF +1.61%: ZION, RF, KEY, BAC, WFC, AFL, SPG, SCHW, PNC, TROW, PRU and ETFs UYG and FAS. Tech stocks stronger than XLK -0.01%: EBAY, MA, DELL, EMC, T, AMAT, INTC, HPQ, ADP, AAPL and IBM. Sector Watch Up Trending: XLK Horizontal Breakout: XLB, XLY Sideways: XLE, XLV, XLF, XLP, XLI, XLU Down Trending: SPX Key resistance levels: 980 = Thursday’s high 1,007 = November horizontal Key support levels: 962 = 161.8% Fib extension 944 – 956 = old January/June/July resistancel 930 = horizontal 920 = horizontal end of May high 917 = 50 DMA Earnings of Interest Tuesday: MEE, MHS, PNRA, X, USNA, WCG Wednesday: AFL, AEM, AKAM, CERN, ESRX, XOM, DAVE, FISV, GMR, MA, OII, STRA, V Thursday: BDX, DLB, GPRO, MET, VPRT, DIS, WYNN Friday: CVX, DRYS The SPX, DJIA and RUT all formed higher lows and higher highs, closed at or near their high of the day and formed a hanging man pattern. The Nasdaq formed a hanging man pattern an inside day relative to Thursday’s large white candle. While the SPX and other indices just inched higher, a sign of slowing upward momentum, sellers have not been able to push prices below support. Monday is a high day. Short term traders watch for a break of the low of the high day. This would count as a Yellow Alert once again. AAPL barely closed higher, GOOG formed an inside day, BIDU and QCOM each formed a spinning top. Financial stocks which have been in a very sideways trading range since May were the strongest sector once again. If financial stocks continue to gain strength that could be the underlying catalyst for the SPX to push to its next resistance area of 1,000 – 1,007. Stocks to Watch on Tuesday Leading Stocks Holding Above 30 DMA PWRD, K, CPLA, ACN, PSYS, MHS, SLGN, AMED, ALGT, PPD, AMX, NFLX, BYI, CTSH, AAPL, BDX, DLTR, ESRX, PETS, USD, BIDU, FUQI, GMCR, HLF JOSB, AMZN, ATW, BAP, CAM, DECK, DLB, EBAY, FAS, GES, GILD, JCOM, NIHD, ORCL, PCLN, RCI, SNHY, TDG, TRLG, UYG, WRC, ESI, MOS, MUR, WCG, SNA, X, CBST, CHL, SWN, WAB, BLUD, CLB, HDB, JOYG, PCP, RIMM, URE, WMT, EZPW, GME, MON, RBN, STRA, AFAM, BIIB, CHL, CLB, FLS, JEC, PWR, VAR, VPRT, FSLR, JW.A, SPWRA Moving Above 30 DMA = 3 BKC, GPRO, SYNA Moving Below 30 DMA = 2 DV, GR Staying Below 30 DMA HANS, HDB, MCD, FAZ, APEI, NTLS, GXDX, ICE, MYGN Intermediate Term Market Trend: Neutral Short Term Market Trend: Up

Futures Pointing to a Flat to Lower Open...

3:20 pm ET - Broad indices have rallied from their low of the day to near breakeven...both the SPX and RUT are down less than 1 point...we'll see you this evening our end of day post... 10:30 am ET - It has been a volitile first hour of trading...the VIX +1.31 is up to 24.40 and the SPX -5.45 is down...the NQ futures had two 10 point swings from 1,590 to 1,600 in the first 35 minutes before breaking 1,590 and dropping to 1,581...so far this morning that round number 1,600 resistance is holding...Key stocks AAPL and BIDU gave back their early gains and have turned negative ...FSLR is still up for the morning but gave back about $5 of early trading gains...FUQI rose to horizontal resistance and pulled back just like the Nasdaq...the broad indices are holding above Friday's lows... BMO – ES -3and NQ -2 futures are flat in pre-market trading pointing to a flat to lower open. Futures were flat but have started modestly to drop about 10 minutes before the open. Thursday and Friday's high is an area of short term resistance. Earnings of Interest Monday: AMED, AMGN, JEC, TEVA, VLO Look at these Charts… (click image to enlarge) At the Open on Monday SPY – QQQQ – BIDU – FUQI – GMCR – SHLD – BDK – FAS – FAZ – JOYG – STT – X – ADBE – AAPL – PCLN – GES – NFLX – PWRD – ALGT – JOSB – PRU – ARO – ISRG – FSLR – EBAY –

Saturday, July 25, 2009

Friday, July 24, 2009

SPX Closes at New High Close...Stays Above S1...

DJIA + 23.95, +0.26% SP500 + 2.97, +0.30% NASDAQ Comp. - 7.64, -0.95% Russell 2000 + 2.61, +0.48% Exchange NYSE NASD Advancing 1,904 1,468 Declining 1,096 1,193 Oil $68.05 +$0.89 (Sep. contract) Gold $953.10 -$1.70 SOX 300.88 -3.84 VIX 23.09 -0.34 The VIX moved down and did confirm the move up in the SPX on Friday. This is the lowest close in the VIX since September 8, 2008. Strongest Sectors: XLV +1.75%...XLU +1.58%...XLE +1.05% Weakest Sectors: XLK -0.60%...XLF -0.56%...XLY -0.08% Six of nine sectors moved higher on Thursday. Healthcare, Utilities, Energy, Consumer Staples and Materials were stronger than the SPX +0.30%. Financial stocks stronger than XLF -0.56%:CB, MET, PRU, USB, ALL, TRV, AFL, RF, STT, AXP, MMC, GS, ICE and ETFs UYG and FAS. Tech stocks stronger than XLK -0.60%:ADP, GOOG, AAPL, GLW, TXN, ADBE, VZ, YHOO, ORCL, IBM, DELL, HPQ, CSCO, QCOM, T, MA, EMC and SYMC. Sector Watch Up Trending: XLK Horizontal Breakout: XLB, XLY Sideways: XLE, XLV, XLF, XLP, XLI, XLU Down Trending: SPX Key resistance levels: 980 = Thursday’s high 1,007 = November horizontal Key support levels: 962 = 161.8% Fib extension 944 – 956 = old January/June/July resistancel 930 = horizontal 920 = horizontal end of May high 917 = 50 DMA How Did You Do This Week? In last Friday’s post, July 17, (See post here: http://chartsignals.blogspot.com/2009/07/markets-mixed-on-options-expiration.html) I wrote: “So with the SPX and broad indices at resistance what are the catalysts for the next week? Earnings...yes, we are still in the midst of earnings season and hundreds of companies report next week. Key companies reporting include: Tuesday: AAPL, CAT, GENZ, MRK, MS, BTU, YHOO, WFC Wednesday: F, GR, ISRG, MOS, UNP Thursday: AMZN, BIDU, AXP, BNI, DECK, MSFT, MCD, NFLX, POT Friday: BDK, WYNN The earning reports and managements comments about the third quarter and the second half of the year will be central to the Street's action next week. The strength of the earnings and comments can either drive this market through resistance or turn the market down from resistance. The SPX, Nasdaq and the RUT all formed an inside day on Friday with Thursday the high day. Watch Thursday's S1 level and for potential confirmation of what was essentially a bearish harami on Friday. We are on Yellow Alert on Monday Technically the chart suggests this market is more likely to move down than up. However one of the core tenets of technical analysis states: Market Action Discounts Everything. New information will be coming into the market next week which could drive the market higher or lower. No one can see the future so you must be ready for the break out to the upside or the selloff from resistance.” My questions today are: How did you do? Were you prepared? Were you aware and mentally flexible enough to trade when the breakout happened? If not, it is good to be aware. Dave's Insight: "Only when you are aware of your weaknesses as a trader, can you begin to consciously make the necessary changes to turn your weaknesses into strengths." Each of the broad indices stayed above the S1 level of Thursday's large white candle. This confirms the up trend. When a breakout of resistance occurs the most likely outcome is that price will rise to the next resistance level. In the case of SPX this is the 1,000 to 1,007 area. Friday was a pause day that absorbed the sell off in MSFT, AMZN and BRCM without breaking S1 again a positive sign. If the SPX rises to the 1,007 area, price will either bounce down or breakout. We will look to Monday's action to see if the short term up trend continues. BIDU and FSLR continued to move higher as GOOG continued its support bounce that started on Thursday. (click image to enlarge) Here is a list at some of the earnings that will have an impact on price action beginning on Monday. Earnings of Interest A few major companies will report earnings this week with a large number of second tier companies. Monday: AMED, AMGN, JEC, TEVA, VLO Tuesday: MEE, MHS, PNRA, X, USNA, WCG Wednesday: AFL, AEM, AKAM, CERN, ESRX, XOM, DAVE, FISV, GMR, MA, OII, STRA, V Thursday: BDX, DLB, GPRO, MET, VPRT, DIS, WYNN Friday: CVX, DRYS Stocks to Watch on Monday Leading Stocks Holding Above 30 DMA PWRD, K, CPLA, ACN, PSYS, MHS, SLGN, AMED, ALGT, PPD, AMX, NFLX, BYI, CTSH, AAPL, BDX, DLTR, ESRX, PETS, USD, BIDU, FUQI, GMCR, HLF JOSB, AMZN, ATW, BAP, CAM, DECK, DLB, EBAY, FAS, GES, GILD, JCOM, NIHD, ORCL, PCLN, RCI, SNHY, TDG, TRLG, UYG, WRC, ESI, MOS, MUR, WCG, SNA, X, CBST, CHL, SWN, WAB, BLUD, CLB, HDB, JOYG, PCP, RIMM, URE, WMT, DV, EZPW, GME, MON, RBN, STRA, AFAM, BIIB, CHL, CLB, FLS, JEC, PWR, VAR, VPRT Moving Above 30 DMA = 4 FSLR, JW.A, GR, SPWRA Moving Below 30 DMA = 2 HANS, HDB Staying Below 30 DMA MCD, FAZ, BKC, APEI, NTLS, SYNA, GXDX, ICE, MYGN, GPRO Intermediate Term Market Trend: Neutral Short Term Market Trend: Up

Futures Point to a Lower Open...

1:55 pm ET - The SPX near even and ES and NQ futures positive for the day...bounce off of S1 really works? 12:40 pm ET - Thursday in my stocks trading webcast I entered a real time virtual trade on GOOG at 7:44:33 am MT shortly after the open at 431.30. I was asked the question aren't you concerned entering this trade with the market have been up so many days in a row? My response was a swift and adamant, "No." I explained the reason why which essentially is unless your trading system has a specific rule to not take buy signals when the market is up so many days in a row a trader should take every buy signal as long as it meets the system rules. The stop was placed at 422.50 or a stop risk 8.80 per share. The Target 1 on the trade was the recent high of 445.75 and the Target 2 was the measuring distance of 468. GOOG closed at 437.34 or a gain of 6.04 per share. Today GOOG has risen to Target one at 445.75, another 8.41, for a total gain of 14.45. I am raising the stop to breakeven plus $1 or 432.30. The thought pattern behind the question I was asked yesterday is very detrimental to a trader's wealth. I will discuss this more in my Friday end of day post. 11:25 am ET - There appears to be some very positive developments this morning...Yesterday after trading for 11 1/2 weeks with a resistance level in the 930 to 955 range the SPX broke out of that resistance with its largest range up day since May 4. What does that mean? The SPX broke through with power...buying power. On a candlestick chart we call it a large white candle. The mid-section of a large white candle is a short term support level. We call it Support 1 or S1 for short. The open or the bottom of the body is Support 2 or S2 and the low of the day or the bottom of the lower shadow is Support 3 or S3. (click image to enlarge) Whenever the market makes a big move it is likely that it will take a rest shortly after. That rest can be simply a pause or pull back. The depth of the pull back gives us a sense of the strength or conviction of the buyers. If the pull back is modest to the S1 or above the buyers are willing to buy at higher prices. The higher the prices that buyers are willing to pay, the more convinced they are that prices are going higher. This should increase a trader's confidence in a the current up trend and the likelihood that the current move will continue to the next resistance level. Not withstanding the negative reaction to Thursday's earnings from MSFT, AMZN and BRCM, the SPX has been trading above Thursday's S1 all morning. This increases the probability that Thursday's breakout is a successful breakout, BIDU and BDK are making strong moves up after their earnings and AAPL, GOOG and ISRG are holding yesterday's gains and moving higher. BMO – ES -1.75 and NQ -7 futures are lower in pre-market trading pointing to a lower open. This is largely driven by MSFT, AMZN and BRCM which reported earnings after the close on Thursday and gapped lower. BIDU +4 which was lower in after hours is trading higher in pre-market trading. Other Nasdaq 100 stocks like AAPL, ISRG and QCOM are trading slightly lower in pre-market trading. DECK, BNI, AXP are also lower while MCD is slightly higher in pre-market trading. BDK which holds their conference call shortly after the open is higher in pre-market trading. Key Earnings Friday: BDK Look at these Charts… (click image to enlarge) (click image to enlarge) At the Open on Friday SPY – QQQQ – AMZN – MSFT – BRCM – BIDU – FUQI – GMCR – SHLD – BDK – AXP – BNI – DECK – FAS – FAZ – JOYG – STT – X – ADBE – AAPL – PCLN – GES – NFLX – PWRD – ALGT – JOSB – PRU – ARO – CAT – WFC – ISRG – QCOM –

Thursday, July 23, 2009

SPX Breaks Through Resistance...

DJIA + 188.03, +2.12% SP500 + 22.22, +2.33% NASDAQ Comp. + 47.22, +2.45% Russell 2000 + 17.15, +3.24% Exchange NYSE NASD Advancing 2,155 2,085 Declining 199 635 Oil $67.16 +$1.76 (Sep. contract) Gold $954.80 +$1.50 SOX 304.72 +2.95 VIX 23.43 -0.04 The VIX moved down and did confirm the move up in the SPX on Thursday. Strongest Sectors: XLB +3.41%...XLF +2.88%...XLE +2.84% Weakest Sectors: XLP +1.38%...XLK +1.96%...XLV +2.01% All nine sectors moved higher on Thursday. Materials, Financials, Energy, Utilities and Consumer Discretionary were stronger than the SPX +2.33%. Financial stocks stronger than XLF +2.88%: AFL, PRU, TROW, MET, KEY, RF, IVZ, ICE, BAC, MS, JPM, ALL, SPG, GS, TRV, ZION and ETFs UYG and FAS. Tech stocks stronger than XLK +1.96%: EBAY, EMC, VZ, SYMC, AMT, ADBE, T, MA, GOOG, TXN, CSCO, ORCL, GLW and HPQ. Sector Watch Up Trending: Horizontal Breakout: XLB, XLK, XLY Sideways: XLE, XLV, XLF, XLP, XLI, XLU Down Trending: SPX Key resistance levels: 980 = Thursday’s high 1,007 = November horizontal Key support levels: 962 = 161.8% Fib extension 944 – 956 = old January/June/July resistancel 930 = horizontal 920 = horizontal end of May high 917 = 50 DMA The SPX broke through the 955 horizontal resistance area rising in a strong to 979.42 before 976.29. Thursday morning MMM and POT rose after earnings following the price action of GS, INTC and IBM last week and AAPL on Tuesday. After the market closed MSFT, AMZN, BIDU, DECK, MCD, BNI and AXP reported earnings that sent the stocks and futures lower in after hours trading. After a string of positive earnings that sent the market higher and through the horizontal resistance of the past several months, will Thursday's after market close earning reports erase Thursday's gains and send the market back below the the 955 now support area? The strength of Thursday's breakout indicates the big money conviction of the move that began in early March and appears more likely to hold. A trader must however be prepared on every breakout for a potential failure. Look for Thursday's Earnings stocks to open lower Friday morning and watch how they trade. If they continue lower look for the broad indices to pull back. If they find support they may rise after the open like POT did on Thursday. Key Earnings Reactions Thursday: ISRG +26.84 CELG +18.63 EBAY +10.64% MMM +7.36% POT +7.70% AMZN -6.62% in after hours BIDU -1.78% in after hours AXP -4.96% in after hours BNI -2.15% in after hours DECK -9.22% in after hours MSFT -6.89% in after hours MCD -6.89% in after hours NFLX -0.99% in after hours Friday: BDK Stocks to Watch on Friday Leading Stocks Holding Above 30 DMA PWRD, K, CPLA, ACN, PSYS, MHS, SLGN, AMED, ALGT, PPD, AMX, NFLX, BYI, CTSH, AAPL, BDX, DLTR, ESRX, PETS, USD, BIDU, FUQI, GMCR, HLF JOSB, AMZN, ATW, BAP, CAM, DECK, DLB, EBAY, FAS, GES, GILD, JCOM, NIHD, ORCL, PCLN, RCI, SNHY, TDG, TRLG, UYG, WRC, ESI, MOS, MUR, WCG, SNA, X, CBST, CHL, SWN, WAB, BLUD, CLB, HDB, JOYG, PCP, RIMM, URE, WMT, DV, EZPW, GME, MON, RBN, STRA Moving Above 30 DMA = 11 AFAM, BIIB, CHL, CLB, FLS, HANS, HDB, JEC, PWR, VAR, VPRT Moving Below 30 DMA = 2 GR, MCD Staying Below 30 DMA FAZ, BKC, APEI, NTLS, SYNA, GXDX, ICE, JW.A, MYGN, GPRO, SPWRA, FSLR Intermediate Term Market Trend: Neutral Short Term Market Trend: Up

Futures Pointing to a Higher Open...

BMO – ES +6 and NQ +9 futures are higher in pre-market trading pointing to a higher open. Earnings will continue to be the catatylst for market movement. Overnight ISRG and EBAY gap up and QCOM is lower. Key Earnings Thursday: MMM, AMZN, BIDU, AXP, BNI, DECK, MSFT, MCD, NFLX, POT Look at these Charts… (click image to enlarge) At the Open on Thursday SPY – QQQQ – FUQI – GMCR – SHLD – FAS – FAZ – JOYG – STT – X – AMZN – ADBE – AAPL – PCLN – BIDU – GES – NFLX – PWRD – ALGT – JOSB – PRU – ARO – CAT – WFC – ISRG – QCOM –

Wednesday, July 22, 2009

Breakout or No Breakout...

DJIA - 34.68, -0.39% SP500 - 0.51, -0.05% NASDAQ Comp. + 10.18, +0.53% Russell 2000 + 3.48, +0.66% Exchange NYSE NASD Advancing 1,477 1,632 Declining 1,105 1,027 Oil $65.40 -$0.21 (Sep. contract) Gold $953.30 +$6.40 SOX 301.77 +7.80 VIX 23.47 -0.40 The VIX moved down and did confirm the move up in the SPX on Wednesday. This is the lowest close on the VIX since September 8, 2008. Strongest Sectors: XLY +1.03%...XLK +0.70%...XLI +0.31% Weakest Sectors: XLE -0.91%...XLU -0.53%...XLV -0.37% Six of nine sectors moved higher on Wednesday. Consumer Discretionary, Technology, Industrials, Materials, Financials and Consumer Staples were stronger than the SPX -0.05%. Financial stocks stronger than XLF +0.08%: KEY, C, USB, ZION, RF, TRV, ALL, CV, TROW, STT, SPG, NTRS, AFL, GS, MMC, BAC, IVZ, PRU and ETF FAS. Tech stocks stronger than XLK +0.70%:YHOO, AAPL, AMAT, EBAY, INTC, AMT, T, TXN, QCOM and SYMC. Sector Watch Up Trending: Horizontal Breakout: XLB, XLK, XLY Sideways: XLE, XLV, XLF, XLP, XLI, XLU Down Trending: SPX Key resistance levels: 944 – 956 = January/June horizontal 962 = 161.8% Fib extension Key support levels: 930 = horizontal 920 = horizontal end of May high 912 = 50 DMA 878 = 200 DMA 870 -875 = horizontal AAPL gapped up from strong earnings Tuesday evening and gave strength to the Nasdaq. The SPX finished flat. In after hours trading EBAY +4.73% and ISRG +17.42% were up. This should strengthen the Nasdaq at the open. The SPX keeps inching higher but so far has failed to clearly break resistance. Earnings have pushed the Nasdaq through resistance but so far have created enough buying to keep the broader indices at resistance but not quite enough to breakout to the upside. Short term traders stay on Yellow Alert prepared to trade up on a breakout and down on a break of the low of the high day. Look at these Charts... (click image to enlarge) Key Earnings Wednesday: BA -2.37% CME +1.52% after hours EBAY +4.73% after hours ESI +5.73% F +1.41% after hours ISRG +17.42% after hours MOS, QCOM, T, UNP, WLT Thursday: MMM, AMZN, BIDU, AXP, BNI, DECK, MSFT, MCD, NFLX, POT Friday: BDK, WYNN Stocks to Watch on Thursday Leading Stocks Holding Above 30 DMA PWRD, K, CPLA, ACN, PSYS, MHS, SLGN, AMED, ALGT, PPD, AMX, NFLX, BYI, CTSH, AAPL, BDX, DLTR, ESRX, PETS, USD, BIDU, FUQI, GMCR, GR, HLF JOSB, AMZN, ATW, BAP, CAM, DECK, DLB, EBAY, FAS, GES, GILD, JCOM, NIHD, ORCL, PCLN, RCI, SNHY, TDG, TRLG, UYG, WRC, ESI, MOS, MUR, WCG, SNA, X, CBST, CHL, SWN, WAB, MCD, BLUD, CLB, HDB, JOYG, PCP, RIMM, URE, WMT, DV, EZPW, GME, MON, RBN, STRA Moving Above 30 DMA = 0 Moving Below 30 DMA = 3 CHL, CLB, HDB Staying Below 30 DMA VPRT, AFAM, FAZ, BKC, APEI, NTLS, SYNA, GXDX, ICE, JW.A, MYGN, PWR, GPRO, JEC, BIIB, FLS, VAR, SPWRA, FSLR, HANS Intermediate Term Market Trend: Neutral Short Term Market Trend: Up

Futures Point to a Lower Open...

BMO – ES -8 and NQ -6 futures are slightly lower in pre-market trading pointing to a lower open. AAPL is up $5.89 in pre-market trading. AAPL's 150 straddle was price at 13 yesterday so the gap is about half was priced in the options market. Watch AAPL, XLF and the futures until the open and then AAPL, the SPX and SPY to see if they are able to break the 955 resistance area. Financials including WFC -6.11% are trading lower this morning and could be the sector to pull the SPX down from resistance. Short term traders are still on Yellow Alert for a possible pullback at resistance. Be prepared for either direction at this key resistance level. Key Earnings Wednesday: F, GR, ISRG, MOS, UNP Look at these Charts… (click image to enlarge) At the Open on Wednesday SPY – QQQQ –
XLF - FUQI – GMCR – SHLD – FAS – FAZ – ESRX JOYG – STT – X – AMZN – ADBE – AAPL – PCLN – BIDU – GES – NFLX – PWRD – ALGT – INFY – JOSB – PRU – URBN – ARO – CAT – WFC -
GS -

Tuesday, July 21, 2009

SPX Rises Again, Forms Hanging Man...

DJIA + 67.79, +0.77% SP500 + 3.45, +0.36% NASDAQ Comp. + 6.91, +0.36% Russell 2000 - 1.74, -0.33% Exchange NYSE NASD Advancing 1,292 1,161 Declining 1,301 1,497 Oil $64.72 +$0.74 Gold $946.90 -$1.90 SOX 293.97 -0.16 VIX 23.87 -0.53 The VIX moved down and did confirm the move up in the SPX on Tuesday. Strongest Sectors: XLV +1.47%...XLB +1.18%...XLU +0.99% Weakest Sectors: XLF -0.90%...XLP -0.13%...XLY +0.00% Six of nine sectors moved higher on Tuesday. Healthcare, Materials, Utilities, Energy and Technology were stronger than the SPX +0.36%. Financial stocks stronger than XLF -0.90%: ALL, AFL, AXP, IVZ, CB, TRV, TROW, MMC, JPM, USB, GS, MET, SPG, BAC, AOC, PRU, NTRS, WFC and SCHW. Tech stocks stronger than XLK +0.57%: DELL, EMC, CSCO, QCOM, ORCL, VZ, MSFT and T. Sector Watch Up Trending: Horizontal Breakout: XLB, XLK, XLY Sideways: XLE, XLV, XLF, XLP, XLI, XLU Down Trending: SPX Key resistance levels: 944 – 956 = January/June horizontal 962 = 161.8% Fib extension Key support levels: 930 = horizontal 920 = horizontal end of May high 912 = 50 DMA 878 = 200 DMA 870 -875 = horizontal The SPX spent a third day in the 940 – 955 horizontal resistance area once again forming a new high close at 954.58. Its intraday high of 956.53 eclipsed the intraday high of 956.23 on June 11. The SPX did pull back to 943 before rallying for the last three hours of the trading day. AAPL earnings came after the close and gave at least a positive enough sense that the stock traded up $6.81 on 8.6 million shares in after-hours trading. The NQ futures responded by moving up about 5 points from their 4:15 pm ET close of 1,554.75. The ES futures are up just 0.25 points from their 4:15 pm ET close of 953.50. The SPY gained 26 cents in after-hours trading. Watch for pre-market trading on AAPL, ES and NQ futures. The strength of AAPL could be the catalyst for the SPX to break through horizontal resistance and make a move towards the 1,000 horizontal resistance from early November. Tuesday Earnings CAT rose 7.67% MRK rose 6.12% BTU fell -5.20 YHOO fell -3.22% after hours WFC rose 0.99% after hours Key Earnings Wednesday: F, GR, ISRG, MOS, UNP Stocks to Watch on Wednesday Leading Stocks Holding Above 30 DMA PWRD, K, CPLA, ACN, PSYS, MHS, SLGN, AMED, ALGT, PPD, AMX, NFLX, BYI, CTSH, AAPL, BDX, DLTR, ESRX, PETS, USD, BIDU, FUQI, GMCR, GR, HLF JOSB, AMZN, ATW, BAP, CAM, DECK, DLB, EBAY, FAS, GES, GILD, JCOM, NIHD, ORCL, PCLN, RCI, SNHY, TDG, TRLG, UYG, WRC, ESI, MOS, MUR, WCG, SNA, X, CBST, CHL, SWN, WAB, MCD, BLUD, CLB, HDB, JOYG, PCP, RIMM, URE, WMT Moving Above 30 DMA = 6 DV, EZPW, GME, MON, RBN, STRA Moving Below 30 DMA = 1 VPRT Staying Below 30 DMA AFAM, FAZ, BKC, APEI, NTLS, SYNA, GXDX, ICE, JW.A, MYGN, PWR, GPRO, JEC, BIIB, FLS, VAR, SPWRA, FSLR, HANS Intermediate Term Market Trend: Neutral Short Term Market Trend: Up

Futures Pointing to a Higher Open.,,

If pre-market trading holds until the open...look for the SPX to make a new intra-day high at the open compared with early June... BMO – ES +7 and NQ +6 futures are higher in pre-market trading pointing to a higher open. Watch for trading reaction today to CAT, MRK and BTU and watch for AAPL and other earnings after close...AAPL earnings and after-hours reaction will be key to wether the market breaks throught horizontal resistance and can move higher... CAT +4...earnings are out this morning and the stock is up+ in pre-market trading. MRK up 96 cents...earnings also having positive impact in pre-market trading. Key Earnings Tuesday: AAPL, CAT, GENZ, MRK, MS, BTU, YHOO, WFC Look at these Charts… (click image to enlarge) At the Open on Tuesday SPY – QQQQ – FUQI – GMCR - SHLD – FAS – FAZ – ESRX JOYG – STT – X – AMZN – ADBE – AAPL – PCLN – BIDU – GES – NFLX – PWRD – ALGT – INFY – JOSB – PRU – URBN – ARO – CAT -

Monday, July 20, 2009

SPX, Highest Close Since November 5, 2008...

DJIA + 104.21, +1.19% SP500 + 10.75, +1.14% NASDAQ Comp. + 22.68, +1.20% Russell 2000 + 7.74, +1.49% Exchange NYSE NASD Advancing 2,198 1,842 Declining 580 864 Oil $63.98 +$0.42 Gold $948.80 +$26.00 SOX 294.13 +3.64 VIX 24.40 +0.06 The VIX moved up and did NOT confirm the move up in the SPX on Monday. Essentially, the VIX was unchanged. Strongest Sectors: XLB +2.14%...XLY +2.10%...XLI +2.01% Weakest Sectors: XLV +0.23%...XLP +0.29%...XLU +0.75% All nine sectors moved higher on Monday. Materials, Consumer Discretionary, Industrials, and Energy were stronger than the SPX +1.14%. Financial stocks stronger than XLF +0.82%: ZION, SPG, AFL, IVZ, TROW, AXP, WFC, GS, USB, PRU, MET, ICE, CME, STT, PNC, MS and ETFs UYG and FAS. Tech stocks stronger than XLK +1.46%: CSCO, TXN, DELL, T, EMC, SYMC, GLW, EBAY, HPQ, YHOO, MSFT and AMAT. Sector Watch Up Trending: Horizontal Breakout: XLB, XLK, XLY Sideways: XLE, XLV, XLF, XLP, XLI, XLU Down Trending: SPX Key resistance levels: 944 – 956 = January/June horizontal 962 = 161.8% Fib extension Key support levels: 930 = horizontal 920 = horizontal end of May high 912 = 50 DMA 878 = 200 DMA 870 -875 = horizontal Key Earnings Tuesday: AAPL, CAT, GENZ, MRK, MS, BTU, YHOO, WFC Wednesday: F, GR, ISRG, MOS, UNP Thursday: AMZN, BIDU, AXP, BNI, DECK, MSFT, MCD, NFLX, POT Friday: BDK, WYNN The SPX spent a second day in the 940 – 955 horizontal resistance area forming a new high close which is the highest closing price since November 5, 2008. Technically speaking, a pullback at resistance is the most probable outcome at these price levels. However, there is a potential catalyst this week that was not present in May or June when the SPX was at this price level. What is the potential catalyst? Earnings… Remember one of the core tenets of technical analysis is: Market Action Discounts Everything. The market will discount either up or down the earnings information as it becomes known. Until then we must remain prepared to trade in either direction. Hundreds of companies will report earnings. After strong reports last week from GS, INTC and IBM, key stocks listed above report this week. Perhaps most pivotal is AAPL which will report after the close tomorrow. Some unexpected positive guidance for the third and fourth quarter could send AAPL and Nasdaq stocks higher and the SPX through resistance on Wednesday. Failure to have a positive surprise could cause AAPL to sell off like GOOG did on Friday and that could be the catalyst for a pullback from resistance. AAPL has had a strong move into its earnings release and could possibly deliver the “buy the rumor, sell the news” adage. Stocks to Watch on Tuesday Leading Stocks Holding Above 30 DMA PWRD, K, CPLA, ACN, PSYS, MHS, SLGN, AMED, ALGT, PPD, AMX, NFLX, BYI, CTSH, AAPL, BDX, DLTR, ESRX, PETS, USD, BIDU, FUQI, GMCR, GR, HLF JOSB, VPRT, AMZN, ATW, BAP, CAM, DECK, DLB, EBAY, FAS, GES, GILD, JCOM, NIHD, ORCL, PCLN, RCI, SNHY, TDG, TRLG, UYG, WRC, ESI, MOS, MUR, WCG, SNA, X, CBST, CHL, SWN, WAB, MCD Moving Above 30 DMA = 5 BLUD, CLB, HDB, PCP, URE Moving Below 30 DMA = 2 DV, STRA Staying Below 30 DMA AFAM, FAZ, BKC, APEI, NTLS, SYNA, GXDX, ICE, JW.A, JOYG, MYGN, PWR, GPRO, JEC, RBN, BIIB, FLS, VAR, RIMM, SPWRA, MON, EZPW, FSLR, WMT, HANS, GME Intermediate Term Market Trend: Neutral Short Term Market Trend: Up

Futures Pointing to a Higher Open...

3:15 pm ET - stocks have remained in a trading range in positivie territory on Monday...ES +9.25 is slightly above its opening level...AAPL rose to 155 before pulling back to 152.09...Big winners today were PWRD and FUQI...I closed a number of winning virtual trades from the different webcasts that I will summarize later today... BMO – ES +6 and NQ +5 futures are higher in pre-market trading pointing to a higher open. It is interesting that the ES is stronger than the NQ in pre-market trading. Watch to see if the indices make a high higher than Thursday or Friday...940 - 955 is horizontal resistance for the SPX...be mindful of the large number of earning announcements this week...AAPL is up almost $2 in pre-market trading... Financials XLF which were the weakest sector on Friday are up in pre-market trading... Tuesday: AAPL, CAT, GENZ, MRK, MS, BTU, YHOO, WFC Wednesday: F, GR, ISRG, MOS, UNP Thursday: AMZN, BIDU, AXP, BNI, DECK, MSFT, MCD, NFLX, POT Friday: BDK, WYNN Look at these Charts… (click image to enlarge) At the Open on Monday SPY – QQQQ – FUQI – GMCR – SHLD – FAS – FAZ – ESRX JOYG – STT – X – AMZN – ADBE – AAPL – PCLN – BIDU – GES – NFLX – PWRD – ALGT – INFY – JOSB – PRU – URBN – ARO –

Saturday, July 18, 2009

Friday, July 17, 2009

Markets Mixed on Options Expiration Friday...

DJIA + 32.12, +0.37% SP500 - 0.36, -0.04% NASDAQ Comp. + 1.58, +0.08% Russell 2000 - 2.80, -0.54% Exchange NYSE NASD Advancing 1,424 1,115 Declining 1,483 1,550 Oil $63.56 +$1.54 Gold $937.50 +2.10 SOX 290.49 +3.49 VIX 24.34 -1.08 The VIX moved down and did NOT confirm the move down in the SPX on Friday. Friday was the lowest close in the VIX since September 8, 2008. Strongest Sectors: XLK +0.96%...XLE +0.58%...XLB +0.49% Weakest Sectors: XLI -1.15%...XLF -0.65%...XLU -0.46% SPX Key resistance levels: 944 – 956 = January/June horizontal 962 = 161.8% Fib extension Key support levels: 930 = horizontal 920 = horizontal end of May high 912 = 50 DMA 878 = 200 DMA 870 -875 = horizontal The SPX had its biggest one week rise and its largest trading range 68.64 points since the week of March 9 when the current uptrend began. The SPX rose from 879 to 940 on the catalysts positive earnings on GS, INTC and IBM. The reaction to the INTC earnings and management's detailed guidance for the second half of the year drew stronger buying than most expected. We stated last week that positive earnings could be the catalyst to lift the market off support and that is exactly what happened. Even the selloff in GOOG on Friday in reaction to its earnings Thursday afternoon could not keep the NASDAQ down. AAPL was up again on Friday and along with INTC has been a driving force behind this week's rise. Of course 940 -955 is a strong horizontal resistance area that kept the SPX from going higher in June. With the market in a sideways trend or trading range the probabilities indicate a likely pull back. What do you see on these charts? (click image to enlarge) How about these? (click image to enlarge) And these? (click image to enlarge) Upward momentum slowed and then.... (click image to enlarge) And... (click image to enlarge) So with the SPX and broad indices at resistance what are the catalysts for the next week? Earnings...yes, we are still in the midst of earnings season and hundreds of companies report next week. Key companies reporting include: Tuesday: AAPL, CAT, GENZ, MRK, MS, BTU, YHOO, WFC Wednesday: F, GR, ISRG, MOS, UNP Thursday: AMZN, BIDU, AXP, BNI, DECK, MSFT, MCD, NFLX, POT Friday: BDK, WYNN The earning reports and managements comments about the third quarter and the second half of the year will be central to the Street's action next week. The strength of the earnings and comments can either drive this market through resistance or turn the market down from resistance. The SPX, Nasdaq and the RUT all formed an inside day on Friday with Thursday the high day. Watch Thursday's S1 level and for potential confirmation of what was essentially a bearish harami on Friday. We are on Yellow Alert on Monday Technically the chart suggests this market is more likely to move down than up. However one of the core tenets of technical analysis states: Market Action Discounts Everything. New information will be coming into the market next week which could drive the market higher or lower. No one can see the future so you must be ready for the break out to the upside or the selloff from resistance. We'll see you on Monday...

Stocks to Watch on Monday Leading Stocks Holding Above 30 DMA PWRD, K, CPLA, ACN, PSYS, MHS, SLGN, AMED, ALGT, PPD, AMX, NFLX, BYI, CTSH, AAPL, BDX, DLTR, ESRX, PETS, USD, BIDU, FUQI, GMCR, GR, HLF JOSB, VPRT, AMZN, ATW, BAP, CAM, DECK, DLB, EBAY, FAS, GES, GILD, JCOM, NIHD, ORCL, PCLN, RCI, SNHY, TDG, TRLG, UYG, WRC, ESI, MOS, MUR, WCG, SNA, X Moving Above 30 DMA = 7 CBST, CHL, DV, STRA, SWN, WAB, MCD Moving Below 30 DMA = 3 AFAM, CLB, URE Staying Below 30 DMA FAZ, BKC, APEI, NTLS, HDB, SYNA, GXDX, ICE, JW.A, JOYG, MYGN, PWR, GPRO, JEC, BLUD, RBN, BIIB, FLS, VAR, PCP, RIMM, SPWRA, MON, EZPW, FSLR, WMT, HANS, GME Intermediate Term Market Trend: Neutral Short Term Market Trend: Up

Futures Pointing to a Flat Open...

9:48 am ET - Both BAC and C reported positive earnings this morning and are trading a few cents higher in early trading. The broad indices are pulling back slightly in early trading while AAPL +2.00 is trading higher. BMO – ES -1 and NQ +1 futures are near unchanged in pre-market trading pointing to a flat open. It's options expiration Friday. Look at these Charts… (click image to enlarge) At the Open on Wednesday SPY – QQQQ – FUQI – GMCR – SHLD – FAS – FAZ – ESRX JOYG – STT – X – AMZN – ADBE – AAPL – PCLN – BIDU – GES – NFLX – PWRD – ALGT – INFY – JOSB – PRU – URBN – ARO –

Thursday, July 16, 2009

SPX Moves Higher...

DJIA +95.61 +1.11% SPX +8.06 +0.86% NASDAQ Comp. +22.13 +1.19% RUT +6.38 +1.24% Exchange NYSE NASD Advancing 2,077 1,677 Declining 875 972 Oil 62.02 +$0.48 Gold 935.40 -$4.00 SOX 287.00 +5.44 VIX 25.42 -0.47 The VIX moved lower and did confirm the move up in the SPX on Thursday. Strongest Sectors: XLI +1.84%...XLK +1.46%...XLY +1.24% Weakest Sectors: XLF -0.33%...XLU +0.04%...XLV +0.64% Eight of nine sectors moved higher on Thursday. Industrials, Technology, Consumer Discretionary, Energy and Materials were stronger than the SPX +0.86%. Financial stocks stronger than XLF -0.33%: AXP, SPG, MMC, GS, BK, AOC, ZION, IVZ, STT, TRV, MET, RF, PRU, USB, NTRS and ETFs UYG and FAS. Tech stocks stronger than XLK +1.46%: EBAY, AMAT, DELL, MA, ADBE, IBM, YHOO, EMC, GLW, INTC, HPQ, TXN and CSCO. Sector Watch Up Trending: Horizontal Breakout: XLB, XLK, XLY Sideways: XLE, XLV, XLF, XLP, XLI, XLU Down Trending: SPX Key resistance levels: 944 – 956 = January/June horizontal 962 = 161.8% Fib extension Key support levels: 930 = horizontal 920 = horizontal end of May high 912 = 50 DMA 878 = 200 DMA 870 -875 = horizontal The SPX rose to 943 before closing at 940.74. This is the SPX’s fourth highest close since November 5, 2008 only surpassed by three trading days in early June. We have maintained for weeks that the current chart pattern was a sideways trading range. Last week when we were loudest solo voice that this was likely a head and shoulders top, most people were licking their chops on the money they were going to make to the downside. We said in our Thursday webcast on July 9, like it or not the technical evidence does not suggest that a break of support is likely. We almost begged people to do the right thing and get long. We were almost the only up trending (what some call bullish) voice out there. We also said that the SPX was not likely to move more than 30 to 40 points unless there was a catalyst that got buyers going. We said that better than expected earnings could be that catalyst. What did the market do? Exactly what was most probable based on the chart. It bounced off of support, ironically with the strongest four day rise we have see since the week of March 9, the first week of the current four month up trend. The catalyst better than expected earning from GS and INTC spurring buying interest in financial and technology stocks including bands and semiconductor stocks. We have maintained for weeks that this sideways consolidation was a trend continuation pattern and that it would most likely resolve to the upside. The SPX is back up to the 940 – 950 resistance area and will need another positive catalyst to push through the two resistance formed in early July. The most likely source again is earnings. Thursday was a high day so it is important to realize if the market does not get another catalyst that today’s low represent an important short term support area for short term traders. While it is too early to say that Thursday’s low will be breached, we need to stay focused on it, if it is broken. Once again Yellow Alert. Friday is options expiration so be prepared for some extra volatility. Key Earnings and Economic Releases Friday: BAC, C Housing Starts Stocks to Watch on Friday Leading Stocks Holding Above 30 DMA PWRD, K, CPLA, ACN, PSYS, MHS, SLGN, AMED, ALGT, PPD, AMX, NFLX, BYI, CTSH, AAPL, BDX, DLTR, ESRX, PETS, USD, BIDU, FUQI, GMCR, GR, HLF JOSB, VPRT, AMZN, ATW, BAP, CAM, DECK, DLB, EBAY, FAS, GES, GILD, JCOM, NIHD, ORCL, PCLN, RCI, SNHY, TDG, TRLG, UYG, URE, WRC Moving Above 30 DMA = 8 AFAM, CLB, ESI, MOS, MUR, WCG, SNA, X Moving Below 30 DMA = 0 Staying Below 30 DMA FAZ, STRA, BKC, APEI, DV, NTLS, HDB, SYNA, CBST, CHL, GXDX, ICE, JW.A, JOYG, MCD, MYGN, PWR, GPRO, JEC, BLUD, RBN, BIIB, FLS, VAR, PCP, SWN, RIMM, SPWRA, MON, EZPW, WAB, FSLR, WMT, HANS, GME Intermediate Term Market Trend: Neutral Short Term Market Trend: Up