Modest Pullback at Horizontal Resistance...

DJIA - 50.71 -0.50% SP500 - 6.85 -0.62% COMPQ - 12.85 -0.59% Russell 2000 - 8.93 -1.43% Exchange NYSE NASD Advancing 1,047 741 Declining 2,007 1,987 Oil $79.09 -0.52 Gold $1,058.00 +0.50 SOX 326.87 -0.74 VIX 20.90 -0.59 The VIX moved down and did NOT confirm the move down in the SPX on Tuesday. The SOX moved down and did confirm the move down in the COMPQ. Strongest Sectors: XLP -0.11%...XLK -0.33%...XLE -0.64% Weakest Sectors: XLB -1.05%...XLY -1.01%...XLU -1.00% All nine sectors moved lower on Tuesday. Consumer Staples and Technology were stronger than the SPX -0.62%. Financial stocks stronger than XLF -0.78%: BK, KEY, RF, WFC, IVZ, PNC, JPM, USB, ICE, CME, TROW, GS, TRV and SCHW. Tech stocks stronger than XLK -0.33%: AAPL, TXN, HPQ, GLW, MSFT, T, DELL, GOOG, IBM, MA, and YHOO. Sector Watch Up Trending: XLK, XLB, XLY, XLV, XLP, XLE Horizontal Breakout: XLF, XLI, XLU Sideways: Down Trending: Key Resistance Levels: 1,100 = September 2008 Old Support 1,133 = Mid September 2008 Support Key Support Levels 1,075 = 875 Breakout Chart Target 1,061 = Sep 16 S1 Level 1,056 = Sep 25 R1 level 1,044 = October Horizontal Old Resistance 1,025 = 950 Breakout Chart Target The broad indices gave back most of Monday’s gain even after gains from AAPL and CAT. The SPX held above Monday’s (the high day) low, but has been trading sideways in a narrow range for four consecutive days. The SPX is once again forming a horizontal flag pattern. The last four times since June that this pattern has been formed that SPX followed with a short term pull back. The COMPQ, INDU and RUT are also in a horizontal trading range. AAPL and CAT reported stronger than expected earnings, gapped higher and pulled back from their opening price. This now means that AA, INTC, JPM, GOOG, AAPL and CAT have failed to close higher than their open. After the close YHOO, SNDK and CREE reported better than expected earnings and gapped higher. ISRG which after the close reported better than expected earnings initially traded higher and then reversed and moved lower. Tuesday’s Key Earnings: Symbol Earnings versus Estimates CAT 0.64 vs. 0.06 DD 0.45 vs. 0.33 BTU 0.49 vs. 0.22 UNH 0.89 vs. 0.77 UAUA -0.43 vs. -0.94 PCP 1.54 vs. 1.63 KO 0.82 vs. 0.82 WLT 0.45 vs. 0.27 STT 1.04 vs. 1.02 GILD 0.78 vs. 0.67 STX 0.58 vs. 0.47 BK 0.54 vs. 0.47 ISRG 1.64 vs. 1.48 YHOO 0.13 vs. 0.07 ALGT 0.68 vs. 0.63 AMLN -0.19 vs. -0.29 CREE adj. 0.30 vs. 0.22 BIIB 1.04 vs. 1.12 SNDK 0.75 vs. 0.26 Wednesday’s Key Earnings: WFC, MS, AMGN, BA, EBAY, GENZ, ESI, MCD, UPS, AMR, T, CHKP, LRCX, ATI Guidance: The intermediate term trend is STILL up. The SPX is again moving sideways at horizontal resistance. Monday is the high day. We are again on Yellow Alert for a short term pull back signaled by a break of the low of the high day. If you don’t see the horizontal pattern just look at the first two weeks of June and August, the last week of August and the middle of September. (click image to enlarge) We are continuing to see big money discount the new earnings information and future guidance each day. So far AA, INTC, JPM, GOOG and now AAPL and CAT have not been able to take the SPX through the 1,100 resistance. This is why it is important to be prepared for a potential pull back. Additional earnings will be out tomorrow, Thursday and Friday. Since the trend is up take breakout and support bounce entry signals as they occur, while also watching for short term exit signals in the event of the break of the low of the high day. Monday is the high day on the SPX, INDU and COMPQ. Check the chart you are trading. Follow your rules. Breakout: PCLN, CAT, ADSK, AAPL, JOYG, BUCY, HANS, FLS, AKAM, AMZN, CAM, FCX, JCG, GOOG, NWSA Potential Breakout Setups: ORCL, FLIR, WLT, DE, INTC, DD, ADBE, WHR, DOW, APOL, AXP, MA, V Pulling Back: BDK, NKE, BIDU, AGU, AMX, BAC Potential C Patterns: C Pattern Breakout: Lower Close in Support Bounce: SPG, ZION, FWLT, XLNX, MRVL, FAST, JCI, JEC, X Flag Setups and Bounces in Progress: NTAP, FSLR, AGCO, TXN, HOLX Potential Down Trend Setups: HOLX, STT, RIMM, MYGN, MON, LVS, WYNN AAPL +8.90 QCOM -0.75 GOOG -0.37 BIDU -2.30 NDX 100 stocks stronger than the NDX include: AAPL, APOL, CTSH, JNPR, FSLR, TEVA, PCAR, ISRG, BRCM, LRCX, CHRW, AMZN, EXPED, INFY, CHKP, JBHT, NVDA, MXIM, IACI, MSFT, STX, DELL and GOOG. Stocks to Watch on Wednesday Leading Stocks Holding Above 30 DMA CTSH, AAPL, PCLN, TDG, PCP, CLB, ESRX, NIHD, K, FLS, GXDX, BAP, WRC, BIDU, HDB, JW.A, ATW, EZPW, JOYG, TRLG, GPRO, PPD, DECK, VPRT, AMZN, GMCR, ACN, SLGN, FSLR, NFLX, HANS, DV, ESI, STRA, MCD, CPLA, HLF, SWN, AFAM, CAM, GES, ICE, UYG, AMX, APEI, BLUD, EBAY, FAS, MUR, SPWRA, CHL, BYI, WAB, MHS, GR, SNA, BKC, WMT, DLB, GILD, JOSB, MOS, WAB, MON, X, ORCL, FSLR, WRC, USD Moving Above 30 DMA = 2 ALGT, AMED Moving Below 30 DMA = 7 DLTR, GME, JEC, PCP, SNHY, URE, PWRD Staying Below 30 DMA PETS, WCG MON, X, PSYS, NTLS, PPD, FAZ, BDX, BIIB, JCOM, RCI, VAR, FUQI, CBST, RBN, RIMM, MYGN, PWR, SYNA Intermediate Term Market Trend: Up Short Term Market Trend: Neutral