SPX Rallies After Fed Raises Discount Rate...

DJIA 10,402.35 +9.45 +0.09% SP500 1,109.17 +4.42 +0.22% COMPQ 2,243.87 +2.16 +0.10% Russell 2000 631.62 +2.30 +0.37% Exchange NYSE NASD Advancing 1,798 1,405 Declining 1,235 1,249 Oil $80.06 +0.68 Gold $1,121.30 +3.30 SOX 343.54 +1.02 VIX 20.02 -0.61 Index Direction Confirmation VIX Down Yes – SPX SOX Up Yes – COMPQ Strongest Sectors: XLU +1.40%…XLB +0.56%...XLF +0.56% Weakest Sectors: XLK -0.27%...XLV +0.00%...XLP +0.22% Seven of nine sectors moved higher on Friday. Utilities, Materials, Financials, Industrials, Energy, Consumer Discretionary and Consumer Staples were stronger than the SPX +0.22%. Sector Watch Up Trending: XLK, XLY, XLV, XLI Horizontal Breakout: Sideways: XLF, XLE, XLU, XLP, XLB Down Trending: Key Resistance Levels: 1,105 - 1,113 = November High 1,119 = December High 1,025 - 1,133 = 1,075 BO chart target - Sep 08 Low Key Support Levels 1,101 = October High 1,087 = Nov 10 Channel low 1,082 = Nov 9 S1 level 1,075 = 875 Breakout Chart Target SP futures moved lower Thursday after the Fed announced after the close they are raising the discount rate to banks by ¼% from 0.50% to 0.75% effective Friday. By Friday morning futures had moved from being down 12 point to down 3 points. Futures and cash indexes moved higher Friday morning and then pulled back in the afternoon while still finishing up for the day. Tech stocks were the weakest sector Friday after DELL reported earnings with lower profit margins. Material, Financial and Transportation stocks performed well in our watch list including: X, ZION, STT, UAUA, UNP, PCP, VPRT, CREE, BA and DECK moved higher on Friday. NDX stocks INTU, EBAY, MICC and ADBE also had nice chart moves on Friday. The SPX and other broad indexes finished a strong short term trend week following the prior weeks support bounce and bullish divergence we alerted you to in several posts before this past weeks three day weekend. Look at these Charts… (click image to enlarge) Guidance: Friday is the new high day in the recent support bounce. 1,100 is the short term support level, just below Friday’s low. Short term resistance is 1,115. If resistance is broken look for a move to the next resistance level in the 1,130 area. The short term trend is up. The four-month trend is sideways. The twelve-month trend is up. Continue to focus on and trade setups on the charts of the stocks you watch and follow your rules. Continue to trade the short term trend and raise your stops. AAPL -1.25 QCOM -0.22 GOOG -2.45 BIDU +2.54 NDX 100 stocks stronger than the NDX include INTU, TEVA, EBAY, MICC, DTV, ADBE, JBHT, CMCSA, LINTA, SPLS, CTAS, LRCX, SRCL, LBTYA, ORLY, IACI, CHRW, FISV, BIIB, EXPD, VRTX, KLAC, ERTS, ADP, PDCO, HANS, WCRX, NIHD, CHKP, XLNX, GENX, FLIR, FLEX, SHLD, AKAM, VRSN, CERN, BBBY, FAST, NWSA, ISRG, MCHP and BIDU. Stocks to Watch on Monday Holding Above 30 DMA ALGT, CBST, DLB, NFLX, AMED, CHL, BA, GMCR, MCD, UAUA, AGU, BKC, CAM, CEDC, CREE, VPRT, WHR, WLT, POT, BDX, BUCY, CAT, GR, ICE, MOS, PCLN, PCP, SPG, SWK, UNP, USD, USO, V, BAC, DE, DECK, DHR, ESI, MHS, SNDK, URE, DOW, FLS, GES, HANS, JEC, MELI Moving Above 30 DMA = 6 SYNA, TDG, X, IPI, FCX, ZION Moving Below 30 DMA = 2 VAR, TSL Staying Below 30 DMA AMX, FAZ, WMT, K, MYGN, WFC, MA, BYI, ACN, UNG, FAS, HLF, UYG, ATW, HDB, GS, HEAT, FUQI, SWN, WAB, PWRD, AMD, CGA, MON, WCG, GME Intermediate Term Market Trend: Neutral = 4 months, Up = 11 month Short Term Market Trend: Up