Friday, March 19, 2010

SPX Narrow Trading Range Pulls Back From Resistance...

DJIA 10,741.98 -37.19 -0.35%
SP500 1,159.90 -5.93 -0.51%
COMPQ 2,374.41 -16.87 -0.71%
Russell 2000 673.89 -7.72 -1.13%

Exchange NYSE NASD
Advancing 901 1,048
Declining 2,147 1,666

Oil $80.50 -2.04 – May contract
Gold $1,107.60 -20.60 – April contract
SOX 355.67 -5.97
VIX 16.97 +0.35

Index Direction Confirmation
VIX Up Yes – SPX
SOX Down Yes – COMPQ

Strongest Sectors: XLV -0.04%…XLU -0.11%...XLP -0.29%

Weakest Sectors: XLE -1.20%...XLB -1.09%...XLF -0.66%

All nine sectors moved lower on Friday. Healthcare, Utilities, Consumer Staples, Consumer Discretionary and Industrials were stronger than the SPX -0.51%.

Sector Watch
Up Trending: XLY, XLI, XLP
Horizontal Breakout: XLF
Sideways: XLE, XLU, XLB, XLK, XLV
Down Trending:

Key Resistance Levels
1,178 = Fib extension
Key Support Levels
1,155 = 1,119 BO chart target – Dec 23
1,145 = 1,133 BO chart target – Dec 31 Low
1,125 - 1,133 = 1,075 BO chart target - Sep 08 Low

The short term trend turned neutral on Friday as many stocks and broad indices turned lower and finished near or below price lows on Wednesday. We believe this could signal a short term correction. Many short term traders will look to exit bullish trades or take bearish trades on a break of the low of the high day or a break below short term support.


I alerted listeners in the Weekly Wrap on Friday to be prepared for a potential pull back and issue the same alert here. Trade according to your rules going into the new week.

Look at these Charts
(click image to enlarge)


Potential Bearish Entry
(click image to enlarge)
ADBE is scheduled to report earnings on March 23.

Guidance:
The SPX closed at 1,159.90 while forming a bearish engulfing pattern following an inside day on Thursday.

The VIX closed higher and did confirm the lower close on Friday.

The SPX, INDU, COMPQ, RUT, TRAN and SOX all moved lower. Each index formed a high day on Wednesday, Thursday or Friday.

Be aware if the broad indexes do move lower that it is likely that approximately 75% of stocks will move lower also. Be prepared to protect your short term positions if prices move lower.

May options contracts start trading Monday in many underlying stocks.

The short term trend is neutral.
The four-month trend is up.
The twelve-month trend is up.

Continue to focus on and trade setups on the charts of the stocks you watch trade with the trend and follow your rules.

Adjust your stops according to your rules for up and down trending trades.

AAPL -2.40
QCOM -0.38
GOOG -6.40
BIDU +4.99
NDX 100 stocks stronger than the NDX include ROST, GENZ, AMGN, VRTX, CEPH, HANS, TEVA, EXPD, FLIR, CTAS, ESRX, GILD, FLEX, PPDI, BIDU, BIIB, CTXS, MICC, ILMN, PCAR, FWLT, SRCL, ORLY, HSIC, CHRW, SPLS, EXPE, LRCX, MSFT INTU, PDCO and SBUX.

Stocks to Watch on Monday
Holding Above 30 DMA
CBST, DLB, NFLX, BA, UAUA, AGU, CAM, CREE, VPRT, WHR, WLT, BDX, CAT, GR, ICE, PCLN, PCP, SPG, SWK, UNP, USO, V, BAC, DE, DHR, ESI, URE, HANS, JEC, WMT, FAS, GES, GMCR, SNDK, TDG, USD, UYG, X, DECK, MELI, POT, FLS, HDB, HLF, MHS, MYGN, VAR, CGA, IPI, FCX, ATI, MOS, WAB, GS, DOW, AMD, AMX, WFC, ATW, ACN, CEDC, MA, PWRD, ZION, BKC, MCD, ALGT, GME, SYNA, AMED, WCG, STT, K, CHL
Moving Above 30 DMA = 0


Moving Below 30 DMA = 4
ATW, CAM SYNA, CGA
Staying Below 30 DMA
MOS, FUQI, HEAT, SWN, TSL, BYI, FAZ, UNG, MON

Intermediate Term Market Trend: Up
Short Term Market Trend: Neutral

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