Tuesday, June 8, 2010

SPX Rallies 20 Points After Reaching 1,042 Support...

DJIA                           9,931.97 +123.49 +1.26%
SP500                        1,062.00   +11.53  +1.10%
COMPQ                      2,170.57     -3.33   -0.15%
Russell 2000                  617.69     -0.80  -0.13%

Exchange                  NYSE              NASD
Advancing                  1.847               1,075
Declining                    1,222               1,573


Oil            $71.98       +0.53
Gold      $1,244.00     +4.70
SOX         334.58       -1.26
VIX             33.70       -2.87

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

The SPX tested support at 1.042 where buyers took over and pushed it to a 1,062 close at the high end of its 21 point trading range. Breadth increased again as advancing issues increased from 816 on Monday to 1,847 on the NYSE.

There is STILL a bullish divergence in the MACD Histogram and 2 line, the stochastic, the CCI and the RSI. A bullish divergence also exists on the VIX and the green line of the Market Forecast. The oscillators continue to indicate that there is a higher probability of a support bounce than a support break.

Large cap stocks bounced off support and rallied into positive territory for the day. Nasdaq and small-cap stocks rallied off support but remained just barely negative at the close.

A bullish harami, a bullish engulfing and two hammers...
Look at these Charts
(click image to enlarge)

If I had a hammer, I'd hammer in the morning...
Look at these Charts
(click image to enlarge)

Trends with bull flags...
Look at these Charts
(click image to enlarge)


Dave's Insight: Continue to Follow Your Rules.


Guidance:
Protect profits on bearish trades by adjusting stops according to your rules if the support bounce continues on Wednesday.

This is a good time to paper trade up trending charts according to your rules.

Short term resistance is at 1,081 the R-1 mid-section of Friday's large black candle.

PCLN, RIMM, MOS, FCX, X, CAM, MA, CLF, WLT, WFC are down trending and present continued bearish opportunities if the market breaks support.

Trade strong stocks up.
Trade weak stocks down.

The VIX fell -2.87 and closed at 33.71.

The short term 3 day trend is down.
The six-month trend is neutral.
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 of the chart and follow your rules.

AAPL -1.61
QCOM +0.26
GOOG -0.74
BIDU +0.68
NDX 100 stocks stronger than the NDX include: GRMN, WYNN, RIMM, JOYG, ROST, FLEX, ADP, SRCL, SPLS, LOGI, WCRX, SIAL, ORLY, BBBY and NWSA.

Stocks weaker than the NDX: MRVL, VRTX, NIHD, GILD, HOLX, NVDA, HANS, AMZN, CELG, STLD, DELL, AKAM, BIIB, CTXS and TEVA.

Stocks to Watch on Wednesday
Holding Above 30 DMA
TLT, FAZ, NFLX, SNDK, CMG, VMW, AZO, DECK, CRM, SWN, UAUA, UNG
Moving Above 30 DMA = 2
CHL, LVS
Moving Below 30 DMA = 1
CSTR
Staying Below 30 DMA
DE, HLF, LXK, MHS, NTRI, WFMI, HAS, ATI, WHR, ESI, BYI, DHR, GR, MCD, WMT, ZION, STI, PNC, AIV, AMD, CAT, CREE, SPG, SWK, UNP, URE, WFC, BA, JEC, GME, HANS, ACN, AMX, DOW, FAS, FLS, PCLN, PCP, TSL, USD, USO, ATW, BAC, GES, MA, V, CAM, BUCY, WLT, CLF, GMCR, GS, FCX, X, AGU, IPI, POT, MOS

Intermediate Term Market Trend: Neutral
Short Term Market Trend: Down

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