SPX Breaks High of the Low Day...in a Big Way...Hammer Confirmation...

DJIA                          10,018.28  +274.66  +2.82%
SP500                         1,060.27    +32.21  +3.13%
COMPQ                       2,159.47   +65.59  +3.13%
Russell 2000                  611.66    +21.63  +3.67%

Exchange                  NYSE             NASD
Advancing                 2,666              2,098
Declining                      431                604

Oil           $74.07      +2.09
Gold   $1,198.60      +3.80
SOX        347.87      +15.72
VIX            26.84      -2.81

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

Hammer Confirmation on Wednesday
The break and close above the high of the low day that we have been looking for since last Thursday's hammer occurred on Wednesday.  The SPX had its largest daily increase since May 10 rising 32 points to close at 1,060.  Bottom line Wednesday was a strong bounce day with broad participation with advancers leading decliners and most stocks in our watch lists moving higher.

Nineteen stocks in our Stocks to Watch list (see below) crossed above their 30 DMA on Wednesday.

Bull Flag List
The bull flag list had 35 of 36 stocks moving higher on Wednesday: NFLX, AKAM, SNDK, SBUX, VMW, UAUA, FFIV, ILMN, CRUS, LVS, BA, CAL, CAT, CRM, GMCR, HAS, HSY, NYX, SWN, TIE, UNG, UCO, BIDU, NTAP, VECO, SKX, DECK, CMG, ICE, NETL, AAP, ALK, AZO, ABC, UNP and DLR.

NDX 100 Highlights
99 out of 100 stocks rose in price.

13 rose between 5.02% and 7.29%: BIDU, ALTR, NTAP, BRCM, AKAM, XLNX, LRCX, STX, VRSN, FSLR, CSCO, PCLN, FWLT

As of Tuesday just 12 stocks were above their 30 DMA: ALTR, BIIB, FLIR, FSLR, GENZ HANS, LBTYA, LLTC, MICC, RYAAY, SRCL, XLNX

Following Wednesday's trading there are 33 stocks above their 30 DMA as 21 more stocks rose above their 30 DMA: AAPL, AKAM, ATVI, BIDU, BRCM, CTSH, CTXS, ILMN, INFY, INTU, LRCX, MCHP, MXIM, NTAP, ORCL, ROST, SIAL, SYMC, STLD, SYMC, TEVA

If the support bounce continues on Thursday, 21 more stocks in the NDX could rise above their 30 DMA on Thursday: ADP, CERN, CHKP, CMCSA, CSCO, FAST, FISV, GILD, HOLX, HSIC, IACI, ISRG, JBHT, JOYG, LOGI, NWSA, PCAR, PPDI, VRSN, XRAY, YHOO

Guidance:

SPX formed a higher high and higher low large white candle that did confirm Thursday's hammer.
The SPX formed a higher low for the third straight day above Thursday's 1,010 support area.
The VIX did confirm the higher close in the SPX.
The VIX moved lower for the fourth day in a row.

Many stocks gave a bullish entry on a support bounce as momentum moved up on Wednesday breaking above the high of the low day.

If you tightened up stops to protect profits on your short term bearish trades as we have been alerting you since last week, then you likely got stopped out today if the position was still open this morning.

Trade strong stocks up with Wednesday's entry signal.


Wait for a new setup to trade weak stocks down.

The VIX fell -2.81 and closed at 26.84. Volatility stayed above the important 25 level on Wednesday.

The short term 3 day trend is up.
The two-month trend is down.
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 +10.03
QCOM +0.73
GOOG +14.13
BIDU +4.92
NDX 100 stocks stronger than the NDX include: BIDU, ALTR, NTAP, BRCM, AKAM, XLNX, LRCX, STX, VRSN, FSLR, CSCO, PCLN, FWLT, KLAC and MXIM.

Stocks weaker than the NDX: LIFE, ORLY, AMGN, CMCSA, TEVA, GILD, COST, ESRX, RYAAY and CELG.

Stocks to Watch on Thursday
Holding Above 30 DMA
TLT, CHL, CREE, CRUS, GMCR, HANS, FAZ, TSL, ACN, HSY
Moving Above 30 DMA = 19
AMX, ATW, BUCY, CAT, CRM, DLR, FFIV, FLS, HAS, HLF, MA, NETL, NFLX, PCLN, PNC, TIE, V, VECO, VMW
Moving Below 30 DMA = 0


Staying Below 30 DMA
NTRI, UNG, USO, AIV, BA, CLF, CMG, DE, DECK, GR, LVS, NYX, SKX, SNDK, SWN, UCO, UNP, FCX, GS, ICE, SPG, URE, ZION, UAUA, A, AMD, MCD, LXK, ATI, CAM, DHR, DOW, MHS, PCP, USD, WHR, WLT, POT, WFMI, WMT, SWK, CSTR, ESI, BYI, STI, IPI, JEC, GME, FAS, BAC, GES, X, AKS, AGU, MOS

Intermediate Term Market Trend: Down – 2 months
Short Term Market Trend: Up