Bull Flag Bounce...I Hope You Got Yours Today...

A little seen Rising Three Methods candle pattern this week on the SPX, RUT, other indexes and many stocks suggests trend continuation...next SPX resistance 1,170...

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Exchange    NYSE    NASDAQ
Advancers   2,526       2,160
Decliners       543          519

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Index    Direction    Confirmation

VIX        Down          Yes – SPX
SOX       Up              Yes – COMPQ

Leading stocks on Friday included FAS, ATI, USD, CRUS, AMD, AGU, TIE, LVS, URE, A, STI, CAT, CSTR, WHR, NDAQ, UCO, NETL, VECO, DOW, ZION, CMG, FLS, TSL, UNP, PCP, IPI, SWK, ICE, BUCY, CAM, NTRI, BAC, PNC, CREE, GES, BA, AIV, HLF, GR, DECK, X, LXK, WLT, NYX, FCX, DHR, VMW, SPG, TBT, SINA, CLF

Losing stocks included FAZ, UNG, TLT, ACN, NTES

This week I have be alerting you to the Bull Flag Setup on the broad indexes. In our Thursday post I alerted you these 22 stocks forming a bull flag and to be prepared for an entry: AGU, NTAP, CMG, JOYG, TSL, PCP, BUCY, GES, HLF, LXK, DHR, VMW, SPG, SINA, PCLN, DE, RVBD, CRM, GMCR, VOD, FFIV and AKAM.

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On Friday ALL 22 stocks bounced in their bull flag patterns along with the SPY, DIA, QQQQ and IWM for a total of 26 bull flag entries. And of course there were a lot more in our watch list and the NDX 100 that I didn’t specifically mention. I hope you got yours for some of the terrific gains available.

The next entry point on many of these charts will be the horizontal resistance breakout. Watch for the breakout entry beginning on Monday.

The SPX returned to its 1,148 resistance. Watch for a potential breakout of this resistance area reached on both Monday and Friday. If the SPX does breakout look at the 1,170 resistance area as the next high probability target.

Financial +2.64% and semiconductor +4.00% stocks both had above average moves on Friday but over the past several weeks have trailed the broader averages and have the potential for above average returns moving forward if the broad market continues its recent up trend.

SPX
Resistance: 1,148, 1,170
Support: 1,130, 1,115, 1,100

The SPX bounced in a rising three methods trend continuation candle pattern.

Enter bullish trades with a bounce off support and a break above the high of the low day. Many up trending stocks bounced and gave bull flag entry signals on Friday.

Exit short term trades according to your rules with a break below the low of the high day. Wait on bearish entry signals for a bounce down from resistance or a break of the low of the high day.

The VIX fell -2.16 to 21.71, and is still below the 25 benchmark level.

The short term 3 day trend is up.
The three-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    +3.40 – doji did not confirm potential shooting star
QCOM   +0.90 – white candle
GOOG +13.81 – large white candle did not confirm potential shooting star
BIDU     +2.80 – potential hanging man

NDX 100 stocks stronger than the NDX include: SHLD, ALTR, NVDA, LRCX, AMZN, FLEX, STX, XLNX, EXPE, BRCM, NTAP, GRMN, JBHT, LINTA and DELL.

Stocks weaker than the NDX: ATVI, ORCL, FWLT, APOL, DTV, AKAM, WCRX, GENZ, VRSN and BBBY.

Stocks to Watch on Monday
Holding Above 30 DMA
HLF, PCLN, RVBD, AGU, MCD, POT, FFIV, LVS, NFLX, VMW, CMG, CRM, TSL, FCX, SINA, SPG, VOD, AIV, BUCY, CAM, DE, DHR, DOW, PCP, SWK, UNP, UPS, URE, WLT, WMT, A, GMCR, HAS, IPI, JEC, LXK, CAT, ICE, FLS, GS, MHS, ATW, STI, ACN, ATI, AMX, GES, PNC, RMBS, ZION, NDAQ, UAUA, USD, VECO, MA, NETL, ESI, GME, HSY, WFMI, CHL, FDX, NTRI, AMD, TIE, V
Moving Above 30 DMA = 15
ATI, BA, BAC, CLF, CRUS, DECK, DLR, GR, GS, HANS, NYX, TBT, UCO, USO, WHR
Moving Below 30 DMA = 1
TLT
Staying Below 30 DMA
AKS, BYI, PNC, X, NTES, FAZ, CSTR, SNDK, CREE, SWN, UNG, SKX

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