SPX Forms Another Doji...Closes at 1,183...Second Week in a Row...

Friday was a nice trading day in the market if you were in the right stocks...CSTR, MXIM, IPI, BUCY, DE, STX, NIHD, PCLN and JOYG (to mention just a few that we watch) enjoyed solid gains, while the SPX traded in a tight trading range...Selectivity continued to be the theme for the third week of earnings season...absolutely no surprise since we alerted you  to this likelyhood three weeks ago...

The SPX closed down -0.52 or -0.04% on Friday forming a doji for the second day in a row…

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CSTR, MXIM and DECK were among the market leaders after reporting better than expected earnings. Advancers led decliners 1.48 to 1 on the NYSE indicating broader strength than on Thursday …

Exchange      NYSE      NASDAQ
Advancers     1,755         1,469
Decliners       1,180         1,177

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Index     Direction    Confirmation
VIX          Up              Yes – SPX
SOX         Down         Yes – COMPQ
          
Leading stocks on Friday included CSTR, DECK, VECO, X, NETL, IPI, MOS, UNG, CLF, CF, AGU, LVS, SINA, PCLN, ATI, V, NTES, AKS, SOHU, BUCY, UNP, BYI, SWK, POT, RVBD, DE, AIV, GME, CAKE, TIE, CAT, LXK, HAS, HLF, NDAQ, CRM, TLT, CHL, FFIV, INFA, NYX, CREE,DHR, MHS, ATW, SWN, WFMI, SKX

Losing stocks included AMD, TSL, TBT, CRUS, ZION, WHR, CAM, UCO, STI, GS, FDX, NFLX, WLT, SNDK, BA, FCX, BAC, PCP, FLS, CAN, SPG, A, JEC, HANS, FAS, VMW, CMG

Interest rates moved lower, bonds rose, the EURO rose, the SOX rose +0.62%. The VIX rose +0.32 to 21.20.

Six of nine sectors moved higher on Friday with Materials XLB +0.81% and Consumer Staples XLP +0.35% leading all sectors.

Charts to Watch - Bull Flag Setups - BIDU, AMZN, BRCM, ILMN, KLAC

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Charts to Watch - Bullish Engulfing Support Bounce - DE, SINA, SOHU, VECO, CAKE, X, BUCY

Other Flag Setups - SYMC, LOGI, LIFE, GRMN, STX, CMG, GS, HLF, MA, NFLX, NTES, RVBD, SWK, UAL, URE, V, CTXS

The eight week trend of the broad market represented by the SPX, INDU and RUT is up while the last two weeks have been neutral. This indicates that upward momentum is slowing. After eight weeks of up trending this consolidation could be the beginning of a short term pull back.

The trend in the NDX and broader COMPQ is up for both the eight and two week time frames.

We said three weeks ago that selectivity would rule with big money putting more money into stocks with good earnings and guidance and selling stocks with disappointing earnings or lower guidance. This has pretty much been the case and we expect that pattern to continue for the next week.

It appears that the real opportunity will continue to be in the stronger stocks that have already reported strong earnings and those that will do so during the up coming week.

Continue to trade with the trend and simultaneously be prepared for any break of support.


SPX
Resistance: 1,182, 1,190, 2,000
Support: 1,170, 1,148, 1,130

Enter bullish trades with a bounce off support and a break above the high of the low day or a break out of horizontal resistance.

A break and/or close below the low of the high day can be a potential exit for short bullish trades. Entry for a bearish signal can be a close below of the low of the high day for a counter trend trade or the same entry on a down trending stock.

The short term 3 day trend is neutral.
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 -4.26 – falls to support of Thursday’s hammer low
QCOM +0.74 – white candle
GOOG -4.88 – spinning top confirms Thursday’s hanging man but does not break low
BIDU -2.16 – black spinning top breaks below low of high day

NDX 100 stocks stronger than the NDX include MXIM, STX, LBTYA, VRSN, NIHD, PCLN, ORLY, XLNX, ADSK, JOYG, QCOM, ALTR, LLTC and FWLT.

Stocks weaker than the NDX: FSLR, HSIC, CTSH, INTC, BIDU, BRCM, BIIB, WCRX, SYMC, CSCO, AAPL, DELL, CMCSA, CTXS and PPDI.

Stocks to Watch on Monday
Holding Above 30 DMA
HLF, PCLN, AGU, MCD, LVS, CMG, FCX, SINA, VOD, AIV, CAKE, CAM, DE, DHR, DOW, UNP, URE, WLT, A, HAS, IPI, ICE, ATW, SLB, ACN, AMX, NDAQ, UAL, USD, MA, HSY, FDX, NTRI, AMD, V, ATI, BA, DECK, GR, UCO, CF, GS, SPG, HANS, MOS, VECO, CSTR, RVBD, TBT, WFMI, NYX, NFLX, NTES, PCP, PNC, BYI, INFA, MHS, NETL, CRM, FFIV, GMCR, ARUN, SNDK, SWN, ESI
Moving Above 30 DMA = 5
CAT, CLF, GME, POT, SWK
Moving Below 30 DMA = 1
JEC
Staying Below 30 DMA
FAS, FLS, GES, SKX, WHR, ZION, LXK, CHL, STI, CREE, AKS, TIE, FAZ, RMBS, TSL, BAC, CRUS, X, TLT, DLR, VMW, UNG

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

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