SOX, RUT, NDX Lead Market Higher in Classic Bull Flag Support Bounce...

A strong support bounce in stocks confirmed the SPX, INDU, COMPQ and NDX hammer patterns and the RUT and SOX bullish harami patterns that formed on Thursday...The SPX formed a large white candle, closing up +13.78 at 1,319.88 on Friday.  This was the first day of a bull flag support bounce following its three day pullback.  Buyers had stepped in just above the 78% Fibonacci support level from the January 28 low on Thursday forming a hammer doji.

SPX large white candle, bull flag support bounce

INDU small bullish engulfing confirms Thursday’s hammer in bull flag

COMPQ gap large white candle, confirms bullish harami in bull flag

RUT large white candle confirms bullish harami, closes above 10 DMA

Breadth strengthened significantly on Friday as advancers led decliners 4.27 to 1 on the NYSE and 4.00 to 1 on the NASDAQ …

Exchange       NYSE          NASDAQ

Advancers      2,460             2,120

Decliners          575                530

Index              Chg.    Close    Direction      Confirmation

VIX                 -2.10      19.22     Down            Yes – SPX

SOX             +11.79    463.69     Up                 Yes – COMPQ

Leading stocks > +2% on Friday included HANS, VLO, SLW, NETL, CF, SINA, CRUS, FAS, AIV, CIEN, URE, DISH, IPI, SLB, CAM, UNG, MCP, ATW, CRM, SWN, MOS, UCO, AGU, DLR, SWKS, STI, A, ICE, F, SNDK, PCX, DOW, RVBD, LVS, BA, SMH, ATI, MHS, AMD, NVDA, CLF, GES

Losing stocks < -2.0% included TSL, FAZ, CSTR, LDK

The rally on Friday had a strong structure with the SOX +2.61%, RUT +2.21%, NDX +1.43%, SPX +1.06% and the INDU +0.51%.  Growth indices led and mature indices followed.  The sectors were led by XLE, XLB and XLF and the defensive sectors XLV, XLU and XLP lagged in an ideal sector structure for a bull flag support bounce in an intermediate and long term up trend.

ADSK gained +2.32, +5.74% following a positive reaction to earnings after the close on Thursday.  CRM gained +4.51, +3.36% after gapping up and closing lower following positive reaction to Q4 EPS after the close on Thursday.

PCLN -2.31, -0.50% paused after rising $36.35 on Thursday after reporting Q4 EPS that beat estimates Wednesday after the close.

Positives – SOX, RUT, COMPQ, NDX, SPX, VIX, AAPL, BIDU, QCOM, breadth and sectors strengthened significantly

Negatives – TNX, Bonds, Euro, AMZN, NFLX

Interest rates closed lower on Friday and bond ETF TLT was up 54 cents.  The Euro fell 52 pips to 1.3745 at 5 pm ET.

All nine sectors rose on Thursday with Energy XLE +1.59% and Materials XLB +1.48% leading all sectors.

Flag Bounce Continuation – PCLN, NTES, RVBD, OPEN, LDK, SWKS, JNPR, GLW, SOHU, ICE, IL, NIHD

Flag Bounce – CRM, NDAQ, VLO, ATI, URE, DISH, DLR, HANS, CAM, NETL, ATW, SWK, CIEN, SMH, AAPL, BIDU, CMG, ARMH, CRUS, FFIV

Breakout – HLF, VRTX

Setups

Bull Flag – AKS, CLF, JDSU, NYX, TSL, HUM, SLB, TIE, MA, SPG, STI, CAT, XL, NFLX, AMZN, LULU, GMCR

Breakout – IL, LDK, JNPR, DISH, DTV, CAM, PCLN, SLW, CHK

SPX

Resistance: 1,321, 1,330, 1,338

Support: 1,311, 1,300, 1,281

The short term 3 day trend is neutral.
The six-month trend is up.
The twelve-month trend is up.

Trade with the trend of the chart you are trading.

Bullish entry signal is a bounce off support and a break above the high of the low day or a break out of horizontal resistance.

Bearish entry signal is a break of short term support or a bounce down from the 30 DMA or other resistance.

AAPL +5.28 – white candle confirm hammer, bull flag bounce

AMZN -0.51 – black candle, does not confirm bullish harami

NFLX -2.74– black spinning top, does not confirm bullish harami

QCOM +1.22 – white candle rise to resistance, bull flag bounce

GOOG +1.22 – inverted hammer in pull back

BIDU +1.78 – doji, confirms bullish harami, bull flag support bounce

NDX 100 stocks stronger than the NDX include ADSK, MRVL, MU, ALTR, LRCX, CTXS, ADBE, MXIM, NWSA, CERN, NTAP, ATVI, VRTX, BRCM and INTC.

Stocks weaker than the NDX include FSLR, NFLX, MSFT, EXPE, EXPD, PCLN, AKAM, DLTR, AMZN and GENZ.

Stocks to Watch on Monday

Holding Above 30 DMA
NDAQ, VLO, CLF, JDSU, CRUS, GLW, NYX, ATI, URE, DISH, TSL, DLR, HUM, LDK, NTES, CAM,  SLB, TIE, MA, SPG, NETL, CAT, SOHU, ATW, SWK, ICE, JNPR, AMD, DHR, V, ARUN, CIEN, CMG, HSY, DECK, GMCR, GES, RVBD, SLW, ESI, CSTR, HLF, TLT, ATI, MOS, SMH, SWKS, VECO

Moving Above 30 DMA = 14

ACN, AGU, AIV, BA, CRM, FAS, HANS, IPI, MCP, POT, SNDK, STI, SWN, TIF

Moving Below 30 DMA = 2

AKS, FAZ

Staying Below 30 DMA

DOW, GS, HAS, A, BAC, DE, FDX, FWLT, JEC, LVS, LXK, MHS, NVDA, PCP, PNC, SINA, TBT, UAL, UNP, X, CF, PCX, SINA, SKX, WLT, ZION, VMW, UCO, UNG, WHR, F, LCC, CHL, FCX, CREE, GME

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

2011 the Best Year Ever!

Week 8 is done.  Just 44 weeks left to go as we move towards our objective to make 2011our best year ever.  How did you do?

Are you finding this weekly reminder redundant and tedious?  If so, the focus is probably one factors you may have been missing last year.  The saying goes the challenge is in the details.  Well this is detail work and every business has it.

                 

So once again evaluate your trades for the week.  Did you buy, hold and sell where you were supposed to according to your rules? 

Be honest, did you get out of some short term trades either last Friday or Tuesday according to your rules?

If so, did you re-enter on Thursday or Friday or did you delay?

Give yourself an A+ or 10 for each trade that you did follow your rules.

How is your portfolio doing YTD compared with the following indexes?  If you outperformed the SOX give yourself an A+, the INDU, NDX or SPX give yourself an A.

 

                        Week 8              YTD

SPX                 -1.72%               4.95%

NDX                -1.93%               5.79%

SOX                -1.65%             12.60%

INDU               -2.10%               4.78%

Take your annual goal that you sent in to Chart Signals and divide that goal by 52 weeks and multiply by 8.  How does your week 8 results compare to your goal?  If you are at the goal or higher give yourself and A+.