SPX Falls for Second Day as Downward Momentum Slows...

The SPX formed a hammer-like spinning top, down -8.04 at 1,307.40 on Wednesday.  This was the first two day pullback in the SPX since January 20. The SPX, broad indexes and many individual stocks are currently in a bull flag price pattern.  Many stocks also formed a hammer candle today.

SPX hammer-like black spinning top, bull flag

INDU black candle, bull flag

COMPQ black candle, bull flag

RUT black candle, bull flag

Breadth strengthened on Wednesday but remained negative as decliners led advancers 1.85 to 1 on the NYSE and 3.15 to 1 on the NASDAQ …

Exchange       NYSE          NASDAQ

Advancers      1,067                639

Decliners        1,974              2,013

Index              Chg.    Close    Direction      Confirmation

VIX                 +1.33      22.13     Up                 Yes – SPX

SOX               -8.54     444.27     Down            Yes – COMPQ

Leading stocks > +2% on Wednesday included HLF, UCO, SLW, SWN, MCP

Losing stocks < -2.0% included LCC, UAL, CRUS, A, NVDA, TIF, FDX, FWLT, TSL, JDSU, RVBD, AMD, SINA, DOWN, CMG, DE, ESI, GES, ATI, SWKS, CRM, F, JNPR, VECO, IPI, CIEN, SWK, VMW, ACN, HAS, DECK

The broad indexes continued lower with slower momentum and more stocks bouncing at support on Wednesday.  AAPL and GOOG moved higher and AMZN, BIDU, NFLX and PCLN closed lower.

PCLN +19.91, +4.67% in after hours trading after reporting Q4 EPS that beat estimates, revenue that was short of estimates and raised guidance for Q1

Positives – AAPL, GOOG, TNX, Euro, breadth and sectors strengthened

Negatives – SPX, INDU, NDX, RUT, VIX, AMZN, BIDU, NFLX, PCLN, breadth and sectors remained negative

Interest rates closed higher on Wednesday and bond ETF TLT was up 33 cents.  The Euro rose 96 pips to 1.3747 at 5 pm ET.

Just one of nine sectors rose on Wednesday with Energy XLE +2.03% and Consumer Staples XLP -0.24% leading all sectors.

Watch these setups on Thursday for potential entry signals...

Setups

Bull Flag – NDAQ, AKS, LDK, JNPR, VLO, CLF, JDSU, GLW, NYX, ATI, URE, DISH, TSL, DLR, HANS, HUM, LDK, NTES, CAM,  SLB, TIE, MA, SPG, STI, NETL, CAT, SOHU, ATW, SWK, ICE, XL, IL, GLW, NFLX, JDSU, CIEN, SWKS, SMH, AAPL, AMZN, BIDU, PCLN, LULU, RVBD, CMG, OPEN, ARMH

Breakout – SLW, CHK, HLF, VRTX

SPX

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

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

The short term 3 day trend is down.
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 +4.01 – white candle inside day in bull flag

AMZN -3.74 – black candle at 61.8 Fib retracement pull back

NFLX -10.40 – hammer like at earning gap support day six in bull flag

QCOM -1.04 – black spinning top, day two in bull flag

GOOG +1.11 – white hammer in pull back

BIDU -4.38 – black candle at earnings gap support day seven in bull flag

NDX 100 stocks stronger than the NDX include VRTX, DTV, AAPL, GRMN, QGEN, HSIC, GOOG, VRSN, GENZ and MSFT.

Stocks weaker than the NDX include DLTR, ADSK, ILMN, NVDA, NFLX, STX, BIDU, JOYG, LRCX, NIHD, MU, RIMM SHLD, WCRX and INTC.

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

Moving Above 30 DMA = 0

Moving Below 30 DMA = 10

ACN, DOW, FAS, GS, HAS, IPI, POT, SMH, SWKS, TIF

Staying Below 30 DMA

A, AGU, BA, BAC, CRM, DE, FDX, FWLT, JEC, LVS, LXK, MHS, MOS, NVDA, PCP, PNC, SINA,, SNDK, TBT, UAL, UNP, VECO, X, CF, PCX, SINA, SKX, WLT, ZION, VMW, MCP, SWN, AIV, UCO, UNG, WHR, F, LCC, CHL, FCX, CREE, GME, FAZ

Intermediate Term Market Trend: Up
Short Term Market Trend: Down