Monday, March 14, 2011

SPX Moves Lower and Forms Hammer...Closes Just Above 1,294 Support...

The SPX formed a hammer/bullish harami closing down -7.89 at 1,296.39.  The SPX fell to its horizontal support of Feb 24 and then bounced up to form today’s hammer.   Monday is the sixteenth day since the SPX peak on Feb 18.  A MACD bullish divergence is still present on the SPX, INDU, COMPQ and NDX. The MACD has formed an equal low on the RUT.


SPX hammer/bullish harami, bounce at support, -0.58%
INDU hammer/bullish harami, bounce at support, -0.43%
COMPQ bullish harami, bounce at support, -0.54%
RUT hammer/bullish harami, bounce at support, -0.58%

Breadth weakened on Monday as decliners led advancers 2.14 to 1 on the NYSE and 2.32 to 1 on the NASDAQ

Exchange       NYSE          NASDAQ
Advancers         953                796
Decliners        2,041             1,847

Index              Chg.    Close    Direction      Confirmation
VIX                +1.05       21.13     Up                 Yes – SPX
SOX               -0.74     427.17     Down            Yes – COMPQ

SOX semiconductor stocks WFR, STM, MU, BRCM, NSM, TER and TXN rose on Monday.  Other semis fell but only AMD -2.54% was down more than -2%.

Leading stocks > +2% on Monday included LDK, TSL, NYX, SWN, CRUS, VLO, FAZ, CAT 

Losing stocks < -2.0% included TIF, LVS, VMW, NDAQ, UAL, NTES, RVBD, AMD, MCP, CRM, FAS, MHS


Positives – Euro, AAPL

Negatives – SPX, VIX, TNX, breadth and sector weakness, GOOG, NFLX

Interest rates moved lower on Monday and bond ETF TLT was down 4 cents.  The Euro rose 92 pips to 1.3991 at 5 pm ET bouncing above its Feb 1 resistance, now new support.

Only one sector rose on Monday with Energy XLE +0.55% and Materials XLB -0.37% leading all sectors.

Movers and Setups
Bull Flag Price Pattern – NYX, ARUN, ESI, HLF, HUM IL, RVBD, SLW, URE, VLO, HAS, ICE, SWK, UCO, WDC, PCLN, ADBE, BIIB, WYNN, CERN, CTXS, ROST, ADP, VRTX, DTV, GILD, ALTR, XRAY, SBUX, GRMN, PAYX, EBAY, VOD, QGEN

SPX
Resistance: 1,300, 1,311, 1,321
Support: 1,281, 1,271, 1,256

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 +1.57 spinning top closes above 30 DMA
AMZN -1.43 spinning top/bullish harami at support, -14.3% correction from Feb 14
NFLX -3.34spinning top, -23.6% correction from Feb 14
QCOM -0.13 spinning top at gap support, -11.8% correction from Mar 1
GOOG -6.72spinning top, 10.0% correction from Feb 18
BIDU -0.90 doji

NDX 100 stocks stronger than the NDX include FSLR, CELG, SRCL, MU, DLTR, BRCM, NVDA, ISRG, ADSK, CTRP, FLIR, AAPL, INFY, ERTS and CERN.

Stocks weaker than the NDX include STX, WCRX, NTAP, SBUX, VRTX, DELL, LINTA, CMCSA, FFIV, ROST, QGEN, EXPD, CEPH, NFLX and RIMM.

Stocks to Watch on Tuesday
Holding Above 30 DMA
HUM, NTES, SWK, IL, DHR, ARUN, GMCR, RVBD, SLW, ESI, HLF, UCO, CMG, HAS, A, WDC, SINA, TLT, FAZ, CAM, JNPR, SOHU, VLO
Moving Above 30 DMA = 3
CAT, NYX, SWN
Moving Below 30 DMA = 6
ATW, BAC, DLR, ICE, TIF, URE
Staying Below 30 DMA
MCP, AMD, CHL, DECK, DOW, NDAQ, UNP, V, VECO, CLF, FAS, GLW, JDSU, NETL, PCX, TBT, ACN, AGU, CRUS, CSTR, SWKS, WLT, CIEN, DE, GES, IPI, MHS, MOS, POT, SLB, SMH, ATI, CF, AKS, CRM, LDK, SNDK, STI, TSL, FWLT, GS, JEC, LVS, NVDA, UAL, X, ZION, VMW, UNG, F, FCX

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

2 comments:

Gary said...

Dave,

With the market set to gap down at the open today, your insights would be appreciated. With a 29ish point gap and April positions, my instinct tells me to ride the storm into the close to see if buyers step in. My rules will stop me out at the open. I think alot of traders like myself are unsure on how to approach such a significant gap. As always, your posts are appreciated very much.

Anonymous said...

Dave,

I agree with Gary. I was thinking of selling out completely but decided to follow my rules an let my stops do their job.

Your insight into the gap would be appreciated.

Thanks
Don