Wednesday, April 20, 2011

SOX Explodes to the Upside after INTC Earnings...MU, KLAC, ALTR Lead..

AAPL earnings are out...
6.40 EPS vs. 5.37 estimate, 24.67 b vs. 23.38 b estimate...AAPL +10.61, is on the rise...

So I stepped beyond typical protocol this afternoon after the close and turned on the financial channel that is embedded in my trading platform...within minutes I heard two reasons why I don't generally listen...the first was that two financial professionals are being questioned about the second half of the year...the first one responds in part...we like energy and think there is risk in utilites...the second one added we like utilities and contrary to (the first speaker) we think there is expectation risk in energy...so what actionable items can the typical investor take from that?

A few moments later the host Maria is interviewing the head of the NYSE and two of his key execs...after several questions she asks about CEO personalities and competition and asks if this was a factor in preferring the Deutsche Bank takeover bid over the NDAQ bid?  They switch the camera from her to him and he responds...first unless I missed an email earlier today its not a Deutsche Bank takeover, its Deustsche Bourse and secondly its not a takeover its a merger...

I was really curious how she was going to handle this major misspeak...when the camera comes back to her, she makes no reference to her errors at all, thanks them for the interview and goes to the next converstaion...

How many errors go unspoken about?  What if there wasn't a knowledgeable source on screen when an error is made?

I don't know about you but it just doesn't increase my confidence...

The SPX gapped up and formed a large white candle that closed +17.74 at 1,330.36.

SPX large white candle, above 30 DMA +1.35%
INDU large white candle, new high close, +1.52%
COMPQ gap up, white candle above 30 DMA, +2.10%
RUT large white candle, above 30 DMA, +2.00%

Breadth strengthened on Wednesday as advancers led decliners 4.87 to 1 on the NYSE and 3.17 to 1 on the NASDAQ …

Exchange       NYSE          NASDAQ
Advancers      2,505             2,018
Decliners           514                 636

Index              Chg.    Close    Direction      Confirmation
VIX                 -0.76       15.07     Down            Yes – SPX
SOX            +18.16     443.42     Up                 Yes – COMPQ

The VIX made its lowest close since July 6, 2007 when it closed at 14.72.

Leading stocks > +2% on Wednesday included VMW, IL, CRM, CRUS, UCO, NETL, ATW, JDSU, VECO, SMH, AMD, ARUN, A, GLW, SWKS, CIEN, GES, SNDK, FCX, NVDA, CMG, F, WDC, DECK, TIF, FWLT, URE, CSTR, VLO, ANF, SWN, CAT, JNPR, JEC, SLB

Losing stocks < -2.0% included NTES, SOHU, MCP, IAG, SLW, UAL

Positives – SPX, INDU, COMPQ, RUT, NDX, RUT, AAPL, AMZN, GOOG, NFLX, PCLN, QCOM, breadth and sectors strengthened, TBX, TBT, Euro

Negatives – BIDU, TLT, XLF relatively weak

Interest rates TNX +0.44 moved UP and bond ETF TLT moved down 60 cents.  Financial stocks XLF rose 4 cents. The Euro moved up 185 pips to 1.4519 at 5 pm on Tuesday.

All nine sectors moved higher on Wednesday.  Energy XLE +2.36% and Technology XLK +2.11% were the strongest sectors.

Key Earnings this week:

INTC, WYNN, YHOO, VMW, LLTC, MICC, JNJ gapped up today after reporting earnings Tuesday. 

Wednesday – WFC, FCX, UTX, VMED, AAPL, GILD, FFIV, LRCX, QCOM, AMGN, AXP, WDC, MAR, STI, CAKE, UNP, AMR, DAL

Wednesday morning:
WFC falls after .67 EPS vs. .66 estimates, revenues miss
UTX rises after 1.11 EPS vs.1.07 estimates
FCX rises after 1.56 vs. 1.26 estimates
VMED rises after 0.01 vs. 0.04 estimates

After the Close: 
AAPL +3.1%, FFIV +12.53%, QCOM +5.19%
GILD -2.53%, LRCX -5.02%, AMGN -2.1%, WDC -1.6%, AXP -1.28%
GILD - misses EPS and Revs...

Thursday – MXIM, SNDK, VRTX, BIIB, AMD, ALD, ALXN, COF, DD, GR, LLL, NEM, NUE, NOK, PCX, PNC, RMBS, SLB, UAL, VZ

Look for selectivity and rotation to occur with positive earnings attracting big money buying and negative earnings attracting big money selling...it is happening yesterday and today...

SPX
Resistance: 1,330, 1,344
Support: 1,321, 1,311, 1,300

The short term 3 day trend is up.
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 +4.55 gap up, spinning top
AMZN +5.05gap up, white candle, bull flag bounce
BIDU -0.59 black candle, new high
GOOG +4.20bullish harami, inside day
NFLX +2.88spinning top, bounce continuation
PCLN +5.82gap up, shooting star, new high close
QCOM +1.85 gap up, white candle

NDX 100 stocks stronger than the NDX include MU, INTC, FFIV, KLAC, ALTR, WYNN, SHLD, YHOO, AMAT, CTXS, ADSK, SYMC, LRCX, MXIM and MCHP.

Stocks weaker than the NDX include APOL, URBN, ISRG, BIDU, ADBE and GILD.

Stocks to Watch on Thursday
Holding Above 30 DMA
HUM, GMCR, HLF, SINA, UCO, CSTR, WDC, DHR, NTES, MCP, A, WLT, ACN, SOHU, CMG, ANF, DECK, DLR, CRM, LVS, TIF, V, NDAQ, NYX, SNDK, CIEN, IL, VMW, FAZ, SWK, URE, ATI, TLT, CF, AGU, AKS, ARUN, CHL, CLF, DOW, MHS, POT, UNG, ZION
Moving Above 30 DMA = 12
AMD, CAT, DE, F, FCX, GES, IPI, JEC, NETL, NVDA, SMH, SWN
Moving Below 30 DMA = 2
SLW, UNP
Staying Below 30 DMA
PCX, TSL, IAG, GS, CDE, FAS, STI, TBT ESI, FWLT, HAS, SLB, VECO, VLO, ATW, MOS, X, ICE, CAM, RVBD, JNPR, BAC, GLW, JDSU, CRUS, SWKS, LDK, UAL

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

14 comments:

Anonymous said...

watching with baited breath

Dave Johnson said...

Hi Anony...

Mike F said...

two what?

Dave Johnson said...

Hi Mike,

To anything that happened today...

DJ

Mike F said...

agreed Dave. From time to time I catch myself wanting to tune in to the talking heads at 7:30 am central when major news is coming out, and then realize I'm better off watching the es futures instead. The futures movement will tell me more about what is going on then they will....kinda scary.

Dave Johnson said...

Mike,

It's like I always, ACTION, in this case trading action, ALWAYS SPEAKS LOUDER THAN WORDS.

Great insight, Mike, thanks for sharing!

Dave

Brian McAllister said...

So right Dave! The noise is distracting, confused at times, and sometimes encourages me to "think" what might happen, instead of relying on the charts. This year I started keeping Bloomberg on mute whenever it is on, and just watch the ticker at the bottom. I'd like to think the mute button is at least part of the reason I am trading better! Thanks.

Anonymous said...

Dave,

Great observations!

If you have a moment, perhaps you can write about CMG and ISRG earnings reactions.

See you in New Jersey.

Thanks
Don

Dave Johnson said...

Don,

CMG uptrend beakout to new high

ISRG uptrend bull flag.

Hope all is well,

Dave

Dave Johnson said...

Chart Trader,

The better focus from having mute is likely a major contributor.

Keep up the good work.

Dave

TraderBobb said...

Benjamin Franklin quotes
“Believe none of what you hear and half of what you see.”

Dave, as you have said something to the effect, "what does the chart say" - not what we think or hear or feel - and trade the probabilities.

I'm still working on listening with my eyes.

Thanks much!

Robert
CANI_212

Judy said...

Dave, your observations Monday night about all the hammers and bull-flag setups was VERY helpful to my trading this week. Also setting targets, and getting out at the target, has helped me protect profits.

I know I'm catching on when I know what you will likely say about the charts before you even get your sound on! Repetition works!!!

Thanks, Dave!
Judy Barnette

Gary said...

Dave,

I was a little gun shy after I was stopped out of my last three trades on AAPL. However, using the same technique with the weekly calls I traded AMZN 180 weekly calls @ 1.54 that I will look to close tomorrow with a nice gain. I did take the SPY trade but due to a late start, entered later in the morning on the pullback around $1.45. You are an excellent teacher Dave!

Thank you,

Gary

Dave Johnson said...

Robert, Judy, Gary,

Great insights...

Thanks for sharing!

Dave