Engulfing Followed by Spinning Tops, Harami, Bull Flag Patterns, Higher Lows...Watch for Bounce...

Three of nine sectors moved higher on Tuesday… XLI, XLV, and XLB were the strongest sectors. 

Breadth strengthened on Tuesday as decliners led advancers …1.06 to 1 on the NYSE and 1.10 to 1 on the NASDAQ…

SPY down 20 cents at 141.25...volume 127.5 million shares…

VIX up 0.48 at 17.12…
TNX down 0.20 at 16.08…

TLT up 72 cents at 125.38…
XLF down 4cents at 15.66…volume 39.4 million shares

AAPL down 10.34 at 575.85…volume 19.9 million shares …

FB up 42 cents at`27.04…on volume of 72.9 million shares…

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Technical Commentary:

The SPY formed a small spinning top above its 30 DMA.  Following Monday’s bearish engulfing the SPY’s small spinning top is typical of a support level in a bull flag pattern.  The VIX move up slowed on Tuesday and did confirm the SPY move down.

 

The ES closed down 2.00 at 1,404.75 as the 1,400 support area held again on Tuesday…NQ futures closed down 5.00 at 2,665.25.

NFLX went from Monday’s biggest loser to Tuesday’s biggest gainer in the NDX on new information that NFLX will be the exclusive online distribution agreement with DIS.  GMCR continues to gain following strong Q4 earnings last week and analyst raising its price target from 42 to 56.

The weight of the evidence continues to suggest the Nov 16 low is likely to hold and Tuesday’s price action suggests the current pullback is likely forming a higher low leading to a continuation to higher levels.  Watch for Potential Support Bounce.

The Euro closed up 43 pips at 1.3094 on Tuesday.  Another non-confirmation of the SPY pull back.

TNX, interest rates slipped again and TLT, bonds moved up 72 cents.  XLF was 4 cents lower at 15.66.

SPY – spinning top, bull flag, support at 30 DMA

AAPL – black candle, above 30 dma

FB – bullish harami, bull flag, BO target 29.63

FAS – spinning top, bull flag higher low

AMZN – white candle reverses bearish engulfing, pause, BO target 259.24

EXPE – black candle, bull flag

STX – large white candle confirms bullish harami, counter trend bounce

VIAB – bullish harami, bull flag, close above 30 DMA

RIMM – bullish harami, bull flag setup

CRUS – black candle, DBO setup

F – spinning top, bull flag setup

PHM – hammer, horizontal bull flag, close above 30 DMA

SWK – black candle, close at ST support at 30 DMA

SWI – bullish harmi, bull flag

RAX – black spinning top, bull flag setup above 30 DMA

URI – white candle, late rally bounce off 30 DMA, BO setup

YELP bullish harami, bull flag pull back under 30 DMA

XHB – hammer, horizontal bull flag, BO setup, above 30 DMA

XRT – hammer bounce at S1 and 30 DMA

BO = breakout, DBO = diagonal breakout, CT = counter-trend, IT = intermediate term, ST = short term

The Market Forecast Green Line is pointed up above the lower reversal zone.

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Chart Targets:

SPY = 143.52 short-term resistance
ES = 1,419.50…1,425 short-term resistance

EUR/USD = 1.3140, 1.3172 short-term resistance

Short-term support at
1.2954, 1.2878 = Euro

140.69 = SPY

83.20 = SPXL
1,396 = ES
2,626 = NQ

Setups:
Bull Flag:  A, CRM, DECK, DELL, F, FAS, LVS, MCP, MOS, RAX, RCL,  COH, CREE, GRPN, NKE, SWK, VMW, YELP, OSK

Horizontal Setup:  ROVI, BAC, JNPR, SMH, URI, ULTA

Diagonal Setup:  CRUS, DE, IBM, STI, TER

Moves:

Gap Up:  BIG,

Gap Down:  DRI, IACI, PCS, TSCO,

 

Breakout: CIEN, CMG, KAR

Bounce:  CHL

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56 of 100 NDX stocks closed higher on Tuesday…

Leading NDX 100 stocks included: NFLX, GMCR, APOL, STX, KLAC, NVDA, DELL, CA, INTC, YHOO

Lagging NDX stocks included: BIDU, WYNN, AAPL, ROST, CHKP, SIRI, EXPE, SBUX, WCRX, FFIV

Leading stocks > +2% on Tuesday included:  FSLR, TPX, TSL, CLF, CMG, ATI, CHL

Lagging stocks < -2.0% included: GRPN, SINA, LDK, NTES, MCP, SOHU, DECK, CRUS, LVS, TSLA

Stocks to Watch on Wednesday…

Holding Above 30 DMA = 62
YHOO, MYL, ORLY, CERN, RIMM, XRAY, PCLN, SBUX, QCOM, HSIC, GILD, NTAP, CSCO, EXPE, GMCR, VMED, ATVI, CHKP, EA, EXPD, LLTC, MXIM, PCAR, TXN,  XLNX, AMGN, BIIB, CELG, DLTR, EBAY, LIFE, SIAL, AMZN, FISV, ADSK, ALTR, AVGO, CHRW, DELL, FFIV, MAT, MRVL, MU, ORCL, AAPL, BRCM, INFY, SRCL, COST, KRFT, MNST, ADBE, ALXN, CMCSA, GOOG, GRMN, NWSA, SYMC, WYNN, AMAT, CTSH, PAYX

Moving Above 30 DMA = 8

ADP, APOL, FOSL, INTU, KLAC, NFLX, NVDA, VIAB

Moving Below 30 DMA = 5

BBBY, BMC, NUAN, SIRI, WCRX

Staying Below 30 DMA

SPLS, CTXS, LRCX, ISRG, WFM, LINTA, SHLD, FLEX, STX, AKAM, GOLD, MCHP, MSFT, PNRA, SNDK, FAST, INTC, BIDU, ESRX, VRSN, VRTX, VOD, DTV, CA, ROST

Fourteen Week Intermediate Term Market Trend: Neutral

Short Term Market Trend: Neutral