SPY, IWM Continue to Consolidate...AAPL Rallies, WDC, STX New High...TSLA Back to Breakout, Finds Support...

All nine sectors moved lower on Wednesday…XLF, XLE and XLK were the strongest sectors…XLP was the weakest sector.

Breadth weakened… decliners led advancers…3.97 to 1 on the NYSE and 2.28 to 1 on the NASDAQ…

Wednesday – weakened, decliners led

Tuesday – strengthened, advancers led

Monday – Memorial Day

Friday – weakened, decliners led

Thursday – strengthened, mixed

Wednesday – weakened, decliners led

SPY down 1.08 at 165.22…volume 160.3 million shares

VIX up .35 at 14.83…

TNX down .11 at 21.24…

TLT up 1.28 at 115.12...

XLF unchanged at 19.93…volume 48.2 million shares                 

AAPL up 3.51 at 444.95…volume 11.8 million shares

FB down .78 at 23.32…volume 64.2 million shares

Technical Commentary:

IWM – 0.93%, DIA – 0.68%, QQQ – 0.47%, and SPY – 0.65%.

Futures were lower overnight attributed to continued concerns that the Fed may taper asset purchases as early as June.  The SPY, IWM, QQQ and DIA gapped lower and made a higher low than last week before buyers created an intra-day support bounce.  Each formed a hammer candle pattern. 

Sectors XLB, XLE, XLF, XLI, XLK and XLY also made a higher low compared with last week.  XLP closed just below short-term support.  XLU moved lower.

TSLA -5.17% pulled back to its horizontal breakout level on Tuesday before buyers created a $5 support bounce.  Trading was a heavy 25.1 million shares, more than $2.5 billion total value on Wednesday.  TSLA had its second highest close.

AAPL +3.51 opened lower and moved higher closing at the high end of its consolidation area of the past week between 435 and 445.

AMZN, BIDU, GOOG and PCLN pulled back on Wednesday.    NFLX formed a bullish harami in its bull flag pattern.  Financial stocks GS, MS, C, BAC, WFC and JPM closed higher.

GILD formed a hammer in its ascending triangle consolidation pattern. 

The Euro moved up 87 pips to 1.2939.  TNX interest rates closed slightly lower and TLT bonds +1.28 formed a bullish harami.

Trade what you see on the chart of your position.  The intermediate term trend is up with short-term trend neutral in a bull flag consolidation.  Traders should lock in profits when targets are reached.  As always look for re-entry according to your rules.

Chart Signals Strategy Guidelines

Technical setups for short-term option trades be in and out by earnings release.

Over earnings release use earnings option strategies such as straddles, strangles, OTM calls or puts.

After earnings look for bullish setups in positive reaction stocks and bearish setups in negative reaction stocks.

Earnings this Week: SPLK, COST,

EPS Reaction Summary

EPS Gainers –  HPQ, NTAP, AZO, MDT, CSCO, A, MCP, WCRX, NVDA, PCLN, GMCR, GRPN, TSLA, EA, DVA, WFM, CTSH, DTV, LBTYA, AIG, ADP, CBOE, REGN, FB, BZH, EXPD, GM, MDC, STX, V, YELP, ICE, JRCC, VIAB, CMCSA, DDD, AVP, HLF, CERN, CVX, DHI, TWC, ANGI, AKAM, ALXN, ALTR, BIIB, COG, CLF, CROX, DOW, ESI, FFIV, HOG, LRCX, LVS, MO, PHM, RCL, SIAL, XLNX, BA, BRCM, GLW, HES, DAL, COH, DD, NFLX, ILMN, VECO, LCC, RF, ZION, TRV, LMT, CAT, CHKP, HAL, HAS, CMG, GOOG, KMB, STI, MSFT, BTU, PEP, UNP, VZ, MAT, AXP, JNJ, INTC, KO, C, APOL

EPS Losers – TSL, CRM, GME, SHLD, DISH, XRAY, ATVI, RAX, MNST, Z, LNKD, TPX, ZAGG, CTRX, GRMN, MRK, SWI, AMZN, BIDU, CRUS, DECK, EXPE, HSY, KLAC, MXIM, QCOM, PTEN, ABC, MMM, AMGN, T, JNPR, PNRA, VMW, GE, IBM, ISRG, MCD, MS, PM, UNH, SNDK, EBAY, BAC, USB, GS, LLTC

The Market Forecast Green Line closed below the Upper Zone pointed down.

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Setups

H Breakout:  BAC, C, CNX, GRPN, GS, JNPR, NTES, STI, SIRI, CSCO, FFIV, INTC, MSFT, XONE

Diagonal Breakout: SPY, IWM, QQQ, ANGI, ATI, BBRY, CMG, DDD, FAS, GLD, GLW, LVS, NFLX, RCL, SINA, SOHU, SSYS, UAL, UNG, YELP, SCSS, Z, SCTY, AAPL, ADBE, AMGN, BBBY, BIDU, CELG, CTSH, EBAY, GILD, ORCL, PCLN, QCOM, SNDK, YHOO,

Bull Flag: FSLR, NFLX, TIF, ATVI, BRCM, DTV, ESRX, GOOG, MAT, MNST, NVDA

Potential Bullish Divergence:

Gap Up:

Gap Down: 

Bear Flag:  SWI,

At Support:  ALK, ANR, CLF, CRM, PHM, LNKD, TLT, WLT,

Moves

New Highs: MU, STX, VECO, WDC, XLNX, CREE, F, ZION, PWRD, GS, JPM, C

Gap Up:

Gap Down:  

H&D Breakout:  CIEN,  

Breakout Test: TSLA

Bounce:  CREE, GMCR,

MACD Divergence Bounce:

Bear Flag:   RAX

Support Break:   FB

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25 of 100 NDX stocks closed higher on Wednesday…two were unchanged…

Leading NDX 100 stocks included: GOLD, SHLD, CERN, STX, WDC, XLNX, ADI, CHKP, CSCO, CTSH, SNDK, AAPL

Lagging NDX stocks included:  FB, MDLZ, ATVI, SBAC, EXPE, EQIX, CMCSA, SRCL, LINTA, ALXN

Leading stocks > +2% on Wednesday included: UCO, CIEN, CDE, JNPR, CREE, F, RVBD, VECO

Lagging stocks < -2.0% included:  TSL, CLF, TSLA, URE, LDK, ANR, UAL, X, TPX, HLF, TBT, GES

Stocks to Watch on Thursday

Holding Above 30 DMA= 70

ADP, GILD, BIIB, PAYX, YHOO, MSFT, REGN, LIFE, ROST, WYNN, INTC, DTV, NWSA, SBUX, VRTX, WFM, COST, WDC, AKAM, AMAT, GOOG, NVDA, SIAL, SIRI, STX, BMC, BRCM, CA, ALXN, ESRX, ORLY, PCAR, XLNX, CERN, AAPL, FOSL, KLAC, LINTA, CHKP, ORCL, VIAB, VMED, EXPD, GRMN, LLTC, MYL, PCLN, ADI, MU, NTAP, SPLS, ALTR, BIDU, HSIC, SNDK, AVGO, FFIV, ATVI, CSCO, FAST, DISCA, BBBY, DLTR, EBAY, ISRG, LBTYA, AMZN, CELG, MCHP, STRZA

Moving Above 30 DMA = 0

Moving Below 30 DMA = 6

FISV, MAT, SRCL, TXN, PRGO, MDLZ

Staying Below 30 DMA

CHRW, CMCSA, GOLD, MNST, SHLD, SBAC, QCOM, CTXS, VOD, XRAY, EQIX, VRSK, ADSK, ADBE, AMGN, EXPE, SYMC, MXIM, FB, CTRX, NUAN, CTSH, DELL, INTC

Five Month Intermediate Term Market Trend: Up

Short Term Market Trend: Neutral