Stocks Collapse as Institutions React to Bernanke Tapering Commentss with Heavy Selling...Support Break Entry...GME, TMUS Gain

All sectors moved lower again on Thursday… XLF, XLK and XLI were the strongest sectors…XLP was the weakest sector.

Breadth weakened…decliners led advancers…20.16 to 1 on the NYSE and 5.37 to 1 on the NASDAQ…

Thursday weakened, decliners led

Wednesday – weakened, decliners led

Tuesday – strengthened, advancers led

Monday – strengthened, advancers led

Friday – weakened, decliners led

SPY down 4.05…volume 321.2 million shares

VIX up 3.85 at 20.49…

TNX up 1.08 at 24.19…

TLT down 1.84 at 110.27...

XLF down .42 at 19.18…volume102.8 million shares                 

AAPL down 6.16 at 416.84…volume 12.7 million shares

FB down .41 at 23.90…volume 42.7 million shares

Technical Commentary:

IWM – 2.65%, SPY – 2.48%, QQQ – 2.38%, DIA – 2.32%.

Stock futures sold off Wednesday night and continued lower on Thursday as big money indicated that the Fed was more hawkish than expected.  Bernanke indicated that the Fed may taper $85 billion in monthly bond purchases towards the end of the year, which motivated institutions to accelerate profit-taking sending the SPY below its June 6 low of 160.25.  The support break created potential bearish entry signals on stocks on Thursday.

The SPY closed at 159.40, its 61.8% Fib support level off its April 18 low.

The Euro was down 70 pips to close at 1.3225.  TNX interest rates jumped to its highest close since Aug 5, 2011.  It’s March 2009 with institutions driving interest rates higher and bonds lower in anticipation of Fed tapering later this year.  TLT bonds -1.64% gapped lower.

While most stocks moved lower GME, TMUS, ZION and PNC moved higher.

ADBE -1.93% is forming an bull gap earnings flag after reporting earnings after the close Tuesday.

FB down 40 cents after announcing it was adding 15 second video to its Instagram service which is believed to have the potential to generate significant revenue for the company.

MU down 43 cents after reporting positive earnings after the close on Wednesday.

Trade what you see on the chart of your position.  The multi-month intermediate term trend is up, the four-week trend is down and the two-day short-term trend is support break down.  Chart Signals reiterates our Wednesday night guidance…Adjust stops, trade to targets and take bearish trades according to your rules as the month long consolidation continues.

Chart Signals Strategy Guidelines

When the market is trending up Chart Signals looks for support bounce and resistance breakout entries. 

When the market is trending down Chart signals looks for resistance pull back and support break entries. 

When the market is sideways in consolidation Chart Signals will look for support bounce, diagonal breakouts and pull backs at resistance where price action stays between support and resistance. 

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.

EPS Reaction Summary

EPS Gainers –  ADBE, ULTA, 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 – MU, CPRT, COST, 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 is below the Upper Zone and is pointed down. 

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Setups

H Breakout: 

Diagonal Breakout:    

Bull Flag: BBBY, CSCO,   

Potential Bullish Divergence:  

Gap Up:

Gap Down: 

Bear Flag: 

At Support:  ADSK, BIDU, CELG, CTSH, ESRX, FFIV, GILD, MAT, ORCL, QCOM, BAC, DDD,

Moves

New Highs:  GME, TBT,    

Gap Up:  GME, TBT

Gap Down: AMAT, AMGN, COST, DTV, EBAY, FAST, INTC, MNST, MSFT, ROST, SIRI, WDC, WYNN, XLNX, YHOO, ALK, C, CNX, FAS, FIVE, GLD, GS, JCP, LVS, PWRD, RCL, SINA, TIF, TLT, TPX,

H&D Breakout:   

Breakout Test:

Bounce:    

MACD Divergence Bounce:

Bear Flag:  

Support Break:  AKAM, ATVI, CMCSA, SHLD, STX, TXN, CRM, F, FSLR, SPY,

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1 of 100 NDX stocks closed higher on Thursday…

Leading NDX 100 stocks included:  CTXS

Lagging NDX stocks included:  GOLD, REGN, SHLD, FOSL, DRFT, EQIX, WYNN, MDLZ, AMAT, MNST, NFLX, CTRX, SNDK, STX, YHOO

Leading stocks > +2% on Thursday included: FAZ, TBT

Lagging stocks < -2.0% included:  TSL, LDK, URE, TPX, UCO, FAS, YELP, CDE, SGOC, FCX, CLF, LVS, VECO, GMCR, RCL, GLW, ZAGG, TIF, GS, DECK, GES, HLF, C, F

Stocks to Watch on Friday

Holding Above 30 DMA= 18

LIFE, STX, PCLN, MU, NTAP, SPLS, SNDK, AVGO, CSCO, ISRG, AMZN, SBUX, BBBY, EXPE, ORLY, LMCA, GOOG, ADBE

Moving Above 30 DMA = 0

Moving Below 30 DMA = 21

AMAT, CA, DELL, DLTR, ESRX, FOSL, HSIC, INTC, KLAC, MCHP, MNST, MSFT, MYL, NVDA, PCAR, WFM, XLNX, ADI, CTRX, WDC, NFLX

Staying Below 30 DMA

ADP, CERN, CHKP, CHRW, COST, DTV, EXPD, FISV, GRMN, LINTA, NUAN, ORCL, PAYX, ROST, SRCL, VOD, WYNN, YHOO, MDLZ, DISCA, VRSK, DRFT, BIDU, VRTX, GOLD, SIAL, TXN, BIIB, CTSH, INTU, SIRI, VIAB, LBTYA, REGN, AAPL, ALTR, FAST, LLTC, NWSA, AKAM, BMC, FFIV, XRAY, BRCM, CELG, GILD, ALXN, ATVI, CTXS, EBAY, MAT, CMCSA, SHLD, SBAC, QCOM, EQIX, ADSK, AMGN, SYMC, MXIM, FB

Four-Week Intermediate Term Market Trend: Down

Two-day Short Term Market Trend: Down