Four of nine sectors moved higher on Friday… and one was unchanged…XLU, XLP and XLK were the strongest sectors…XLY was the weakest sector.
Breadth strengthened…advancers led decliners…1.36 to 1 on the NYSE and decliners led advancers 1.07 to 1 on the NASDAQ…
Friday - mixed
Thursday - mixed
Wednesday – strengthened, advancers led
Tuesday – strengthened, advancers led
Monday – Labor Day Holiday
SPY up .08 at 166.04…volume 159.7 million shares
VIX up .08…at 15.85…
TNX down .41 at 29.38…
TLT up .51 at 103.05...
XLF unchanged at 19.80…volume 39 million shares
AAPL up 2.95 at 498.22…volume 12.8 million shares
FB up 1.29 at 43.95…volume 117.5 million shares
IWM + 0.27%, QQQ + 0.12%, SPY + 0.05%, DIA – 0.02%.
Stocks finished higher on Friday led by the small-cap RUT, IWM but not before and early morning fade the gap moved had a sharp correction to the downside which not only filled the gap but fell below Thursday’s low. After a sharp 30-minute pullback that ended shortly after 10 a.m. eastern stocks recovered back near their gap high before drifting lower into the close finishing slightly higher than Thursday. A classic gap, fade and bounce to shake weak traders out.
Remember, if you had your stop tight under Thursday’s candle and got stopped out, the trader’s art is to re-enter the trend when it continues, whether that is in one week, one day or one hour.
The SPY and IWM both closed just below their 30 DMA while QQQ has been above its 30 DMA for three days. Short-term trend is still up while QQQ is setting up a potential horizontal resistance breakout to a new high. The MACD divergence bounce from last week looks to continue to the upside.
The NDX +3.44 was led by points from AAPL, FB, EBAY and AMZN while AMGN, CSCO and MSFT weighed on the downside.
FB should be the big obvious for technical traders as the conviction level of big money continued on Friday. All-time closing high on volume 117.4 million shares that was more than double Thursday’s 49.9 million shares. Traders who don’t know what they don’t know may be thinking that big money is ridiculous for buying FB at Friday’s level. If that were true why don’t those traders have more money than big money? Just a thought.
Remember it is big money that creates and sustains the trend. As Granville once wrote, “technical analysis is the art of tracking the market, following the footsteps of the ‘smart money’ crowd. The ‘smart money crowd’ is no mysterious ‘THEY.’ It is simply a collection of people who are reading the market correctly, seeing through the maze, unconfused by this hall of mirrors.”
Short-term market posture continues defensive.
ES = 1,647, 1,629, 1,611
SPY = 165.15, 163.35, 161.55
Q2 Earnings Reactions
Positive Reactions – CIEN, SPLK, CRM, GES, DSW, ADSK, ROST, GME, JRCC, RAX, SSYS, TMUS, SGMS, FWLT, MNST, GRPN, TSLA, AGU, BOFI, FOSL, ADM, MGM, WPO, CNK, KORS, SATS, MGM, EAT, VIAB, YOKU, AIG, CTRX, CHK, COP, LNKD, MELI, MYL, NUS, ZAGG, CMCSA, CTRP, GRMN, HES, MA, MCHP, SODA, YELP, QCOR, FISV, BWLD, MTW, VRTX, WYNN, SWK, SBUX, ALK, AMZN, CELG, CB, CLF, GILD, IP, MXIM, RCL, HSY, UA, UAL, V, FB, BIDU, TRIP, COG, CTXS, ETFC, FFIV, AKAM, AAPL, EA, VMW, DAL, LCC, EMC, LLY, MCO, AKS, FCX, BTU, UTX, HAS, TXN, GE, HON, SLB, STI, WHR, CHKP, CMG, JCI, KEY, MS, OSTK, SWKS, UNP, UNH, BAC, IBM, SNDK, XLNX, CSX, GS, URI, YHOO, C, WFC
Negative Reactions – P, SHLD, PWRD, CREE, MCP, GMCR, SCTY, SUNE, Z, CAR, CHRW, FSLR, LINTA, ANR, CVX, CME, XOM, K, DTV, RVBD, X, COH, DISCA, ESRX, SOHU, DLR, CERN, CRUS, DECK, DNKN, EXPE, KLAC, POT, PCP, SWI, TPX, EQIX, ABC, CROX, ANGI, ATI, CAT, WDC, PNRA, STX, NSC, USNA, TRV, MCD, MO, NFLX, ZION, BHI, AMD, GOOG, ISRG, MSFT, EBAY, INTC, MAT, SCSS, USB, AXP, KO, MOS
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.
The Market Forecast Green Line is pointed up.
H Breakout: AAPL, AMAT, AMGN, BIDU, CELG, DELL, ESRX, INTC, NTAP, NUAN, NVDA, PCLN, SIRI, SNDK, TXN, WYNN, XLNX, YHOO, ANR, ATI, BBRY, CMG, CNX, CREE, F, GRPN, JNPR, RAX, SINA, TBT, WLT, YOKU,
Diagonal Breakout: GOOG, STX, WDC, WFM, BAC, C, CLF, DNKN, PWRD, SPY, SWI,
Bull Flag: TSLA, CRM, DDD, GMCR, SSYS,
Potential Bullish Divergence:
At Support: MSFT,
New Highs: FB, MU, QCOM, CIEN, LNKD, LVS, SPLK,
Gap Down: MFRM, SCSS,
H&D Breakout: CTSH, EBAY, FAS, JCP, YELP,
MACD Divergence Bounce:
Support Break: MFRM,
52 of 100 NDX stocks closed higher on Friday.
Leading NDX 100 stocks included: EXPE, FB, NUAN, BIDU, CTSH, EXPD, EBAY, ADP,LINTA, XRAY,CELG, ESRX, FISV, VRTX, MDLZ, SBAC
Lagging NDX stocks included: EQIX, FOSL, SHLD, TSLA, AMGN, MYL, MNST, FAST, SIRI, MXIM, BRCM, LBTYA
Leading stocks > +2% on Friday included: YELP, CDE, URE, JDSU, UCO, CIEN
Lagging stocks < -2.0% included: MFRM, SCSS, CRUS, Z, GMCR, SINA, DDD
Stocks to Watch on Monday
Holding Above 30 DMA= 58
TSLA, GRMN, PCLN, FB, VIAB, NFLX, QCOM, AAPL, WYNN, DELL, GOLD, NVDA, ADSK, AMGN, AVGO, BMC, CTSH, GILD, SBAC, VOD, NUAN, SHLD, AKAM, ALTR, BIIB, CELG, EXPD, FOXA, LIFE, MU, MXIM, NTAP, REGN, ROST, VRSK, YHOO, ADBE, ADP, ALXN, CHRW, DLTR, INTC, INTU, KALC, SNDK, TXN, XLNX, AMZN, BRCM, CTRX, FAST, GOOG, LINTA, LMCA, SIRI, VRTX, WDC, XRAY
Moving Above 30 DMA = 4
EBAY, ESRX, EXPE, FISV
Moving Below 30 DMA = 5
AMAT, ATVI, EQIX, MYL, SBUX
Staying Below 30 DMA
LBTYA, BIDU, SYMC, FOSL, MSFT, CTXS, CA, CHKP, ISRG, ORLY, FFIV, MDLZ, PAYX, SPLS, SIAL, HSIC, ADI, CSCO, LLTC, MCHP, SRCL, BBBY, CMCSA, DISCA, PCAR, MNST, COST, CERN, KRFT, DTV, STX, MAT
Thirteen Week Intermediate Term Market Trend: Neutral5-Day Short Term Market Trend: Up