All nine sectors moved higher on Wednesday…XLF,
XLV and XLE were the strongest
sectors…XLI was the weakest
sector.
Breadth strengthened…advancers led
decliners…4.02 to
1 on the NYSE and
2.52 to 1 on the NASDAQ.
Wednesday – strengthened, advancers led
Tuesday – weakened,
decliners led
Monday – strengthened,
advancers led
Friday – weakened,
advancers led
Thursday – strengthened,
advancers led
SPY up 2.37 at 172.07…volume 161.6 million shares
VIX down 3.95 at 14.71…
TNX down .49 at 26.71…
TLT up 1.31 at 105.85...
XLF up .42 at 20.68 volume 75.4 million shares
AAPL up 2.43 at 501.11…volume 8.9 million shares
FB up 1.64 at 51.13…volume 64.6 million shares
Technical
Commentary:
QQQ +
1.13%, IWM + 1.24%, SPY + 1.40%, DIA + 1.44%.
Today a deal was reached on the
budget and debt ceiling impasse. It has
been approved in the Senate and is expected to pass the House this
evening. The lifting of uncertainty seemed
to a catalyst for buyers to step in with above average volume on Wednesday.
QQQ, IWM, XLV and XLE broke through horizontal
resistance and made new highs. SPY,
XLF, XLK and XLY are near horizontal resistance and are setting up to a
potential breakout. Numerous stocks made
new highs and many are at horizontal resistance. VIX -21.17%
collapsed confirming the big move up.
FB +1.63,
+3.30% made its
third highest close today at 51.13, just 11 cents below its all-time high close
on Sep 27.
After the
close SCSS, IBM, EBAY and XLNX gapped down
on negative earnings reactions.
We are not
surprised by this move and no one who has really been looking at the weight of
the evidence on the charts the past week should be either.
It appears
that a debt default has been avoided and that this trend is poised to go
higher. Remember on breakouts we expect
about 70% to pause and return to the area of the breakout. Strongest stocks keep rising.
Resistance Chart Targets:
QQQ = 81.87, 83.17
IWM = 110.96, 112.83
SPY = 172.76
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
is SPY up.
Support Levels
ES = 1,685, 1,672,
1,660, 1,641
SPY = 168.33, 167.08,
165.31, 164.62
QQQ = 78.40, 77.36,
76.79, 75.99
IWM = 105.82, 104.85,
103.90, 102.94
Earnings to Watch
Monday –
Tuesday – KO, CSX, INTC, JNJ, LLTC, SCHW, YHOO
Wednesday – AXP, BAC, EBAY, IBM, KEY, MAT, PEP, SNDK, SCSS, SWK, STLD,
USB, URI, XLNX
Thursday – CMG, GOOG, GS,
ISRG, LVS, NUE, BTU, UNP, UNH, VZ
Friday – BHI, GE, HON, KSU, MS, SLB, STI
Q3 Earnings Reactions
Positive Reactions – BAC,
KEY, PEP, SCHW, INTC, JNJ, COST, AA,
Negative Reactions – SWK,
MU, FAST
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.
____________________
Setups
H Breakout: AAPL, AKAM, FB, MAT,
MNST, MSFT, NFLX, ROST, SIRI, SNDK, TSLA, TXN, WDC, ALK, ATI, CLF, CREE, FAS,
NKE, P, SCTY, SPY, SSYS, UNG, VRSN, WLT, ZION, MFRM, NKE, BA,
Diagonal Breakout: BBBY,
GOOG, MYL, QCOM, CRM, GRPN, RCL, SWKS, Z, MU, XONE,
Bull Flag: ADBE, ATVI,
CTSH, CMG, X
Potential Bullish
Divergence:
Gap Up: SNDK, STLD,
Gap Down: SCSS, IBM, EBAY, XLNX,
Bear Flag: RAX, ANR,
RCL, Z,
At Support: NTAP, SCSS,
Moves
New Highs: QQQ, IWM,
XLE, XLV, CELG, CMCSA, GILD, GRMN, WDC, WYNN, DNKN, YNDX, LVS,
Gap Up: AMGN,
Gap Down: SWK,
H&D Breakout: STX,
SYMC, JNPR, STI, A, DDD, FSLR, KKD, QIHU, MA, ZION,
Breakout Test:
Bounce: SPY, TLT, CIEN,
F, FIVE, GRPN, GS, NTES, P, SCTY, SOHU, SPLK, SWI, V, YELP
MACD Divergence
Bounce:
Bear Flag:
Support Break:
______________________
84 of 100 NDX stocks
closed higher on Wednesday.
Leading NDX 100 stocks included: REGN, SPLS, FB,
GILD, GRMN, LMCA, VRTX, MDLZ, ISRG, AMGN, ALXN, LINTA, ORLY, CERN, FOSL, STX,
DISCA
Lagging NDX stocks included: GOLD, ATVI, NUAN, CTSH, LLTC
Leading stocks > +2% on Wednesday
included: FAS, ZAGG, JNPR, JCP, C, CRM, URE, YELP, GS, RCL, UCO, DDD,
Z, SWI, GRPN, BAC, VMW, V, CIEN
Lagging stocks < -2.0% included: SWK, FAZ, AKS, XONE, TBT
Stocks to Watch on
Thursday
Holding Above 30 DMA= 60
GRMN, FB,
WYNN, ADSK, AVGO, CTSH, VOD, MXIM, ROST, YHOO, ADBE, DLTR, SNDK, WFM, CHTR,
BIDU, MYL, SBUX, STX, AMAT, CERN, CMCSA, BBBY, MSFT, XRAY, VRSK, ISRG, AAPL,
HSIC, SPLS, AKAM, ATVI, CELG, FISV, FOSL, GILD, INTC, INTU, KLAC, LINTA, ORLY,
PAYX, PCAR, PCLN, SIRI, SRCL, TXN, SBAC, WDC, LMCA, FOXA, CHKP, DTV, TSLA,
MNST, VIAB, NFLX, ESRX, GOOG, QCOM
Moving Above 30 DMA = 16
ADP, AMGN, AMZN, BIIB, BRCM, COST,
DELL, MAT, MCHP, NVDA, SYMC, XLNX, MDLZ, DISCA, REGN, KRFT
Moving Below 30 DMA = 0
Staying Below 30 DMA
EBAY, FFIV, LLTC, MU,
EXPE, SHLD, FST, ALXN, SIAL,LBTYA, CHRW, EXPD, NTAP, ALTR, EQIX, CA, ADI, CSCO,
CTXS, NUAN, GMCR, GOLD, VRTX, CTRX
Sixteen Week Intermediate
Term Market Trend: Up
5-Day Short Term Market
Trend: Up
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