Friday, November 22, 2013

SPY, DIA, IWM, QQQ New High Close...SPLK, BIIB, TWC Gap Higher...UAL, ALK, DAL, LCC Fly to New Highs...

Seven of nine sectors moved higher on Friday…XLV, XLI and XLY were the strongest sectors…while XLK was the weakest sector. 
 
Breadth weakened slightly on the NASDAQ…advancers led decliners…1.60 to 1 on the NYSE and 1.62 to 1 on the NASDAQ.
 
Friday – weakened slightly, advancers led
Thursday – strengthened, advancers led
Wednesday – strengthened slightly, decliners led
Tuesday – weakened, decliners led
Monday – weakened, decliners led
 
 
SPY up .90 at 180.81…volume 81.2 million shares
VIX down .40 at 12.26…
TNX down .32 at 27.52…
TLT up .96 at 103.91...
XLF up .10 at 21.49 volume 27.7 million shares
 
AAPL down 1.34 at 519.80…volume 7.9 million shares
FB down .47 at 46.23…volume 40.5 million shares
 
Technical Commentary: 
 DIA + 0.34%, IWM + 0.49%, SPY + 0.50%, QQQ + 0.54%.
 
The SPY, DIA, QQQ and IWM each made a new high close on Friday.  For all but the QQQ that is an all-time new high close.  During the past 12 months the SPY has gained +32.46% as of Friday’s close.  Prior to this week there have been seven noticeable corrections in Dec, Feb, Apr, May/Jun, Aug, Oct and Nov.  All but one have pulled back between -2.53% (Nov) and -4.69%.  The May/Jun correction was the longest, 33 days, and was down -7.45%.    
 
The SPY did not go straight up but zig zagged its way higher making higher highs and higher lows, the classic definition of an uptrend.  Corrections occurred on average every seven weeks.  The SPY had another pullback, a three day correction from Monday to Wednesday, falling -1.97%. 
 
These high profile companies that are both in the SP500 and NDX100, except for BIDU and FB which are in the NDX100 only, each outperformed, except for AAPL, the SPX.  Each of these individual stocks did not go straight up but also zig zagged their way to higher highs and higher lows.  Each of these stocks during the past 12 months also had larger drawdown corrections than the largest -7.45% SPY correction, meaning the higher return also had higher temporary drawdowns.
 
12 months ending Nov 22, 2013
AAPL -6.1%
AMZN +56.11%
BIDU +66.73%
FB +86.98%
GOOG +54.25%
MSFT +42.15%
NFLX +317%
PCLN +80.68%
(click image to enlarge)

(click image to enlarge)
 
 
MU +0.20, +1.00% closed at a new ten-year high on Friday.  SPLK +13.66, +22.80% gapped up following earnings after the close on Thursday.  Airline stocks UAL, ALK, DAL and LCC hit new highs on Friday as did UPS.
 
BA +3.04, +2.29% was a classic bull flag bounce on Friday worth seeing even if you didn’t trade it.
(click image to enlarge) 
 
Chart Signals knows that it is important to realize that as a trader you don’t know the future and that your favorite market commentator or the television talking heads don’t know the future either, but it is the charts themselves that give, through the buying and selling actions shown, the most objective estimate of future price action.  Of course when new information becomes known that will be factored into the price action which will at times change the trend prior to a chart target.
 
With Friday’s breakout new short term chart targets are established.
 
Chart Targets:
SPY = 182.06, 183.02
QQQ = 85.14, 85.77
IWM = 112.83, 114.39
 
 
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 SPY posture is down.
Support Levels
ES = 1,774, 1,736
SPY = 177.64, 174.76
QQQ = 83.48, 82.77, 81.37
IWM = 107.93
 
 
Q3 Earnings Reactions
Positive Reactions – SPLK, MRVL, GMCR, JCP, LZB, JKS, BRCD, TSN, YOKU, SINA, NTAP, SLXP, PCLN, NVDA, GRPN, AWAY, PRU, TPX, TSO, CTSH, FSLR, TRMB, MDVN, NATI, SPR, ONNN, EXPE, CRR, HAR, GTI, ATML, THOR, TRN, FLT, MCHP, ITT, DICSA, ANR, SWKS, FB, CMCSA, GILD, DWA, LVLT, EA, SEE, SPW, TFX, JCI, X, XRAY, XYL, JLL, PBI, ALR, HUN, ACT, DECK, AMZN, MSFT, FLS, AVY, ALXN, WOOF, COG, BA, CLGX, ESI, EQIX, WLL, TSCO, RRD, PHM, RCL, ALXN, APOL, BCR, NDAQ, NSC, WHR, ILMN, NUS, GNTX, LXK, DD, VFC, CMG, GOOG, BHI, GE, KSU, MS, SLB, STI, LVS, VZ, SNDK, NUE, BTU, AXP, KEY, STLD, URI, USB, INTC, JNJ, SCHW, COST, AA
 
Negative Reactions – ROST, GME, BBY, CPB, JEC, TSL, CRM, CSCO, RAX, MNST, QCOM, SCTY, IPGP, AIG, BRKR, HME, NEM, XLS, Z, NIHD, AVP, WTW, ROVI, GRMN, JDSU, OSK, CNW, ITRI, CTRX, KRFT, GRMN, MYL, DLR, XCO, WU, LNKD, IACI, MSM, INGR, HTS, VRTX, AAPL, PMCS, MWV, SOHU, AGNC, AGCO, PCL, GT, CMI, VSH, ALSN, ROP, EW, MRK,  RYN, RMD, NCR, KBR, FSL, ESRX, EMN, FIO, SIRI, CAM, TKR, SYMC, CVA, CDNS, AKAM, XRX, CRI, ORLY, CAT, NFLX, COH, ZION, WAT, EMC, UTX, TXN, HON, ISRG, GS, UNP, UNH, EBAY, IBM, XLNX, SCSS, 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 above 80.   
 
____________________
 
Setups 
H Breakout: AMZN, CTSH, ESRX, GOOG, MSFT, NUAN, SBUX, TXN, WDC, AXP, CVX, GS, MCD, MRK, MSFT, NKE, PFE, PG, UTX, V, ATI, C, CMG, NKE, P, SWKS, V, Z
 
Diagonal Breakout: AAPL, AMAT, FFIV, MNST, WYNN, XLNX, CNX, DNKN, LVS, PWRD, QIHU, YNDX, ZION,
 
Bull Flag: BIDU, MAT, DD, GE, HD, XOM,
 
Potential Bullish Divergence: 
 
Gap Up:
 
Gap Down:
 
Bear Flag:
 
At Support: GRPN, WLT, YELP,  
 
C- Pattern:
 
Moves
New Highs: SPY, ADSK, CELG, CMCSA, COST, GILD, MU, MYL, QCOM, YHOO, DIS, JNJ, JPM, MMM, TRV, WMT, ALK, FAS, RCL, STI, UAL, VRSN,
 
Gap Up: SPLK, BIIB, MRVL, GILD, CELG, TLT, TWC, CVC
 
Gap Down: ROST, TBT, X,
 
H Breakout: ADSK, CELG, CMCSA, COST, QCOM, RCL, STI, JNPR,
 
D Breakout:
 
Breakout Test:
 
Bounce: BA, NKE, WMT, DTV, ALK, ATI, BBRY, BX, CNX, DDD, DNKN, ESI, GLW, GME, GS, LCC, DAL, UAL, LVS, MFRM, QIHU, SCSS, SOHU, STI, SWI, SWK, TLT, VRSN, YOKU,
 
MACD Divergence Bounce: CREE
 
Bear Flag:  
 
Support Break: CLF,
 
 
______________________
 
 
57 out of 100 NDX stocks closed higher on Friday and one was unchanged.
 
Leading NDX 100 stocks included: BIIB, REGN, CHTR, ADSK, CMCSA, GILD, LMCA, DTV, CELG, LBTYA, SHLD
 
Lagging NDX stocks included: ROST, INTC, GMCR, INTU, CTRX, FB, NVDA, WFM, GOLD, SYMC, EXPE
 
Leading stocks > +2% on Friday included: SPLK, UAL, BBRY, QIHU, YOKU, GME, CNX, JNPR, UNG
 
Lagging stocks < -2.0% included: GRPN, KKD, JCP, RAX, SCTY, X, FSLR, TSL, Z, SPWR, TWTR, YELP
 
Stocks to Watch on Monday
Holding Above 30 DMA= 55
CTSH, VOD, ADBE, SBUX, MSFT, XRAY, AAPL, HSIC, FISV, FOSL, INTU, LINTA, PAYX, WDC, CHKP, GOOG, ADP, AMZN, MAT, DISCA, CA, COST, LLTC, TXN, ADI, MCHP, MU, EXPE, NFLX, ADSK, ESRX, ISRG, ALXN, GILD, MYL, PCLN, MDLZ, MNST, SHLD, YHOO,  QCOM, NTAP, SRCL, BIDU, SIAL, CELG, BIIB, GRMN, ATVI, CERN, CMCSA, CTXS, KLAC, LBTYA, GMCR
 
Moving Above 30 DMA = 6
BBBY, DTV, NUAN, STX, REGN, CHTR
 
Moving Below 30 DMA = 3
INTC, ROST, SYMC
 
Staying Below 30 DMA
AMGN, DLTR, GOLD, NVDA, SNDK, SBAC, CHRW, WYNN, BRCM, PCAR, SIRI, EQIX, FOXA, EBAY, SPLS, AVGO, CSCO, VIAB, AMAT, VIP, WFM, CTRX, KRFT,  VRSK, LMCA, TSLA, EXPD, FAST, VRTX, FB, MXIM, AKAM, ORLY, FFIV, ALTR, XLNX
 
 
Sixteen Week Intermediate Term Market Trend: Up
3-Day Short Term Market Trend: Up

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