IWM, QQQ, SPY, DIA Get Hammered as MU, TSLA, GILD, GRMN, XLNX, ADSK, MYL, BRCM Form Hammers...AA Reports EPS Moves Higher...

Eight of nine sectors moved lower on Tuesday…XLU, XLE and XLP were the strongest sectors…XLY was the weakest sector.

Sector Posture – seven sectors are positive 

Positive trend: XLB, XLE, XLF, XLK, XLP, XLV, XLY

Neutral trend near resistance: XLU

Neutral trend near support: XLI

XLB, XLF, XLK, XLV and XLY are in bull flag price patterns.

                   (click image to enlarge)

Breadth strengthened…as decliners led advancers 1.55 to 1 on the NYSE and 3.85 to 1 on the NASDAQ.

Tuesday – strengthened, decliners led

Monday – weakened, decliners led

Friday - Holiday

Thursday - strengthened, advancers led

Wednesday – weakened, decliners led

Tuesday – strengthened, advancers led

SPY down 1.27 at 196.24 on 108 million shares

VIX up .65 at 11.98…

TNX down .52 at 25.65…

TLT up 1.25 at 112.74...

XLF down .20 at 22.74 on 34.3 million shares

AAPL down .62 at 95.35 on 65.13 million shares

FB down 2.53 at 62.76…on 68.8 million shares

Technical Commentary:

QQQ – 1.21%, IWM – 1.21%, SPY – 0.64%, DIA – 0.60%.

DIA, SPY, QQQ and IWM formed large red candles with a lower shadow, suggesting the broad indices may have found support following a two-day selloff.  SPY, DIA and QQQ are forming a potential bull flag pattern and found support at the 61.8% Fibonacci area.

NDX stocks were pounded to the downside on Tuesday as 84 of 100 stocks moved lower.  However, after two to four days of pullback MU, TSLA, GILD, GRMN, XLNX, ADSK, MYL, SNDK and BRCM formed hammer patterns.

                   (click image to enlarge)

After the close, AA +0.17, +1.14% gained on a positive earnings reaction, unofficially kicking off the start of earnings season.

Trade with the trend of the chart you are trading and continue to move your profit protection stops.  Continue to follow your rules.

Short-term up trend Chart Targets:

SPY = 198.12, 199.06…

QQQ = 94.89, 96.31…

IWM = 120.67, 121.76…

Support Levels

SPY = 196. 59, 194.13, 193.11…

QQQ = 93.57, 91.73, 90.44…

IWM = 116.65, 116.05, 114.66…

Earnings this week:

Monday –

Tuesday – AA, HTZ,

Wednesday –

Thursday – FDO,

Friday – FAST, WFC

Q2 Earnings Reactions

Positive Reactions – STZ, APOL, BKS, KBH, MON, MU, NKE, SCHN,

Negative Reactions – CAMP, BBBY, GIS, CCL, WAG,

Reversal in progress –

Reversal of Initial Reaction –

The SPY Market Forecast green line is rising in the upper zone at 92.

____________________

Setups

Horizontal Breakout:   

Diagonal Breakout:  

Bull Flag: AIG, ATI, BAC, BX, C, CREE, CTRP, DDD, ETFC, FAS, GLW, JCP, JDSU, MTW, NTES, P, QIHU, RCL, SCSS, SCTY, SPY, SSYS, SUNE, VJET, XONE, YELP, YNDX, YOKU, SINA, WLT, AMZN, BIDU, CELG, CMCSA, EBAY, EXPE, GILD, GOOG, GRMN, ILMN, INTC, MU, NFLX, NTAP, SBUX, SNKD, WDC, WYNN, XLNX,

Potential Bullish Divergence: 

Gap Up:  

Gap Down:

Bear Flag: 

At Support: CSIQ, IWM, MFRM, MS, SOHU, SWI, TSL, MNST, TRIP,

C- Pattern:

Moves

New Highs:    

H Breakout: COST,   

Diagonal Breakout:

Bull Flag Bounce:

Gap Up:

Gap Down: LVS,  

Breakout Test:

Bounce: 

MACD Divergence Bounce:    

Bear Flag:   

Support Break: AAL, ANGI, CIEN, CRM, FEYE, GOGO, LNKD, PANW, Z, ANR, KKD, ADBE, ADSK, AKAM, ESRX, FB,  

C- Pattern:

      

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16 of 100 NDX stocks closed higher on Tuesday.

Leading NDX 100 stocks included: PAYX, COST, MU, ROST

Lagging NDX stocks included: TRIP, ILMN, FB, CELG, AKAM, NFLX, WYNN, BIDU, AMZN, CA, YHOO

Leading stocks > +2% on Tuesday included: UAL

Lagging stocks < -2.0% included: FEYE, ANGI, P, SPLK, SSYS, SFUN, TWTR, YELP, UBNT, CSIQ, YNDX, YOKU, LNKD, VJET, SCTY, PANW

Stocks to Watch on Wednesday

Holding Above 30 DMA= 67

MAR, CHRW, SIAL, MU, SNDK, CHTR, AAPL, ADP, CELG, EQIX, NXPI, AVGO, ATVI, KRFT, GMCR, ILMN, ADSK, NFLX, CSCO, ADBE, AMAT, INTU, MSFT, BIDU, CMCSA, BRCM, GOOG, AKAM, AMGN, BIIB, EXPE, LLTC, SBUX, ALTR, TXN, ADI, GRMN, KLAC, INTC, STX, WDC, ORLY, SRCL, LMCA, XLNX, SYMC, CTSH, DISH, DTV, MAT, VRTX, FISV, GILD, SBAC, VIAB, DLTR, MDLZ, NTAP, EBAY, QCOM, REGN, VRSK, COST, PCAR, VIP, PAYX, SPLS

Moving Above 30 DMA = 0                        

Moving Below 30 DMA = 21

AMZN, CA, CTRX, CTXS, FAST, FB, FFIV, FOXA, HSIC, ISRG, LBTYA, LINTA, MNST, MYL, PCLN, SIRI, TRIP, TSLA, VOD, WYNN, YHOO

Staying Below 30 DMA

ALXN, CHKP, MXIM, NVDA, WFM, BBBY, CERN, DISCA, ROST, ESRX, EXPD, TSCO

Sixteen Week Intermediate Term Market Trend: Up

3-Day Short Term Market Trend: Down