Stocks Have Strong Gain...Bullish Engulfing For SPY & DIA...

All nine sectors moved higher on Monday…XLE, XLP and XLU were the strongest sectors while XLY was again the weakest sector. 

Breadth strengthened as advancers led decliners 2.69 to 1 on the NYSE and 1.56 to on the NASDAQ.

Monday – strengthened, advancers led

Friday – strengthened, decliners led

Thursday – weakened, decliners led

Wednesday – weakened, decliners led

Tuesday – strengthened, advancers led on NYSE

SPY up 3.08 at 205.62 on 116.7 million shares, 12% above average volume

VIX down 1.92 at 18.16… more than Friday’s rise

TNX down .07 at 22.73…

TLT down .11 at 119.57…on 5.4 million shares

XLF up .29 at 24.21…on 43.0 million shares

AAPL up 1.83 at 114.17 on 37.8 million shares, 17% below average volume

FB up .09 at 104.04 on 49.2 million shares, 84% above average volume

Technical Commentary:

SPY +1.52%, QQQ +1.44%, DIA +1.40%, IWM +0.86%.

The SPY rose 3.08 on Monday 78 cents more than Friday’s decline and formed a bullish engulfing pattern, generally a sign of strong buying that is likely to continue.  The SPY, QQQ and DIA closed above their 30 DMA.

Overnight the ES S&P futures hit a low of 1,998.50 when buyers took over and the futures rose to 2,016 by the open at 9:30 am ET.  The ES Dec future closed at 2,048.25 also forming a bullish engulfing pattern.

The SPX made a low just after the open at 2,019 just above the 2,017 support mentioned in Friday’s post.  Indeed there was support at 2,017 as buyers bought leaders like FLIR, NFLX, CSC, LLL, NOC, ARG, RTN, PHM, VIAB, AA, ST, LMT and TXT.  Energy stocks RRC, COG, CNX, WMB, SWN, CPGX, NBL, COP, NFX, MUR, MRO, and CVX were also among the leaders on Monday.

Consumer discretionary stocks were positive on Monday, although they were the weakest sector.  FOSL and URBN moved lower on Monday.  URBN -5.73% after-hours, reported earnings after the close.  Rebounding from Friday’s selloff were AMZN, JWN, JCP, GME, ROST, DLTR, KSS and TJX.  AMZN +0.85% is a classic bull flag with a hammer.

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

The SPX MFC green line is pointed down at 71.  The MFC green line is a lagging indicator and you should follow entry signals according to the chart you are trading.

Short-term Chart Targets:

SPY =...207.06…

QQQ = 111.69, 113.23…

IWM = 115.34, 116.49…

Support Levels

SPY = 202.21, 201.65, 199.30

QQQ = 109.05

IWM = 113.10

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Setups

Horizontal Breakout: SFUN

Bull Flag: QQQ, AMZN, ETFC, JPM, MS, SCHW, BAC, WFC, ATVI, CTXS, EBAY, GRMN, LMCA, MNST, NVDA, BABA, JBLU, NTES, QRVO, ADBE, ADSK, FSLR, GLW, LNKD, STI, CMCSA, ESRX, GILD, GOOGL, SBUX, SNDK, XLNX

Moves

New Highs: VRSN 

Bull Flag Bounce: SPY, BABA, CIEN,  JBL, JUNO, SLCA, SOHU, UBNT, BIDU, COST, JD, LRCX, MSFT, BA

MACD Divergence Bounce: AA, UA, AKAM, STX, WDC,

Bounce: IWM, QQQ, AIG, AMBA, CRM, FAS, FIT, GME, HABT, JNPR, KWEB, NKE, PYPL, SINA, SONC, SPWR, SVXY, TAN, TPX, TSL, ULTA, V, VSLR, W, AAPL, AVGO, BRCM, CELG, GMCR, MAR, NFLX, QCOM, ROST, SWKS, TRIP, TSLA, TXN, WBA, WFM, WYNN, YHOO

Gap Down: CCL, DAL, EXPE, UAL, PCLN

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86 of 100 NDX stocks closed higher on Monday.

50 NDX stocks are above their 30 DMA.

NDX Stocks to Watch on Tuesday:

Moving Above 30 DMA = 14

ALXN, AMGN, AVGO, BRCM, CMCSA, COST, CTXS, FAST, GRMN, JD, LLTC, MAT, NFLX, ORLY  

Moving Below 30 DMA = 1

LBTYA

6-month Intermediate Term Market Trend: Neutral

3-day Short Term Market Trend: Down