Small Caps Lead on Pause Day That Rises...

Seven of nine sectors moved higher on Wednesday…XLE, XLF and XLU were the strongest sectors while XLU was the weakest sector.  Oil futures rise +.84 to close at 34.73. 

                         

Breadth weakened as advancers led decliners 2.02 to 1 on the NYSE and 1.93 to 1 on the NASDAQ.

Wednesday – weakened, advancers led

Tuesday – strengthened, advancers led

Monday – weakened, mixed

Friday – mixed, advancers led

Thursday - strengthened, advancers led

SPY up .89 at 199.00 on 102.4 million shares, 29% below average volume

VIX down .61 at 17.09…

TNX up .14 at 18.48…

TLT up .53 at 128.96…on 7.0 million shares, 30% below average volume

XLF up .24 at 22.04…on 73.0 million shares, 2% below average volume

AAPL up .22 at 100.75 on 33.1 million shares, 31% below average volume

FB up .13 at 109.95 on 25.6 million shares, 41% below average volume

Technical Commentary:

IWM +1.03%, SPY +0.45%, DIA +0.22%, QQQ +0.04%.

Small cap IWM led the broad market ETFs on Wednesday.  Small cap gainers included: DAR, ESPR, DYN, TNET, XON, EXAS, UNFI, MNKD, MTDR, CLS, SYRG, PCRX, GSAT, BLUE and SEMG.

The SPX was led by gains in CHK, FCX, MRO, MUR, DVN, ESV, RRC, SWN, APA, RIG, NRG, CPGX, NBL, APC, CXO, COP, HES, OKE, AA and COG.

The VIX 17.09made its lowest close in 2016 and its lowest close since Dec 29, confirming the continuing rise today in SPX.

Seventeen of 30 Dow stocks rose on Wednesday led by gains in XOM, PG, IBM, VZ, CVX, MRK, GE, JPM, MSFT, AXP, INTC and UTX.

The NDX was led by gains in MU, ENDP VRTX, WDC, ROST, STX, NXPI, MXIM, LMCA, COST, SIRI, QCOM, ADI, AKAM, SNDK and MAT

DAR +2.37, +25.93% on positive earnings reaction.

ROST +1.51, +2.69% on positive earnings reaction.

Last Thursday SPY broke out of double bottom resistance at 194.58 on Feb 1 with a six-week chart target of 208.07.  Monday’s pullback test was successful and old resistance became a new level of buying or new support on Tuesday.  The 208 price target which on Monday may have looked unrealistic to some now appears achievable as SPY continued higher on Wednesday.

Trade what you see, not…

Stocks below support should generally be traded bearishly until a reversal pattern forms.

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Strong Stocks: Setups and Moves You Can Use

Bull Flag Setups include:  EBAY, CTRP, MYL, HD, DLTR, ATVI, FISV, KHC, XLP, XLU, MAT, DD, MAR,

Bull Flag Bounces include: XOM, PG,

Horizontal Breakout Setups include:  XOM, PG, ORLY, XLV, DIS, EXPE, LBTYA, CSCO, ADP, CA, SBUX, UNH, ILMN, NKE, BA, DIS, INTC, CTSH, TRIP, SWKS, AVGO, PCAR, MXIM

Horizontal Breakouts include: PCLN, NTAP, FB, IBM, TRV, HAS, STX, MXIM

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Short-term Movers:

SPX gainers:  CHK, MRO, FCX, NFX, RRC, RIG, CNX, OKE, APC, ESV, SIG, MUR, PWR, WRK, QRVO, SCHW, MOS, CRM, AMG, HES, NRG, COG, H, CPGX,DVN, C, ETFC, COP, ADSK, BAC, LNC, ZION, CFG, LM, MS, PXD, AA, MU, PVH, UNM, FITB, F, RF, CF, PRU, URI, DO, STX, MHK, MET, LEN, HBAN, HCN, APA, VTR, BHI, WY, SWKS, NUE, DLPH, NOV, IVZ, WDC, STI, NTR, TRIP, BK, HAR, BEN, PYPL, KEY, SNDK, HCP, VWA, FOSL, ADI, PSX, NVL, ALXN, GT, WYNN, VRTX, WFM, HOG, FDX,XRX, NFLX, SLG, MCO, GGP, LUK  6.5

SPX losers:  POM, SWN, BF/B, ICE, EQR, OI, MON, EOG, D, ES, CLX, NEE, PPL, HRB, PDCO

NDX gainers:  BMRN, ADSK, MU, STX, BIDU, SWKS, NXPI, WDC, LMCA, TRIP, PYPL, SNDK, ADI, ALXN,VRTX, WFM, NFLX, CTXS, BIIB, YHOO, LVNTA, DISCA, KHC, SIRI, ADBE, SYMC, LRCX, NCLH, TMUS, TSLA, DISH, ILMN, AVGO  5

NDX losers:  ENDP, DLTR, MNST, CTRP, LLTC, FISV, MYL, EBAY

YTD:

SPX Leaders:  NEM, KORS, FOSL, FCX, M, SE, KMI, COG, CTL, TSN (228, +8)

SPX Losers: ESV, WMB, MPC, DVN, MRO, RCL, URI, CHK, CBG ADS

NDX Leaders:  MAT, FAST, PCAR, PYPL, ROST, AKAM, HSIC, KHC, FISV, ORLY   (30, +0)

NDX Losers:  INCY, ENDP, VRTX, REGN, TRIP, TSLA, WDC, ALXN, ESRX, ILMN

DJI Leaders:  VZ, WMT, XOM, MMM, JNJ, PG, UNH, CAT, KO, MCD (10, -1)

DJI Losers: AXP, BA, GS, INTC, JPM, DIS, PFE, DD, HD, MSFT

Remember:  “It’s a market of stocks, not just a stock market.”

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 up at 94. 

46 of 100 NDX stocks closed higher and one was unchanged on Wednesday.

90 NDX stocks are above their 30 DMA.

NDX Stocks to Watch on Thursday:

Moving Above 30 DMA = 0

Moving Below 30 DMA = 4

CTRP, CTSH, EBAY, MNST

6-month Intermediate Term Market Trend: Neutral

3-day Short Term Market Trend: Up