SPY, DIA, IWM, QQQ Bounce after MACD Histogram Bullish Divergence and Hammer on Thursday...Shift Short-term, Bullish...

Eight of nine sectors moved higher on Friday…XLK, XLV and XLB were the strongest sectors while XLP was the weakest sector.  Oil futures fell .29 to close at 48.48.

For the week ended May 20, XLE +1.80%, XLF +1.44%, XLK +1.23%, XLV +0.80%, XLB +0.72%,

led SPY +0.63% 

Lagging sectors XLI -0.04%%, XLY -0.52%, XLP -2.03%, XLU -2.23%,

YTD 97

Leading Sectors: XLU +11.58%, XLE +9.68%, XLB +6.59%, XLI +3.81%, XLP +3.31%,

SPY +0.79%,

Lagging Sectors: XLK -0.23%, XLY -0.59%, XLF -2.60%, XLV –3.25%, 

Breadth strengthened as advancers led 2,499 to 595 on the NYSE and led 1,959 to 637 on the NASDAQ.

Friday – strengthened, advancers led

Thursday - weakened, decliners led

Wednesday – strengthened, mixed

Tuesday – weakened, decliners led

Monday – strengthened, advancers led

SPY up 1.29 at 205.49 on 104.9 million shares, 26% above average volume

VIX down 1.13 at 15.20

TLT up .10 at 130.15…on 5.3 million shares, 19% below average volume

Technical Commentary:

IWM +1.68%, QQQ +1.10%, SPY +0.63%, DIA +0.40%,

SPY, DIA and QQQ confirmed Thursday’s hammer candle with a move above the high of the hammer on Friday.  SPY, DIA, IWM and QQQ all bounced above the bullish candle on Thursday and triggered an entry on their MACD histogram bullish divergence pattern.

SPY, QQQ and IWM all were higher for the week for the first time in three weeks.  IWM and QQQ formed weekly hammers while SPY formed a white spinning top on the weekly chart.

The multi-week trend has been up since Feb 11 and after three weeks the market appears to be making a higher low support, indicating with Friday’s momentum bounce that the multi-week up trend is likely to resume.

Earning’s Announcements:

Positive Reactions:  KEYS, AMAT

Negative Reactions: FL, CPB, DE, ROST

It is important to be defensive until a price bounce occurs.

Technical analysis based trades should be closed before earnings.

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:  ATVI, EA, CA, BSX, FB, LUK, FISV, JEC, DLR, NWL, MNST, MDT, NOC, LMT, CMG, TSN, GLPI, NEM, A, ALB, CL, CLR, HLF, PPC, RSPP, STWD, SYY, WM, YELP

Bull Flag Bounces include:  AMZN, SVXY, NTES, WRK, EGN, GD, JNJ, AEM, CLB, CNP, CRZO, FMC, OKE, VMW, VTR, WWAV, XEC, XYL

Horizontal Breakout Setups include: AAPL, ADI, AKAM, BMRN, MAT, MXIM, NFLX, NTES, SWKS, TMUS, WDC, XLE, ZION, STI, ETFC, WMB, MRK, SWN, FTNT, AFL, ADBE, AGN, CTXS, REGN, MRO, JPM, NXPI, BAC, C, MS,

Horizontal Breakout include: MU, LRCX, QCOM, TXN, DD, WFM, 

Bullish Divergence Bounce include: SPY, IWM, QQQ, DIA, XLF, FAS, XLB, XLK, AVGO, CMCSA, AXP, ADP, NUE,

Bullish Divergence Setups include: XLP, XLV, XLI, PCAR, ORCL, UTX, CAT, EW, FLIR, NUE, STLD, SCHN, FCX, SWN

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Short-term Movers:

SPX gainers:  WMB, MCK, QRVO, URBN, URI, APA, CMA, WMT, CFG, ETFC, TYC, RL, EY, SCHW, PVH, FITB, MRO, FCX, LOW, PRGO, CRM, BBT, ADB, HBAN, RF, UNM, A, DVN, NFX, JCI, NTRS, ZION, COH, STI, BXLT, HAL, LNC, BAC, DD, MNK, BBY, DRI, REGN, MOS, GLW, RCL, LM, C, B, AMP, IVZ, KMX, PNC, 4

SPX losers:  HRL, WRK, CPB, CHK, TGT, O, HST, TSN, DE, BAX, HCP, MCD, LB, KIM, FTR, FL, DUK, HCN, IRM, BXP, ES, VS, CCE, 4

NDX gainers:  AMAT, MU, WDC, ENDP NTES, CHTR, NVDA, STX, BIDU, NXPI, SWKS, QCOM, TSLA, INCLY, MYL, CSCO, NFLX, AAPL, NTAP AVGO, BMRN, REGN, VRTX, WFM, LLTC, JD, VOD, LNX, ADI, LRCX, 3

NDX losers:  DISCA, PYPL, PCAR, ROST, KHC, 3

YTD:

SPX Leaders:  NEM, OKE, RRC, SWN, FCX, MLM, IRM, NRG, EQT, XEC (299, -2 > 10p 122, -19)

SPX Losers:  HRB, PRGO, LB, CF, MPC, ABC, GPS, AGN, FOSL, ADS

NDX Leaders:  NVDA, CHTR, AMAT, ISRG, KHC, ULTA, PCAR, MAT, FB, FISV (38, -1)

NDX Losers:  ENDP, LMCA, STX, WDC, VRTX, REGN, INCY, JD, ILMN, ALXN

DJI Leaders:  XOM, WMT, UNH, CVX, JNJ, MMM, VZ, IBM, PFE, MRK (17, +1)

DJI Losers:  GS, INTC, BA, NKE, AAPL, MSFT, AXP, GE, DIS, JPM

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 SPY MFC green line turned up at 28, short-term bullish.

83 of 100 NDX stocks closed higher on Friday.

41 NDX stocks are above their 30 DMA.

NDX Stocks to Watch on Monday:

Moving Above 30 DMA = 18

AKAM, AMAT, BMRN, CHTR, CMCSA, ESRX, EXPE, INTU, ISRG, LLTC, MU, MXIM, NTAP, SIRI, TRIP, TXN, VRTX, XLNX

Moving Below 30 DMA = 1

YHOO

6-month Intermediate Term Market Trend: Neutral

3-day Short Term Market Trend: Up