NFLX Soars on EPS After- hours...IBM Lower...SPY Drifts Lower On Light Volume...

Three of ten sectors moved higher on Monday …XLU, XLRE and XLB were the strongest sectors while XLY was the weakest sector.  Oil futures fell 0.40 to close at 49.92.

Breadth weakened as decliners led 1,802 to 1,222 on the NYSE and led 1,666 to 1,126 on the NASDAQ.

Monday – weakened, decliners led, +3

Friday – strengthened, advancers led on the NYSE, +5

Thursday – weakened, decliners led, +4

Wednesday – strengthened, advancers led on the NYSE, +6

Tuesday – weakened, decliners led, +0

SPY down .74 at 212.38 on 57.5 million shares, 42% below average volume

VIX up .09 at 16.21

TLT up .84 at 132.43…on 10.0 million shares, 16% above average volume

Technical Commentary:

IWM -0.12%, QQQ -0.27%, DIA -0.31%, SPY -0.35%,

SPY drifted lower above support on Monday on one of its lightest trading volume of the year.  VIX closed barely higher and did not confirm the size of today’s pullback.  Light volume, a barely higher VIX and a relatively stronger small-cap index would indicate that last week’s support low is likely to hold.

However, the real determinate will be the institutional reaction to this week’s earnings announcements. 

Sideways trending HAS +5.66, +7.43% bounces from support to resistance after Q3 eps beat.

Down trending NEM +0.80, +2.34% bounces off support counter trend following Barclay’s upgrade Overweight and PT of $45.

Sideways trending WHR +2.26, +1.41% bounces after downgrade from MKM Partners from buy to neutral.

SPX Leaders: HAS, VMC, ILMN, NEM, FE, MLM, WRK, PEG, VRTX, DO, CF, WHR, SNA, WM, AES, CELG, AEP, ES, FBHS, NI, IP and PCG.

After the close: 

·         NFLX +19.32, +19.22% beat eps 12 cents to 6 cents estimate, beat on revenues and raised Q4 guidance.

·         IBM -4.80, -3.09%, beat on adj. eps of 3.29 vs. 3.23 estimate, but had flat revenues just below estimates.

·         UAL reports better than expected eps and revenues.

Earnings Announcements

Monday - BAC, HAS, NFLX, IBM, UAL

Tuesday – GS, HOG, JNJ, ISRG, INTC, LLTC,

Wednesday – HAL, MS, STI, STX, UNH, USB, AXP, URI, CTXS, EBAY, LRCX, MAT, TSCO, XLNX

Thursday – ALK, NUE, TRV, AAL, WBA, MSFT, MXIM, PYPL,

Friday – GE, HON, MCD, MCO, STI, SWN

EPS Positive Reactions

HAS, DAL, CSX, COST, RHT, FDX, ADBE

EPS Negative Reactions

AA, FAST, ILMN, MU, PAYX, CCL

EPS Neutral Reactions

BAC, C, JPM, PNC

Consider moving up stops on short term bullish trades that could pull back.  All according to your profit protection rules.

Remember breakouts typically test about 70% of the time.

Technical analysis based trades should be closed before earnings. After-hours

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: NVDA, LVS, WB, AAPL, ADBE, ADSK, AMZN, CTRP,  GOOG, LRCX, NCLH, NXPI, QCOM, SWKS, ULTA, WDC, APA, CAVM, LITE, JPM, BAC, C, STI, ZION, MS, UAL, RCL, CCL, URBN, HA, ETFC, SCHW, SOXL, FL,

Bull Flag Bounces include:  

Horizontal Breakout Setups include: HAS, NFLX, AKAM, AAL, CSX, DISH, DAL, SAVE, JBLU, SCHN, SE, CHK,

Horizontal Breakout include: HAS, ILMN, MLM, WRK, DO,

New Highs include: NTES, LUV, ALK, EXPE

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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 is pointed down at 27, defensive. 

26 of 100 NDX stocks closed higher and two were unchanged on Monday.

27 NDX stocks are above their 30 DMA.

NDX Stocks to Watch on Tuesday:

Moving Above 30 DMA = 1

TMUS

Moving Below 30 DMA = 5

AVGO, MSFT, ORLY, SBAC, WFM

6-month Intermediate Term Market Trend: Up

3-day Short Term Market Trend: Down