Futures Pointing to a Lower Open...

2:25 pm ET - The SPX has broken the 925 line but has been finding a resting level at 920 - 922, the May 29 high, also the 20 DMA area...no bounce yet...we'll see if buyers step in or sellers remain in control... 10:35 am ET - The SPX has rolled again and is at its key 925 support area...if support fails to hold the charts indicate further movement to the next level of support at 910 the 200 DMA... 10:10 am ET - The SPX has found early support around 928 and has bounced to 930.50...the ES is also starting to rise after hitting a low of 923...this morning's selloff is being attributed to a stronger dollar and lower stock prices in Asia and Europe...two positions in the Model Portfolio were stopped out this morning TDG at 36.54 and TRLG at 20.88, TDG was just above breakeven and TRLG posted a 5% gain... 9:51 am ET - The SPX has pulled back to support in the 928 are in the first 20 minutes of trading...watch for a potential support bounce... BMO - ES -10 and NQ -13 are lower in pre-market trading pointing to a lower open. The trend of the last two weeks is a narrow sideways trading range of 29 points so watch as price nears support for either a bounce (most probable) or support break. Look at these charts... (click image to enlarge) At the Open on Monday SPY – white candle USD – hammer FAS – pennant URE – white spinning top WYNN – hammer SHLD –hammer DDS – bullish engulfing AMZN – hammer NTAP – large white candle DECK – doji MICC – hammer APOL – hammer GOOG – hammer FWLT – ascending triangle GR – bullish engulfing GES – hammer

Learn the Discipline

Learn the Discipline Model Portfolio Summary - Week 19 During the past four weeks there have been more activities to complete than the time I had (same as everyone else) to complete them. Something had to wait and it was the compiled weekly summary of the Model Portfolio. The Model Portfolio has continued to operate during this time with some new positions, some positions being stopped out, a small number of futures trades and a lot of positions rising in value. I finally have some time that was available and I am working on the weekly update today...so stay tuned...

We'll be back will the detailed review...briefly the portfolio since inception, Feb. 2, is up 24.48% vs. 14.63% for the SPX. That is 67.35% better than the SPX even though the portfolio has not been fully invested like the SPX. Currently the portfolio is 74.30% invested in stocks and 25.7% in cash.

April to June trades

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March trades (click image to enlarge)

SPX New High Close...Barely...

DJIA + 28.32, +0.32% SP500 + 1.32, +0.14% NASDAQ Comp. - 3.57, -0.19% Russell 2000 + 0.75, +0.14% Exchange NYSE NASD Advancing 1,348 1,262 Declining 1,626 1,461 Oil $72.04 -$0.64 Gold $940.10 -$20.10 SOX 274.79 -4.95 VIX 28.15 +0.04 The VIX moved up and did NOT confirm the move up in the SPX on Friday. Both indices were near unchanged so this should be viewed as more of an anomaly than a signal. Strongest Sectors: XLU +1.26%...XLP +0.77%...XLF +0.64% Weakest Sectors: XLB -1.02%...XLE -0.96%...XLK -0.27% Five of nine sectors moved higher on Friday. Utilities, Consumer Staples, Financials, Healthcare and Industrials were stronger than the SPX +0.14%. Financial stocks stronger than XLF +0.64%: BAC, SPG, KEY, RF, WFC, SCHW, USB, IVZ, MS, ZION and ETFS UYG and FAS. Leading tech stocks stronger than XLK -0.27% include: SYMC, MSFT, HPQ, EMC, YHOO, DELL, T, AMAT, AMT, VZ, QCOM, TXN and INTC. Sector Watch Up Trending: Horizontal Breakout: XLB, XLK, XLY, XLE Sideways: XLV, XLF, XLP, XLI, XLU Down Trending: XLU closed above its 200 DMA on Friday, leaving only XLV as the only sector that is still below its 200 DMA. SPX Key resistance levels: 944 – 956 = January/June horizontal 962 = 161.8% Fib extension Key support levels: 925 - 930 = horizontal 911 = 200 DMA 899 = May 28 S1 875 = horizontal The SPX stayed within its sidesway trading range of the past 10 days again finishing with a narrow trading range of 29 points.

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Stocks to Watch on Monday Leading Stocks Holding Above 30 DMA BIDU, CLB, ICE, VPRT, CTSH, BAP, CAM, GMCR, ATW, GR, EBAY, TRLG, HDB, PCP, RIMM, UYG, HLF, AMX, K, PCLN, VAR, PCR, PPD, SWN, FLS, TDG, NIHD, RCI, JOYG, MUR, PSYS, CHL, MOS, DV, AXYS, BIIB, BYI, CPLA, SPWRA, SYNA, X, MCD, BDX, CBST, AAPL, GES, GXDX, ORCL, RBN, USD, WRC, DECK, FAS, CPLA, JEC, MYGN, PWR, AMZN, DV, JCOM, SNA, SNHY, STRA, BLUD, GILD, SLGN, JW.A, ACN, APEI, MON Moving Above 30 DMA = 3 ESRX, PSYS, URE Moving Below 30 DMA = 3 DLTR, EZPW, WAB Staying Below 30 DMA FSLR, WCG, WMT, DLB, JOSB, AFAM, MHS, NTLS, ESI, HANS, AMED, PETS, ALGT, NFLX, GME, GPRO, BKC Intermediate Term Market Trend: Neutral Short Term Market Trend: Neutral

Futures Pointing to a Slightly Lower Open...

10:00 am ET - Consumer sentiment reading comes in at 69 below forecast...SPX moves lower as soon as announcement is released... BMO - ES -4 and NQ -4 are lower in pre-market trading pointing to a slightly lower open. Consumer Sentiment numbers are to be released about 25 minutes after the open. Forecasts call for a 70.0 reading. Lower than expected number could push prices toward support while a better than expected reading could push prices toward resistance. Expect the markets to continue their recent trading range of the past two weeks between support 925 and resistance 945 - 955. Look at these charts... (click image to enlarge) At the Open on Friday SPY – USD – ISRG – SHLD – DDS – NTAP – DECK – MICC – FAS –

SPX Pushes on Resistance...

DJIA + 31.90, +0.37% SP500 + 5.74, +0.61% NASDAQ Comp. + 9.29, +0.50% Russell 2000 + 2.37, +0.45% Exchange NYSE NASD Advancing 1,871 1,753 Declining 1,160 969 Oil $72.68 +$1.35 Gold $961.30 +$7.30 SOX 279.74 -3.46 VIX 28.11 -0.35 The VIX moved down and did confirm the move up in the SPX on Thursday. Strongest Sectors: XLE +2.00%...XLU +1.94%...XLB +1.40% Weakest Sectors: XLY -0.50%...XLI -0.17%...XLK +0.38% Seven of nine sectors moved higher on Thursday. Energy, Utilities, Materials, Healthcare and Financials were stronger than the SPX +0.61%. Financial stocks stronger than XLF +0.81: RF, BAC, KEY, CME, ZION, IVZ, BK, ICE, PNC, STT, USBK AFL and ETF FAS. Leading tech stocks stronger than XLK +0.38% include: DELL, AMAT, T, EMC, EBAY, MSFT, HPW, IBM, ORCL, ADBE, CSCO and VZ. Sector Watch Up Trending: Horizontal Breakout: XLB, XLK, XLY, XLE Sideways: XLV, XLF, XLP, XLI, XLU Down Trending: SPX Key resistance levels: 944 = January horizontal 962 = 161.8% Fib extension Key support levels: 930 = horizontal & 200 DMA 913 = Friday’s S1 907 = Friday’s S2 899 = Thursday’s S1 875 = horizontal The SPX rose from Wednesday’s low at 928 to reach 956 mid-day on Thursday before sellers pushed the index to 944.89 at the close. Thursday’s price movement from support to resistance and back to support followed the trading pattern of the past two weeks. The SPX 956 high was its highest level since last November. Key Nasdaq stocks RIMM, TEVA, ATVI, C,CSA, EBAY MSFT, ORCL, BIDU, ADBE, CSCO and CELG moved higher. SYMC, FSLR, GENZ, AMZN, DTV and GOOG moved lower. Oil again rose to its highest level since last November. Index Commentary The DJIA formed a shooting star… three month chart target 10,340…volume was a below average 249 million shares …closed above its 20, 30, 50 and 200 DMA. The SPX formed a shooting star …3 month chart target of 1,075…closed above its 20, 30, 50 and 200 DMA. The Nasdaq formed a shooting star…3 month chart target of 2,065…closed above its 20, 30 50 and 200 DMA. The RUT formed a shooting star….3 month chart target 606…closed above its 20, 30, 50 and 200 DMA. Stocks to Watch on Friday Leading Stocks Holding Above 30 DMA BIDU, CLB, ICE, VPRT, CTSH, BAP, CAM, GMCR, ATW, GR, EBAY, TRLG, HDB, PCP, RIMM, UYG, HLF, AMX, K, PCLN, VAR, PCR, PPD, SWN, FLS, TDG, NIHD, RCI, JOYG, MUR, PSYS, CHL, MOS, DV, AXYS, BIIB, BYI, CPLA, SPWRA, SYNA, X, MCD, BDX, CBST, AAPL, DLTR, GES, GXDX, ORCL, RBN, USD, WRC, DECK, FAS, CPLA, JEC, MYGN, PWR, AMZN, DV, EZPW, JCOM, SNA, SNHY, STRA, BLUD, GILD, SLGN, JW.A, ACN Moving Above 30 DMA = 3 APEI, WAB, MON Moving Below 30 DMA = 5 ESRX, FSLR, WCG, WMT, URE Staying Below 30 DMA DLB, PSYS, JOSB, AFAM, MHS, NTLS, ESI, HANS, URE, AMED, PETS, PWR, ALGT, NFLX, GME, GPRO, BKC Intermediate Term Market Trend: Neutral Short Term Market Trend: Neutral

Retail Sales and Jobless Claims Impact the Open...

BMO - ES +1 and NQ +3 are slightly higher in pre-market trading pointing to a flat or slightly higher open. At 8:30 am ET both the Jobless Claims and Retail Sales reports are due for release and likely will have an impact on the opening. Jobless claims are forecasted at 625K and Retail Sales at +0.6%...so watch for these announcements before the open. Look at these charts... (click image to enlarge) At the Open on Thursday SPY – black spinning top at resistance KOL – black spinning top USD – hanging man FAS – black candle JOYG – black spinning top BIDU – bearish engulfing ADBE – white spinning top X – white candle horizontal breakout +6.11% ISRG – doji above 200 DMA FWLT – black spinning top SHLD – black spinning top UNG – black spinning top NTAP – black spinning top ZION – black spinning top CTV – black spinning top AAPL – black spinning top confirm hanging man RIMM – black spinning top VPRT – white candle continuation support bounce +4.01% DECK – white candle 200 DMA breakout +2.39% MICC – black spinning top at 20 DMA GES – bearish engulfing TRLG – bearish engulfing DDS – dragonfly doji SCHN – large white candle breakout continuation +5.06% MRVL – hanging man bounce at S1

Gap Up, Fade, Rally...End Near Unchanged...

DJIA - 24.04, -0.27% SP500 - 3.28, -0.35% NASDAQ Comp. - 7.73, -0.38% Russell 2000 - 4.22, -0.80% Exchange NYSE NASD Advancing 1,352 1,064 Declining 1,622 1,647 Oil $71.33 +$1.32 Gold $954.10 +$0.10 SOX 283.20 +0.56 VIX 28.46 +0.19 The VIX moved up and did confirm the move down in the SPX on Wednesday. Strongest Sectors: XLU +1.56%...XLE +0.90%...XLK +0.27% Weakest Sectors: XLF -1.52%...XLY -1.48%...XLP -1.11% Four of nine sectors moved higher on Tuesday. Utilities, Energy, Technology and Materials were stronger than the SPX -0.35%. Financial stocks stronger than XLF -1.52%: C, CB, MMC, IVZ, AOC, USB, TRV, BAC, KEY, AFL, AXP, BK, JPM, SPG and RF. Leading tech stocks stronger than XLK +0.27% include: MA, DELL, SFT, ADBE, VZ and T. Sector Watch Up Trending: Horizontal Breakout: XLB, XLK, XLY, XLE Sideways: XLV, XLF, XLP, XLI, XLU Down Trending: SPX Key resistance levels: 944 = January horizontal 962 = 161.8% Fib extension Key support levels: 930 = horizontal & 200 DMA 913 = Friday’s S1 907 = Friday’s S2 899 = Thursday’s S1 875 = horizontal The SPX looked like it could potentially break through the 950 horizontal resistance at the open this morning only to turn into another roller coaster ride as it sold off to the 930 support followed by a late day rally to close near unchanged. This is the same trading pattern as last Friday. The SPX closed down -0.35% which took back Tuesday’s +0.35% gain. Two days of trading and the SPX is essentially were it was on Monday’s close 939.14. Wednesday’s trading action extends the narrow trading range between 925 and 950 into its seventh day. Essentially the pattern is shaping up as a horizontal bull flag which is a trend continuation pattern. Light volume in a flag pattern suggests that there are not that many traders that are locking in profits at these price levels. Why? Generally it would because those holding stocks that could sell with profits at this level are not doing so because they believe prices will go higher and it is in their best interest to hold for greater profits. Once light selling drives price to support, buyers are moving prices back up on similarly light volume suggesting that the low volume selling pressure is exhausted. The lack of heavy selling at the highest price levels in seven months is a bullish indication. Key Nasdaq stocks MSFT, FSLR, RIMM, ADBE, DTV, ATVI, INTC and QCOM moved higher. EBAY, SYMC, TEVA, AMZN, CSCO, GILD and GOOG moved moderately lower. Oil again rose to its highest level since last November. Index Commentary The DJIA formed a black spinning top… three month chart target 10,340…volume was a below average 219 million shares …closed above its 20, 30, 50 and 200 DMA. The SPX formed a black spinning top …3 month chart target of 1,075…closed above its 20, 30, 50 and 200 DMA. The Nasdaq formed a black spinning top…3 month chart target of 2,065…closed above its 20, 30 50 and 200 DMA. The RUT formed a black spinning top….3 month chart target 606…closed above its 20, 30, 50 and 200 DMA. At the Open on Wednesday SPY – black spinning top at resistance KOL – black spinning top USD – hanging man FAS – black candle JOYG – black spinning top BIDU – bearish engulfing ADBE – white spinning top X – white candle horizontal breakout +6.11% ISRG – doji above 200 DMA FWLT – black spinning top SHLD – black spinning top UNG – black spinning top NTAP – black spinning top ZION – black spinning top CTV – black spinning top AAPL – black spinning top confirm hanging man RIMM – black spinning top VPRT – white candle continuation support bounce +4.01% DECK – white candle 200 DMA breakout +2.39% MICC – black spinning top at 20 DMA GES – bearish engulfing TRLG – bearish engulfing DDS – dragonfly doji SCHN – large white candle breakout continuation +5.06% MRVL – hanging man bounce at S1 Stocks to Watch on Thursday Leading Stocks Holding Above 30 DMA BIDU, CLB, ICE, VPRT, CTSH, BAP, CAM, GMCR, ATW, GR, EBAY, TRLG, HDB, PCP, RIMM, WCG, UYG, HLF, AMX, K, PCLN, VAR, PCR, PPD, SWN, FLS, TDG, NIHD, RCI, JOYG, MUR, PSYS, CHL, MOS, DV, AXYS, BIIB, BYI, CPLA, SPWRA, SYNA, X, MCD, BDX, CBST, AAPL, DLTR, ESRX, GES, GXDX, ORCL, RBN, USD, WRC, DECK, FAS, WMT, CPLA, JEC, MYGN, PWR, URE, AMZN, DV, EZPW, JCOM, SNA, SNHY, STRA, BLUD, GILD, SLGN, JW.A, ACN Moving Above 30 DMA = 1 FSLR Moving Below 30 DMA = 2 DLB, PSYS Staying Below 30 DMA JOSB, AFAM, MHS, NTLS, APEI, WAB, ESI, HANS, URE, MON, AMED, PETS, PWR, ALGT, NFLX, GME, GPRO, BKC Intermediate Term Market Trend: Neutral Short Term Market Trend: Neutral

Futures Pointing to a Higher Opening...

BMO - ES + 11 and NQ +12 are higher in pre-market trading pointing to a higher opening. This is exactly where the market was last Friday morning pushing through the 950 horizontal resistance. If you remember the market sold off after the open and finished near support. We will obviously be watching this morning's trading will great interest to see if Wednesday will be another "fade the gap" day like last Friday or if we have are successful breakout on our hands... ES is at 951...NQ is at 1,513...SPY +0.94 at 95.58 in pre-market trading... Look at these charts... (click image to enlarge) At the Open on Wednesday SPY – doji at resistance KOL – white spinning top +2.86% USD – white candle +8.26% FAS – doji +1.92% JOYG – shooting star +2.99% BIDU – white spinning top +1.73% ADBE – white spinning top +2.06% X – horizontal breakout +7.87% ISRG – white candle above 200 DMA +2.80% FWLT – white spinning top +2.95% SHLD – black spinning top UNG – doji NTAP – white candle bull flag support bounce +2.74% ZION – white spinning top +2.30% CTV – bull flag support bounce confirm hammer +4.65% AAPL – hanging man RIMM doji at horizontal resistance VPRT – large white candle support bounce breakout +6.76% DECK – large white candle resistance breakout +4.68% MICC – black spinning top at 20 DMA GES – spinning top at horizontal resistance TRLG – spinning top at horizontal breakout +1.44% DDS – bull flag bounce confirm hammer SCHN – large white candle horizontal breakout MRVL – bull flag bounce horizontal breakout

Consolidation Continues...Nasdaq Rises...

DJIA - 1.43, -0.02% SP500 + 3.29, +0.35% NASDAQ Comp. + 17.73, +0.96% Russell 2000 + 3.14, +0.60% Exchange NYSE NASD Advancing 1,796 1,629 Declining 1,155 1,072 Oil $70.01 +$1.92 Gold $954.00 +$2.30 SOX 282.64 +12.05 VIX 28.27 -1.50 The VIX moved down and did confirm the move up in the SPX on Tuesday. The VIX had its lowest close in the VIX since September 12, 2008. Strongest Sectors: XLB +1.79%...XLE +0.96%...XLF +0.73% Weakest Sectors: XLP -0.89%...XLV -0.51%...XLU -0.26% Five of nine sectors moved higher on Tuesday. Materials, Energy, Financials, Consumer Discretionary and Technology were stronger than the SPX +0.35%. Financial stocks stronger than XLF +0.73%: TROW, AXP, KEY, IVZ, ZION, PNC, STT, NTRS, MMC, SCHW, WFC, BK, MET and ETF FAS. Leading tech stocks stronger than XLK +0.44% include: TXN, GLW, AMT, INTC, DELL, SYMC, ADBE, AMAT, QCOM, MA, YHOO, CSCO, IBM, ORCL, and VZ. Sector Watch Up Trending: Horizontal Breakout: XLB, XLK, XLY, XLE Sideways: XLV, XLF, XLP, XLI, XLU Down Trending: SPX Key resistance levels: 944 = January horizontal 962 = 161.8% Fib extension Key support levels: 930 = horizontal & 200 DMA 913 = Friday’s S1 907 = Friday’s S2 899 = Thursday’s S1 875 = horizontal On Tuesday CSCO and TRV both rose slightly on their second day as a DJIA component. Both stocks are at horizontal resistance with a potential for a breakout to the upside. Tuesday’s trading followed the narrow congestion pattern of the past five trading days going back to last Tuesday. The SPX rose to 945 resistance early and then sold off to the 937 area only to rise during the afternoon back to 946. During the last hour the SPX sold off once again to end the day at 942.42. Watch again on Wednesday for a break of resistance or support. Remember the market is in a 13 week up trend and all four broad indices are above their 200 DMA as well as their shorter 20, 30 and 50 DMA. In an interesting reversal of strength from Monday when only the DJIA was positive, on Tuesday the DJIA was negative while the SPX, Nasdaq and RUT were all positive. Once again the DJIA volume was below average indicating that there is not a lot of selling occurring at this price level which in a consolidation pattern of an up trend is bullish. Many individual stocks made strong moves even though the indices other than the Nasdaq were near unchanged. The Nasdaq was the strongest index on Tuesday rising 17 points or +0.96%. Key Nasdaq stocks INTC, DTV, SYMC, ADBE, BIDU, QCOM, GENZ, BIIB, CSCO, TEVA, AMZN, ORCL, CELG and EBAY moved higher. AAPL, GOOG, FSLR, ATVI, AMGN and ATVI moved moderately lower. Fifteen of our At the Open on Tuesday list stocks showed much stronger gains than the indices on Tuesday. See the list below... Oil rose to its highest level since last November. Index Commentary The DJIA formed a doji… three month chart target 10,340…volume was a below average 187 million shares …closed above its 20, 30, 50 and 200 DMA. The SPX formed a white spinning top …3 month chart target of 1,075…closed above its 20, 30, 50 and 200 DMA. The Nasdaq formed a white spinning top which is a new high close…3 month chart target of 2,065…closed above its 20, 30 50 and 200 DMA. The RUT formed a white spinning top….3 month chart target 606…closed above its 20, 30, 50 and 200 DMA. At the Open on Tuesday SPY – doji at resistance KOL – white spinning top +2.86% USD – white candle +8.26% FAS – doji +1.92% JOYG – shooting star +2.99% BIDU – white spinning top +1.73% ADBE – white spinning top +2.06% X – horizontal breakout +7.87% ISRG – white candle above 200 DMA +2.80% FWLT – white spinning top +2.95% SHLD – black spinning top UNG – doji NTAP – white candle bull flag support bounce +2.74% ZION – white spinning top +2.30% CTV – bull flag support bounce confirm hammer +4.65% AAPL – hanging man RIMM doji at horizontal resistance VPRT – large white candle support bounce breakout +6.76% DECK – large white candle resistance breakout +4.68% MICC – black spinning top at 20 DMA GES – spinning top at horizontal resistance TRLG – spinning top at horizontal breakout +1.44% Stocks to Watch on Wednesday Leading Stocks Holding Above 30 DMA BIDU, CLB, ICE, VPRT, CTSH, BAP, CAM, GMCR, ATW, GR, EBAY, TRLG, HDB, PCP, RIMM, WCG, UYG, HLF, AMX, K, PCLN, VAR, PCR, PPD, SWN, FLS, TDG, NIHD, RCI, JOYG, MUR, PSYS, CHL, MOS, DV, AXYS, BIIB, BYI, CPLA, SPWRA, SYNA, X, MCD, BDX, CBST, AAPL, DLTR, ESRX, GES, GXDX, ORCL, RBN, USD, WRC, DECK, FAS, WMT, CPLA, JEC, MYGN, PWR, URE, AMZN, DV, EZPW, JCOM, JOSB, SNA, SNHY, STRA, BLUD, GILD, SLGN, JW.A, FSLR Moving Above 30 DMA = 2 ACN, DLB Moving Below 30 DMA = 1 JOSB Staying Below 30 DMA AFAM, MHS, NTLS, APEI, WAB, ESI, HANS, URE, MON, AMED, PETS, PWR, ALGT, NFLX, GME, GPRO, BKC Intermediate Term Market Trend: Neutral Short Term Market Trend: Neutral

Futures Pointing to a Flat to Higher Opening...

BMO - ES +2 and NQ +5 are slighty higher in pre-market trading pointing to a flat to slightly higher open. SPX resistance of 945 to 950 is just above Monday's SPX close of 939.14. Market is still consolidating which is a trend continuation pattern not trend reversal. You must look to and trade trend first and be mentally prepared for trend reversal which is a lower probability at this time... Look at these charts... (click image to enlarge) At the Open on Tuesday SPY – spinning top KOL – hammer USD – white spinning top FAS – white spinning top JOYG – doji BIDU – white hanging man ADBE – black spinning top X – doji ISRG – black spinning top above 200 DMA FWLT – black spinning top SHLD – white spinning top UNG – doji NTAP – white spinning top ZION – doji CTV – hammer AAPL – doji RIMM – white spinning top at horizontal resistance VPRT – white spinning top DECK – white candle at horizontal resistance potential breakout MICC – black spinning top at 20 DMA GES – spinning top at horizontal resistance TRLG – doji on horizontal breakout

Doji Tuesday...

DJIA + 1.36, +0.02% SP500 - 0.95, -0.10% NASDAQ Comp. - 7.02, -0.38% Russell 2000 - 5.57, -1.05% Exchange NYSE NASD Advancing 1,081 1,064 Declining 1,856 1,678 Oil $68.09 -$0.35 Gold $951.70 -$10.00 SOX 270.59 -0.15 VIX 29.77 +0.15 The VIX moved up and did confirm the move down in the SPX on Monday. By the end of the day indices were essentially unchanged. Strongest Sectors: XLY +0.92%...XLF +0.73%...XLP +0.38% Weakest Sectors: XLV -1.09%...XLU -0.63%...XLK -0.60% Four of nine sectors moved higher on Monday. Consumer Discretionary, Financials, Consumer Staples and Industrials were stronger than the SPX -0.10%. Financial stocks stronger than XLF +0.73%: MET, PNC, ICE, AXP, WFC, JPM, USB, RF, BAC, MS, ALL, MMC, BK, TROW, IVZ, AFL, AOC and ETFs UYG and FAS. Leading tech stocks stronger than XLK +0.99% include: DELL, ORCL, SYMC, TXN, IBM, HPQ, VZ, CSCO, INTC, QCOM, GLW, EMC, MSFT and AAPL. Sector Watch Up Trending: Horizontal Breakout: XLB, XLK, XLY, XLE Sideways: XLV, XLF, XLP, XLI, XLU Down Trending: SPX Key resistance levels: 944 = January horizontal 962 = 161.8% Fib extension Key support levels: 930 = horizontal & 200 DMA 913 = Friday’s S1 907 = Friday’s S2 899 = Thursday’s S1 875 = horizontal On Monday CSCO and TRV were added to the DJIA and GM (GMGMQ) and C were removed. CSCO was unchanged while TRV rose 47 cents or +1.08%. We alerted you on Friday that continuing consolidation was probable and that is what the market delivered on Monday. An early morning sell off and a late afternoon rally formed a doji with near unchanged numbers for the SPX and DJIA. Key Nasdaq stocks GOOG, ISRG, AAPL, AMZN and RIMM moved lower on Monday. BIDU was near unchanged while FSLR, SHLD, APOL and ESRX moved higher. Gold dropped another $10 and gold stocks GDX, GLD and NEM moved lower while AEM, GOLD and GG moved higher. Oil prices fell 35 cents while many oil stocks were near unchanged. Index Commentary The DJIA formed a doji and barely a new high close… three month chart target 10,340…volume was a below average 189 million shares …closed above its 20, 30, 50 and 200 DMA. The SPX formed a doji …3 month chart target of 1,075…closed above its 20, 30, 50 and 200 DMA. The Nasdaq formed a white spinning top…3 month chart target of 2,065…closed above its 20, 30 50 and 200 DMA. The RUT formed a black spinning top….3 month chart target 606…closed above its 20, 30, 50 and 200 DMA. At the Open on Monday SPY – spinning top KOL – hammer USD – white spinning top FAS – white spinning top JOYG – doji BIDU – white hanging man ADBE – black spinning top X – doji ISRG – black spinning top above 200 DMA FWLT – black spinning top SHLD – white spinning top UNG – doji NTAP – white spinning top ORLY – white spinning top OSG – hammer ZION – doji CTV – hammer AAPL – doji RIMM – white spinning top at horizontal resistance VPRT – white spinning top Stocks to Watch on Tuesday Leading Stocks Holding Above 30 DMA BIDU, CLB, ICE, VPRT, CTSH, BAP, CAM, GMCR, ATW, GR, EBAY, TRLG, HDB, PCP, RIMM, WCG, UYG, HLF, AMX, K, PCLN, VAR, PCR, PPD, SWN, FLS, TDG, NIHD, RCI, JOYG, MUR, PSYS, CHL, MOS, DV, AXYS, BIIB, BYI, CPLA, SPWRA, SYNA, X, MCD, BDX, CBST, AAPL, DLTR, ESRX, GES, GXDX, ORCL, RBN, USD, WRC, DECK, FAS, WMT, CPLA, JEC, MYGN, PWR, URE, AMZN, DV, EZPW, JCOM, JOSB, SNA, SNHY, STRA, BLUD, GILD, SLGN, JW.A Moving Above 30 DMA = 1 FSLR Moving Below 30 DMA = 4 AFAM, MHS, NTLS, ACN Staying Below 30 DMA APEI, WAB, DLB, ESI, HANS, URE, MON, AMED, PETS, PWR, ALGT, NFLX, GME, GPRO, BKC Intermediate Term Market Trend: Neutral Short Term Market Trend: Neutral

Futures Pointing to a Lower Open...

1:20 pm ET - The ES stalled out at 933.50 made a second attempt around 11:20 am and then fell to support and even made a slightly lower low at 925.50 around 12:15 pm where it found support and is now in another support bounce move up currently at 929.75... 10:51 am ET - If the ES support bounce continues...look for short term resitance at 935...at 9:33, three minutes after the open this morning, the ES hit 935.25 and then sold off, so this is a key short term resistance area...a successful breakout would produce a chart target of 943... 10:40 am ET - The market has been open just over an hour and the ES is putting on a move to the upside...929 area faded just a bit to 927 and now the ES is pushing 933 so the general 929 area was good and if you were looking for a support bounce trade you may have found it during the last 25 minutes...many individual stocks like BIDU, JOYG, RIMM, ADBE, CTV, MCD and others also seem to have found at least temporary support this morning... 9:52 am ET - ES futures trading like they have found a short term support in the area of 929 - 930...we'll watch closely... BMO - ES -7 and NQ -12 futures are lower in pre-market trading pointing to a lower open. Key support area on ES is the 923 to 930 area. This area had been previous resistance that was broken to the upside last Monday. When the cash markets open the market can bounce up or down from this old resistance now new support area. Watch the open and trade the charts this morning. Look at these charts... (click image to enlarge) Many of the stocks in our At the Open list are down in pre-market trading and are also in up trends which means they will present counter trend moves or support bounce opportunities...It should be a fun morning...

At the Open on Monday SPY – black spinning top +0.02% KOL – black candle +0.99% USD – bearish engulfing -2.94% FAS – black spinning top -2.19% JOYG – breakout continuation three white soldiers +5.92% BIDU – white candle +3.64% ADBE – white spinning top new high close +1.83% X – spinning top +1.77% ISRG – white spinning top above 200 DMA +0.33% FWLT – black spinning top +0.29% SHLD – hanging man +0.20% UNG – white spinning top confirms hammer +0.06% NTAP – hammer -0.21% ORLY – black spinning top -0.63% OSG – black spinning top -0.69% ZION – black spinning top -1.16% CTV – black spinning top -1.48% AAPL – black spinning top RIMM – doji at horizontal resistance VPRT – black spinning top

Spinning Top Friday...

DJIA + 12.89, +0.15% SP500 - 2.37, -0.25% NASDAQ Comp. - 0.60, -0.03% Russell 2000 - 1.32, -0.25% Exchange NYSE NASD Advancing 1,405 1,249 Declining 1,531 1,470 Oil $68.44 -$0.37 Gold $961.70 -$19.50 SOX 270.74 -5.25 VIX 29.62 -0.56 The VIX moved down and did NOT confirm the move down in the SPX on Friday. Strongest Sectors: XLK +0.99%...XLI +0.85%...XLV +0.19% Weakest Sectors: XLB -1.43%...XLF -0.88%...XLE -0.82% Only four of nine sectors moved higher on Friday. Technology, Industrials, Healthcare and Utilities were stronger than the SPX -0.25%. Financial stocks stronger than XLF -0.88%: AOC, MMC, TRV, BAC, GS, CME, MS and CB. Leading tech stocks stronger than XLK +0.99% include: HPQ, ADBE, MSFT, ADP and CSCO. Sector Watch Up Trending: Horizontal Breakout: XLB, XLK, XLY, XLE Sideways: XLV, XLF, XLP, XLI, XLU Down Trending: SPX Key resistance levels: 944 = January horizontal 962 = 161.8% Fib extension Key support levels: 930 = horizontal & 200 DMA 913 = Friday’s S1 907 = Friday’s S2 899 = Thursday’s S1 875 = horizontal The SPX trend is up for the past 13 weeks. The month of May was a period of sideways consolidation for four weeks during which a horizontal resistance area of 925 to 930 had been formed. In January a horizontal resistance high of 944 was established. On Monday, the 930 resistance area was broken and the SPX rose to 948 before closing at 943. On Tuesday the index touched 949 and then fell to a low of 923 on Wednesday before closing at 932 or the prior horizontal resistance area. Thursday formed a higher low of 929 and moved higher. On Friday the ES (S&P) futures broke through the 945 resistance touching 957.50 in pre-market trading on the jobless claims report and sold off after the cash SPX opened. The SPX high on Friday was 951.69 and closed -2.37 at 940.09. Friday was a high day and gives short term traders a Yellow Alert for Monday. Just keep in mind that other than Monday this week was more consolidation than up trending. For the week the SPX was up 21 points and traded its smallest weekly trading range at 28.53 points. Going into next week look for consolidation to continue between the 925 - 945 range until either resistance or support is broken. Because consolidation patterns are trend continuation patterns, when a break out occurs the chart suggests it will be to the up side in the direction of the current up trend. Maintain mental flexibility if a lower probability downside break out occurs. Key Nasdaq stocks BIDU, AMZN, ADBE, MSFT, ADP CSCO, GOOG, RIMM, AAPL, SYMC, ORCL and QCOM moved higher. Gold dropped over $19 and oil prices fell 37 cents leading gold and oil stocks lower on Friday. (click image to enlarge) Index Commentary The DJIA formed a spinning top and a new high close…closed above 200 DMA for the second time in as many days…three month chart target 10,340…volume was a below average 255 million shares …closed above its 20, 30, 50 and 200 DMA. The SPX formed a spinning top …3 month chart target of 1,075…closed above its 20, 30, 50 and 200 DMA. The Nasdaq formed a spinning top…3 month chart target of 2,065…closed above its 20, 30 50 and 200 DMA. The RUT formed a spinning top….3 month chart target 606…closed above its 20, 30, 50 and 200 DMA. At the Open on Friday SPY – black spinning top +0.02% KOL – black candle +0.99% USD – bearish engulfing -2.94% FAS – black spinning top -2.19% JOYG – breakout continuation three white soldiers +5.92% BIDU – white candle +3.64% ADBE – white spinning top new high close +1.83% X – spinning top +1.77% ISRG – white spinning top above 200 DMA +0.33% FWLT – black spinning top +0.29% SHLD – hanging man +0.20% UNG – white spinning top confirms hammer +0.06% NTAP – hammer -0.21% ORLY – black spinning top -0.63% OSG – black spinning top -0.69% ZION – black spinning top -1.16% CTV – black spinning top -1.48% Stocks to Watch on Monday Leading Stocks Holding Above 30 DMA BIDU, CLB, ICE, VPRT, CTSH, BAP, CAM, GMCR, ATW, GR, EBAY, TRLG, HDB, PCP, RIMM, WCG, UYG, HLF, AMX, K, PCLN, VAR, PCR, PPD, SWN, FLS, TDG, NIHD, RCI, ACN, JOYG, MUR, PSYS, CHL, MOS, DV, AXYS, BIIB, BYI, CPLA, SPWRA, SYNA, X, MCD, BDX, CBST, AAPL, AFAM, DLTR, ESRX, GES, GXDX, ORCL, RBN, USD, WRC, DECK, FAS, WMT, CPLA, JEC, MYGN, PWR, URE, AMZN, DV, EZPW, JCOM, JOSB, NTLS, SNA, SNHY, STRA, BLUD, GILD, SLGN Moving Above 30 DMA = 2 JW.A, MHS Moving Below 30 DMA = 1 FSLR Staying Below 30 DMA APEI, WAB, DLB, ESI, HANS, URE, MON, AMED, PETS, PWR, ALGT, NFLX, GME, GPRO, BKC Intermediate Term Market Trend: Neutral Short Term Market Trend: Neutral

Futures Jump in Pre-Market as Jobless Claims Fall...

11:19 am ET - I regularly mention how economic reports almost never alter the market trend but that they can accelerate a trend or increase volatility for a day or two. That certainly has been the case this morning as the Jobless Claims and Unemployment report gave a pre-market bump (accelerated the trend) to the futures and then in a classic gap situation sold off a the open (increased volatility) for the first 45 minutes. This type of price action can create opportunity for the saavy trader and be fraught with peril for the non-logical trader. The saavy trader who is long generally rides through the volatiliy realizing before hand it is almost always temporary and that the trend generally resumes. The saavy trader who is looking to enter can use the pull back to enter positions at more favorable price levels. The non-logical trader often loses sight of the trend and over reacts to the temporary increase in volatility and sells positions in an untimely manner. A quick review of the Model Portfolio this morning shows the following stocks with some interesting chart action: BIDU, FLS, GES, GMCR, GR, JOYG, KOL, NIHD, PCP, RIMM, SPWRA, TDG and WRC. 10:43 am ET - The SPX pulled back to 934 before bouncing this morning...this is a higher low on the daily chart from Thursday's low of 929... 9:49 am ET - ES gap has closed with pull back to 940... 9:37 am ET - ES is pulling back from pre-market high...we are looking for a support entry this morning... BMO - ES +14 and NQ +15 are higher in pre-market trading pointing to a higher open after Jobless Claims fell to 345,000 the lowest number since September last year. This is a brekaout above the 944 horizontal resistance area and if it holds look for the SPX along with other indices to begin a move to their next resistance level. For the SPX that is the 1,007 area. (That is not a forecast for today, it is the next horizontal resistance on the chart from November.) XLI Industirals, XLF Financials and XLB Materials sectors are leading in pre-market. Look at these charts... (click image to enlarge) At the Open on Friday SPY – break high of low day KOL – break high of low day USD – break high of low day FAS – break high of low day CTV – bullish harami JOYG – breakout X – bullish harami ADBE – bullish engulfing OSG – bullish harami ZION – white spinning top UNG – hammer NTAP – bullish harami FWLT – white candle support bounce SHLD – breakout ISRG – spinning top above 200 DMA ORLY – black spinning top BIDU – white spinning top

Support Bounce Rises to Resistance...

DJIA + 74.96, +0.86% SP500 + 10.75, +1.15% NASDAQ Comp. + 24.10, +1.32% Russell 2000 + 8.97, +1.72% Exchange NYSE NASD Advancing 2,332 1,951 Declining 629 771 Oil $68.81 +$2.69 Gold $981.20 +$16.70 SOX 275.99 +5.81 VIX 30.18 -0.84 The VIX moved down and did confirm the move up in the SPX on Thursday. Strongest Sectors: XLF +3.58%...XLB +2.31%...XLE +2.26% Weakest Sectors: XLV -1.38%...XLP +0.17%...XLY +0.21% Eight of nine sectors moved higher on Thursday. Financials, Materials, Energy, Industrials and Technology were stronger than the SPX +1.15%. Financial stocks stronger than XLF +3.58%: KEY, PNC, STT, ICE, MET, BAC, C, GS, MS, ZION, JPM, WFC, USB, PRU, BK and ETFs UYG and FAS. Leading tech stocks stronger than XLK +1.40% include: DELL, QCOM, EMC, GLW, YHOO, GOOG, AAPL, CSCO and AMAT. Sector Watch Up Trending: Horizontal Breakout: XLB, XLK, XLY, XLE Sideways: XLV, XLF, XLP, XLI, XLU Down Trending: SPX Key resistance levels: 944 = January horizontal 962 = 161.8% Fib extension Key support levels: 930 = horizontal & 200 DMA 913 = Friday’s S1 907 = Friday’s S2 899 = Thursday’s S1 875 = horizontal Wednesday’s support 930 support area held and the SPX, DJIA, Nasdaq and RUT all moved higher on Thursday regaining Wednesday’s pull back while the Nasdaq and RUT each formed a new high close YTD. The SPX which bounced off its 200 DMA Wednesday rose horizontal resistance at the 942 area. All four indices closed near their high of the day. Oil and gold prices rose leading energy, solar, coal, Ag-related, steel and gold stocks higher. Key Nasdaq stocks FSLR, BIDU, GOOG, AAPL, RIMM, SHLD and MICC moved higher. Biotech stocks CELG, GENZ, AMGN and BIIB moved lower while CEPH and GILD moved higher. Index Commentary The DJIA formed a white candle reversing Wednesday’s pull back…new high close…closed above 200 DMA for the first time in over a year…three month chart target 10,340…volume was a below average 237 million shares …closed above its 20, 30, 50 and 200 DMA. The SPX formed a white candle …3 month chart target of 1,075…closed above its 20, 30, 50 and 200 DMA. The Nasdaq formed a white candle new high close…3 month chart target of 2,065…closed above its 20, 30 50 and 200 DMA. The RUT formed a white candle and new high close….3 month chart target 606…closed above its 20, 30, 50 and 200 DMA. At the Open on Thursday SPY – break high of low day KOL – break high of low day USD – break high of low day FAS – break high of low day CTV – bullish harami JOYG – breakout X – bullish harami ADBE – bullish engulfing OSG – bullish harami ZION – white spinning top UNG – hammer NTAP – bullish harami FWLT – white candle support bounce SHLD – breakout ISRG – spinning top above 200 DMA ORLY – black spinning top CELG - black spinning top GENZ – black spinning top GILD – shooting star BIDU – white spinning top Stocks to Watch on Friday Leading Stocks Holding Above 30 DMA BIDU, CLB, ICE, VPRT, CTSH, BAP, CAM, GMCR, ATW, GR, EBAY, TRLG, HDB, PCP, RIMM, WCG, UYG, HLF, AMX, K, PCLN, VAR, PCR, PPD, SWN, FLS, TDG, NIHD, RCI, ACN, JOYG, MUR, PSYS, CHL, MOS, DV, AXYS, BIIB, BYI, CPLA, SPWRA, SYNA, X, MCD, BDX, CBST, AAPL, AFAM, DLTR, ESRX, GES, GXDX, ORCL, RBN, USD, WRC, DECK, FAS, WMT, CPLA, JEC, MYGN, PWR, URE, AMZN, DV, EZPW, JCOM, JOSB, NTLS, SNA, SNHY, STRA, BLUD, GILD Moving Above 30 DMA = 2 FSLR, SLGN Moving Below 30 DMA = 3 APEI, JW.A, MHS Staying Below 30 DMA WAB, DLB, ESI, HANS, URE, MON, AMED, PETS, PWR, ALGT, NFLX, GME, GPRO, BKC Intermediate Term Market Trend: Neutral Short Term Market Trend: Neutral

Futures Pointing to a Flat to Lower Open...

BMO - ES +1.00 and NQ - 1.25 are flat to lower in pre-market trading pointing to a flat to lower open. Watch the 200 DMA support levels and yesterday's lows in the 923 area as a key to whether prices are likely to hold or go lower. If prices open flat and move higher that could indicate that Wednesday's late day support bounce is going to continue. Look at these charts... (click image to enlarge) At the Open on Thursday SPY – break low of high day KOL – break low of high day USD – break low of high day confirm bearish harami FAS – break low of high day CTV – break low of high day JOYG – white spinning top X – break low of high day ADBE – doji break low of high day OSG – fell to 30 DMA ZION – break spinning top UNG – break low of high day NTAP – fell to 30 DMA FWLT – break low of high day SHLD – bearish harami, above S1 ISRG – bearish harami above S1 ORLY – large white candle CELG - large white candle breakout continuation GENZ – white candle horizontal breakout GILD – large white candle support bounce BIDU - white candle new high close

Stocks Break Below Low of High Day....Gold, Oil Fall...

DJIA - 65.63, -0.75% SP500 - 12.98, -1.37% NASDAQ Comp. - 10.88, -0.59% Russell 2000 - 3.92, -0.74% Exchange NYSE NASD Advancing 807 1,058 Declining 2,143 1,633 Oil $66.12 -$2.43 Gold $964.50 -$18.70 SOX 270.18 -6.11 VIX 31.02 +1.39 The VIX moved up and did confirm the move down in the SPX on Wednesday. Strongest Sectors: XLV -0.23%...XLP -0.50%...XLK -1.10% Weakest Sectors: XLE -3.85%...XLB -3.43%...XLI -1.95% All nine sectors moved lower on Wednesday. Healthcare, Consumer Staples, Technology, Consumer Discretionary and Financials were stronger than the SPX -1.37%. Financial stocks stronger than XLF -1.32%: TROW, IVZ, RF, BK, MMC, AOC, SCHW, USB, SPG, TRV, CB, GS, NTRS, ASP, WFC and MS. Leading tech stocks stronger than XLK -1.10% include: MSFT, AAPL, GOOG, VZ, EBAY, ORCL, TXN, IBM, MA, HPQ and QCOM. Sector Watch Up Trending: Horizontal Breakout: XLB, XLK, XLY, XLE Sideways: XLV, XLF, XLP, XLI, XLU Down Trending: SPX Key resistance levels: 944 = January horizontal 962 = 161.8% Fib extension Key support levels: 930 = horizontal & 200 DMA 913 = Friday’s S1 907 = Friday’s S2 899 = Thursday’s S1 875 = horizontal Our Yellow Alert on Tuesday turned to red on Wednesday as the SPX, DJIA and many individual stocks broke and closed below the low of the high day. This is a potential sell signal for short term traders. The SPX which broke the 925 – 930 horizontal resistance on Monday and rose to its 944 horizontal resistance from January fell back to 924 before rising into the close at 932. The Nasdaq and RUT rallied from their lows to close near their open and above the low of the high day, both forming a bearish harami. Old resistance potentially becomes new support and that was certainly the case at least for Wednesday. If the 925 – 930 area holds look for a bull flag type of support bounce as this would represent a higher low in the up trend of the past 12 weeks. If the 925 – 930 support does not hold look for a move down to the 913 area. Oil and gold prices also fell leading energy, solar, coal, Ag-related, steel and gold stocks lower. BIDU, GOOG, AAPL and AMZN along with biotech stocks like, CELG, GENZ, AMGN, CEPH, GILD and BIIB moved higher. Index Commentary The DJIA formed a black candle with lower shadow that bounced at Monday’s S1…three month chart target 10,340…volume was a below average 252 million shares …closed above its 20, 30 and 50 DMA. The SPX formed a black candle that close at Monday’s S1 and 930 horizontal resistance area…3 month chart target of 1,075…closed above its 20, 30, 50 and 200 DMA. The Nasdaq formed a doji bearish harami…3 month chart target of 2,065…closed above its 20, 30 50 and 200 DMA. The RUT formed a hanging man bearish harami….3 month chart target 606…closed above its 20, 30, 50 and 200 DMA. At the Open on Wednesday SPY – break low of high day KOL – break low of high day USD – break low of high day confirm bearish harami FAS – break low of high day CTV – break low of high day JOYG – white spinning top X – break low of high day ADBE – doji break low of high day OSG – fell to 30 DMA ZION – break spinning top UNG – break low of high day NTAP – fell to 30 DMA FWLT – break low of high day XRT – bearish harami SHLD – bearish harami, above S1 ISRG – bearish harami above S1 ORLY – large white candle CELG - large white candle breakout continuation Stocks to Watch on Thursday Leading Stocks Holding Above 30 DMA BIDU, CLB, ICE, VPRT, CTSH, BAP, CAM, GMCR, ATW, GR, EBAY, TRLG, HDB, PCP, RIMM, WCG, UYG, HLF, AMX, MHS, K, PCLN, VAR, PCR, PPD, SWN, FLS, TDG, NIHD, RCI, ACN, JOYG, MUR, PSYS, CHL, MOS, DV, AXYS, BIIB, BYI, CPLA, SPWRA, SYNA, X, MCD, BDX, CBST, AAPL, AFAM, DLTR, ESRX, GES, GXDX, ORCL, RBN, USD, WRC, DECK, FAS, WMT, CPLA, JEC, MYGN, PWR, URE, AMZN, DV, EZPW, JCOM, JOSB, JW.A, NTLS, SNA, SNHY, STRA, BLUD Moving Above 30 DMA = 2 APEI, GILD Moving Below 30 DMA = 2 FSLR, WAB Staying Below 30 DMA DLB, ESI, HANS, URE, MON, AMED, PETS, PWR, ALGT, NFLX, GME, GPRO, SLGN, BKC Intermediate Term Market Trend: Neutral Short Term Market Trend: Neutral

Futures Pointing to a Lower Open...

BMO - ES -4 and NQ - 4 are slightly lower in pre-market trading pointing to a flat to slighty lower open. Tuesday was a narrow range high day with slowing upward momentum on the SPX, essentially a pause day. While the SPX can go higher, the pattern of the last twelve weeks would suggest the potential for the SPX to roll over after a low range high day. Watch closely this morning to see if the SPX breaks the low of the high day. Today is a Yellow Alert day for short term traders because of this potential... Look at these charts... (click image to enlarge)

Also look at the charts from Tuesday evening's post...

At the Open on Wednesday SPY – white spinning top KOL – black spinning top USD – bearish harami FAS – black spinning top CTV – black spinning top JOYG – black spinning top X – black spinning top ADBE – white spinning top new high close OSG – broke low of the high day ZION – white spinning top UNG – doji NTAP – broke low of high day FWLT – white spinning top XRT – white candle at horizontal resistance, new high close SHLD - large white candle horizontal breakout ISRG - large white candle 200 DMA breakout ORLY - large white candle horizontal brekaout CELG - large white candle at short term horizontal resistance

Spinning Top Tuesday...Short Term Yellow Alert...

DJIA + 19.43, +0.22% SP500 + 1.87, +0.20% NASDAQ Comp. + 8.12, +0.44% Russell 2000 + 5.30, +1.02% Exchange NYSE NASD Advancing 1,787 1,537 Declining 1,233 1,173 Oil $68.55 -$0.03 Gold $983.20 +$4.60 SOX 276.29 -9.42 VIX 29.63 -0.41 The VIX moved down and did confirm the move up in the SPX on Tuesday. Strongest Sectors: XLP +1.40%...XLP +1.02%...XLY +0.83% Weakest Sectors: XLF -1.62%...XLU -1.19%...XLE -0.27% Five of nine sectors moved higher on Tuesday. Consumer Staples, Materials, Consumer Discretionary and Healthcare were stronger than the SPX +0.20%. Financial stocks stronger than XLF -1.62%: PRU, IVZ, ICE, ZION, GTRV, CB, MMC, BAC, CME, KEY, MET, BK, TROW, STT, ALL, MS, AF., AOC, FR, SCHW, GS, and NTRS. Leading tech stocks stronger than XLK -0.22% include: EMC, ORCL, SYMC, BZ, T, ADBE, CSCO, GOOG, YHOO, AAPL and MSFT. Sector Watch Up Trending: Horizontal Breakout: XLB, XLK, XLY, XLE Sideways: XLV, XLF, XLP, XLI, XLU Down Trending: SPX Key resistance levels: 944 = January horizontal 962 = 161.8% Fib extension Key support levels: 930 = horizontal & 200 DMA 913 = Friday’s S1 907 = Friday’s S2 899 = Thursday’s S1 875 = horizontal The SPX fluctuated in a narrow trading range of 11 points on Tuesday closing about one point above the January high. Tuesday once again is a high day with loss of upward momentum setting up a Yellow Alert for short term traders. Watch for a potential break of the low of the high day. Intermediate term traders stay with the current up trend just as you have during the past 12 weeks. DJIA volume was significantly lower than the past three trading days which may further indicate that buying volume has temporarily peaked and might be a clue for a potential short term pull back. The weakness in the SOX while Nasdaq was higher could be another clue signaling a short term pull back. Charts of Interest... (click image to enlarge) Index Commentary – Yellow Alert The DJIA formed a small white spinning top and closed just below its 200 DMA…three month chart target 10,340…volume was 257 million shares …closed above its 20, 30 and 50 DMA. The SPX formed a small white spinning top after a three white soldiers candle pattern …3 month chart target of 1,075…closed above its 20, 30, 50 and 200 DMA. The Nasdaq a spinning top with a new high close…its highest close since October 13, 2008… 3 month chart target of 2,065…closed above its 20, 30 50 and 200 DMA. The RUT formed a white spinning top….3 month chart target 606…closed above its 20, 30, 50 and 200 DMA. At the Open on Tuesday SPY – white spinning top KOL – black spinning top USD – bearish harami FAS – black spinning top CTV – black spinning top JOYG – black spinning top X – black spinning top STLD – black spinning top ADBE – white spinning top new high close EL – white spinning top WAB – white candle hit 200 DMA resistance OSG – broke low of the high day ZION – white spinning top UNG – doji NTAP – broke low of high day FWLT – white spinning top XME – white spinning top XRT – white candle at horizontal resistance, new high close Stocks to Watch on Wednesday Leading Stocks Holding Above 30 DMA BIDU, CLB, ICE, VPRT, CTSH, BAP, CAM, GMCR, ATW, GR, EBAY, TRLG, FSLR, HDB, PCP, RIMM, WCG, UYG, HLF, AMX, MHS, K, PCLN, VAR, PCR, PPD, SWN, FLS, TDG, NIHD, RCI, ACN, JOYG, MUR, PSYS, CHL, MOS, DV, AXYS, BIIB, BYI, CPLA, SPWRA, SYNA, X, MCD, BDX, CBST, AAPL, AFAM, DLTR, ESRX, GES, GXDX, ORCL, RBN, USD, WRC, DECK, FAS, WMT, CPLA, JEC, MYGN, PWR, URE, AMZN, DV, EZPW, JCOM, JOSB, JW.A, NTLS, SNA, SNHY, STRA, WAB Moving Above 30 DMA = 1 BLUD Moving Below 30 DMA = 1 DLB Staying Below 30 DMA APEI, ESI, HANS, URE, MON, AMED, PETS, PWR, ALGT, NFLX, GME, GILD, GPRO, SLGN, BKC Intermediate Term Market Trend: Neutral Short Term Market Trend: Up

Futures Pointing to a Flat Opening...

BMO - ES -0.25 and NQ - 1 are down slighty in pre-market trading point to a flat to slightly lower open. Since Monday was a large white candle the mid-section is S1, 932 on the SPX, which is a key short term support along with the 200 DMA, 927 on the SPX. A pull back after three strong up days, three white soldiers candle pattern, would be likely. A pull back that stays above 927 to 932 would be an indication of few profit takers and buying continuation. A pull back to a higher low would be an new entry opportunity... Take a look at these charts... (click image to enlarge) At the Open on Tuesday SPY – white candle new high close KOL – white spinning top USD – large white candle break horizontal resistance FAS – white spinning top CTV – white spinning top JOYG – white spinning top close X – white candle new high close STLD – white spinning top ADBE – large white candle new high close EL – large white candle support bounce WAB – white spinning top OSG – white spinning top ZION hammer UNG – large white candle NTAP – large white candle breakout T1 FWLT – white candle new high close XME – white candle break out of horizontal resistance XRT – white candle at horizontal resistance

SPX Breaks Through Horizontal Resistance...

DJIA + 221.11, +2.60% SP500 + 23.73, +2.58% NASDAQ Comp. + 54.35, +3.06% Russell 2000 + 19.75, +3.94% Exchange NYSE NASD Advancing 2,444 2,093 Declining 549 681 Oil $68.58 +$2.27 Gold $978.60 -$0.20 SOX 280.37 +14.40 VIX 30.04 +1.12 The VIX moved up and did NOT confirm the move up in the SPX on Monday. Strongest Sectors: XLY +4.80%...XLI +4.62%...XLE +3.68% Weakest Sectors: XLV +0.66%...XLF +1.06%...XLP +1.99% All nine sectors moved higher on Monday. Consumer Discretionary, Industrials, Energy, Utilities, Materials and Technology were stronger than the SPX +2.58%. Financial stocks stronger than XLF +1.06%: SPG, AXP, SCHW, IVZ, ZION, TRV, CME, AFL ICE, TROW, ALL, CB and ETFs UYG and FAS. Leading tech stocks stronger than XLK +2.83% include: AMAT, GLW, EMC, CSCO, DELL, INTC, TXN, HPQ, YHOO, ADBE and EBAY. . Sector Watch Up Trending: Horizontal Breakout: XLB, XLK, XLY, XLE Sideways: XLV, XLF, XLP, XLI, XLU Down Trending: SPX Key resistance levels: 930 = horizontal & 200 DMA 944 = January horizontal 962 = 161.8% Fib extension Key support levels: 913 = Friday’s S1 907 = Friday’s S2 899 = Thursday’s S1 875 = horizontal The SPX broke through its horizontal resistance area and 200 DMA in convincing fashion today rising to the January resistance area of 944. If this is a good breakout, the 925 – 930 resistance should now become new support. Well it is finally happening; GM and C are being removed from the DJIA and being replaced by CSCO and TRV. CSCO in the third Nasdaq stock to join the DJIA following MSFT and INTC several years ago. Index Commentary The DJIA formed a large white candle that broke horizontal resistance and closed just below its 200 DMA…three month chart target 10,340…volume was 354 million shares …closed above its 20, 30 and 50 DMA. The SPX formed a large white candle that closed above its 930 horizontal resistance, 200 DMA and rose to its 944 January horizontal resistance…3 month chart target of 1,075…closed above its 20, 30, 50 and 200 DMA. The Nasdaq had a new high close of 1,828.68 its highest close since October 13, 2008… 3 month chart target of 2,065…closed above its 20, 30 50 and 200 DMA. The RUT formed a large white candle that closed above horizontal resistance and its 200 DMA….3 month chart target 606…closed above its 20, 30, 50 and 200 DMA. At the Open on Monday SPY – white candle new high close KOL – white spinning top FAS – white spinning top CTV – white spinning top JOYG – white spinning top close STT – black spinning top X – white candle new high close ADBE – large white candle new high close EL – large white candle support bounce WAB – white spinning top OSG – white spinning top USD – large white candle break horizontal resistance STLD – white spinning top ZION - hammer OSG – large white candle FSLR – black candle at 20 DMA NTAP – large white candle breakout T1 MON – large black candle FWLT – white candle new high close Stocks to Watch on Tuesday Leading Stocks Holding Above 30 DMA BIDU, CLB, ICE, VPRT, CTSH, BAP, CAM, GMCR, ATW, GR, EBAY, TRLG, FSLR, HDB, PCP, RIMM, WCG, UYG, HLF, AMX, MHS, K, PCLN, VAR, PCR, PPD, SWN, FLS, TDG, NIHD, RCI, ACN, JOYG, MUR, PSYS, CHL, MOS, DV, AXYS, BIIB, BYI, CPLA, SPWRA, SYNA, X, MCD, BDX, CBST, AAPL, AFAM, DLTR, ESRX, GES, GXDX, ORCL, RBN, USD, WRC, DECK, FAS, WMT, CPLA, JEC, MYGN, PWR, URE Moving Above 30 DMA = 12 AMZN, DLB, DV, EZPW, JCOM, JOSB, JW.A, NTLS, SNA, SNHY, STRA, WAB Moving Below 30 DMA = 0 Staying Below 30 DMA APEI, ESI, HANS, URE, MON, AMED, PETS, PWR, ALGT, NFLX, GME, GILD, GPRO, SLGN, BKC, BLUD Intermediate Term Market Trend: Neutral Short Term Market Trend: Up

Futures Pointing to a Higher Open...

1:45 pm ET - The SPX rose to the 944 resistance area, which is the January resistance high, during the first two and half hours of trading...it rose to the 942.50 within the first hour of trading...since that time the SPX has been consolidating between 945.50 and 942.50, a 3 point trading range...these are the very short term support and resistance level...we've noted 944 as resistance since January on our charts but commented on it in Friday's Weekly Wrap and in Friday's post... 10:39 am ET - markets are pausing after their first hour run...TRLG from our At the Open list last week is up 6% in the first hour the chart target is 27...X is up 8% the chart target is 39...so a great first hour of trading...intermediate term traders who had the focus to stay with their trades through the consolidation of the past four weeks should be loving gains this morning and short term traders who re-entered last weeks should be feeling just as good... 10:17 am ET - at 7:39:21 MT we bought 4 ESM9 contracts at 930.50...at 8:18:08 MT we sold 4 ESM9 contracts for 940.50 for a gain of 10 points or $2,000.00...after entry and exit commissions of $28 this is a net gain of $1,972.00 in 39 minutes...(this trade was NOT in the Model Porftolio account and will NOT show up in the track record...it was done in the other virtual account that is used for trading rooms)...if you have an interest in intraday futures trading see Futures Trading in the left hand menu under Key Topics 9:56 am ET - after a small pull back in the first 10 minutes of trading the ES, SPX and NQ have moved to new daily highs...most stocks are doing very well in early trading... BMO - ES +14 and NQ +15 futures are higher in pre-market trading pointing to a higher open. ES, NQ and SPY pre-market prices are trading above recent horizontal resistance and their respective 200 DMA. If these price levels hold they are a horizontal breakout and look for higher levels this week on a breakout continuation. Look at these charts... (click image to enlarge) At the Open on Monday SPY – white spinning top at 200 DMA confirmed Thursday’s hammer +1.77% KOL – doji +2.81% FAS – white candle confirms hammer +5.60% CTV – white candle +5.34% JOYG – white spinning top close above horizontal resistance +4.17% STT – white candle breakout of horizontal resistance +3.94% X – white candle breakout of horizontal resistance, new high close +3.90% ADBE – white candle confirms hammer new high close +2.32% EL – white candle confirms hammer +2.00% WAB – white candle just below 30 DMA +1.94% OSG – black hanging man +1.81% USD – hanging man +0.96% STLD – hanging man at horizontal resistance +0.74% ZION – doji -0.44% UNG – black candle after support bounce FSLR – white spinning top 20 DMA breakout NTAP – bull flag break high of low day MON – support bounce break high of low day FWLT – doji 200 DMA breakout