Bullish Harami Thursday...

DJIA + 46.43, +0.56% SP500 + 9.15, +1.04% NASDAQ Comp. + 25.02, +1.50% Russell 2000 + 8.89, +1.88% Exchange NYSE NASD Advancing 2,653 1,857 Declining 1,048 866 Oil $58.62 +$0.60 Gold $928.00 +$2.50 SOX 244.38 +7.58 VIX 31.37 +2.28 The VIX moved down and did confirm the move up in the SPX on Thursday. This is the lowest close since September 16, 2008. Strongest Sectors: XLF +3.34%...XLK +1.08%...XLB +0.86% Weakest Sectors: XLU -0.08%...XLV +0.12%...XLY +0.13% Eight of nine Sectors moved higher on Thursday. Financials and Technology rose more than the SPX +1.05%. Financial stocks again was the strongest sector rising +3.34%. Financial stocks stronger than XLF: AFL, STT, PRU, WFC, RF, MET, MS NTRS, KEY, JPM ICE, ALL, C, SPG, CME, IVZ, GS and ETF’s UYG and FAS. Leading tech stocks stronger than XLK, +1.08% include: GLW, EBAY, ADBE, AMT, AAPL, TXN, INTC, ORCL, HPQ, YHOO, MSFT, QCOM and MA. Sector Watch Up Trending: Horizontal Breakout: XLB, XLK Sideways: XLY, XLE, XLV, XLF, XLP, XLI Down Trending: XLU SPX Key resistance levels: 944 = horizontal 954 = 200 DMA 957 = short term chart target Key support levels: 904 = weekly S1 891 = 38.2% Fib level 875 = horizontal The SPX found support at the 882 level and rose 9 points on Thursday after falling 48 points through Wednesday from Friday’s high. High priced financials CME, GS and ICE led financial stocks higher. Friday is May options expiration which can sometimes be more volatile as option positions get resolved and closed. Look for a break of the high of the low day as many stocks are set up for a support bounce follow through. Watch key support levels on Friday if the support bounce does not follow through to the up side. Index Commentary The DJIA…bullish harami…stayed below horizontal resistance at 8,405…three month chart target 10,340…volume slightly below average at 323 million shares…closed above its 20, 30 and 50 DMA. The SPX formed a bullish harami…3 month chart target of 1,075…closed above its 20, 30 and 50 DMA. The Nasdaq formed a bullish harami bounced off its 30 DMA and horizontal support level of 1,665…it is below its 20 and 200 DMA…3 month chart target of 2,065…closed above its 30 and 50 DMA. The RUT formed a bullish harami that closed below its 20 DMA…3 month chart target 606…closed above its 30 and 50 DMA At the Open on Friday SPY –bullish harami KOL – white spinning top FAS – piercing line STT – bullish engulfing ZION – bullish harami in bull flag EBAY – large white candle stays above gap support at 200 DMA ADBE – large white candle bullish harami WYNN - hammer SCHN – white spinning top SNDA – hammer/bullish harami JNPR – white candle in bull flag above gap support CTV – large white candle closes at high of low day BBT – hammer breaks high of low day OSG – bullish harami in bull flag EL – doji ICE – white spinning top WHR – bullish harami Stocks to Watch on Friday Leading Stocks Holding Above 30 DMA BIDU, CLB, ICE, DLB, VPRT, CTSH, BAP, CAM, GMCR, ATW, GR, SYNA, EBAY, TRLG, FSLR, HDB, PCP, RIMM, WCG, UYG, HLF, AMX, MHS, WAB, FAS, AFAM, K, RBN, ESRX, PCLN, VAR, PCR, PPD, HANS, SWN, FLS, TDG, NIHD, RCI, STRA, ACN, AMED, JOYG, MON, MUR, PSYS, NTLS, CHL, DECK, MOS, DV, PETS, BDX Moving Above 30 DMA = 6 AXYS, BIIB, BYI, ESI, SYNA, X Moving Below 30 DMA = 0 Staying Below 30 DMA AAPL, CBST, CPLA, GES, WRC, SNA, SNHY, SPWRA, WMT, URE, AMZN, EZPW, GXDX, JOSB, JW.A, JEC, MCD, PWR, DLTR, USD, DECK, ORCL, ALGT, JCOM, NFLX, GME, GILD, GPRO, MYGN, SLGN, BKC, APEI, BLUD Intermediate Term Market Trend: Neutral Short Term Market Trend: Neutral

Futures Pointing to a Flat Opening...

BMO - ES -2 and NQ +1 futures are near flat in pre-market trading pointing to a flat opening...we'll be watching for either a continuation of the pull back or the market finding support between yesterday's close and the 875 area on the SPX...trade accordingly based on the Chart Signals and your trading rules. Look at the support levels on these charts.... (click image to enlarge) At the Open on Thursday SPY – large black candle did not confirm hammer FAS – large black candle STT – large black candle did confirm hammer still in bull flag WYNN – large black candle break support of horizontal flag KOL – large black candle did not confirm hammer SCHN – large black candle did not confirm hammer/bullish harami EBAY – large black candle stays above gap support at 200 DMA SNDA – large black candle ZION – black candle in bull flag ADBE – large black candle above bullish engulfing support J NPR – black candle in bull flag above gap support CTV – black candle falls to gap support BBT – gap down white candle OSG – gap down black candle does not confirm hammer in bull flag EL – black spinning top breaks gap support ICE – white candle in bull flag support bounce

Markets Move Lower on Wednesday...

DJIA - 184.22, -2.18% SP500 - 24.43, -2.69% NASDAQ Comp. - 51.32, -3.01% Russell 2000 - 23.36, -4.72% Exchange NYSE NASD Advancing 524 412 Declining 3,255 2,347 Oil $58.02 -$0.83 Gold $925.50 +$2.00 SOX 236.80 -5.73 VIX 33.65 +1.85 The VIX moved up and did confirm the move down in the SPX on Tuesday. Strongest Sectors: XLV -0.23%...XLP -1.83%...XLK -2.52% Weakest Sectors: XLF -5.08%...XLB -4.33%...XLI -4.14% All nine Sectors moved lower on Wednesday. Healthcare, Consumer Staples, Technology and Utilities did not fall as much as the SPX -2.69%. Financial stocks came in as the weakest sector falling -5.08%. Financial stocks stronger than XLF: CME, TRV, ICE, AOC, CB, BK, NTRS, MMC, USB, JPM, ALL STT, GS SCHW, IVZ and MS. Sector Watch Up Trending: Horizontal Breakout: XLB, XLK Sideways: XLY, XLE, XLV, XLF, XLP, XLI Down Trending: XLU SPX Key resistance levels: 944 = horizontal 954 = 200 DMA 957 = short term chart target Key support levels: 904 = weekly S1 891 = 38.2% Fib level 875 = horizontal The SPX fell below the 891 support level to 883, just above its 20 DMA at 879 and its 875 horizontal support level. After a 3 hour rally Tuesday afternoon futures fell in Europe overnight. The SPX opened lower this morning and sold off. We alerted you this morning before the open to “watch for bounce or break and trade accordingly.” If you are a short term trader you should have been able to take advantage of the support break today. As we stated in this morning's post Wednesday's sell off is being attributed to the Retail Sales report for April that came in at -0.4% less than a forecast of +0.1%. Generally economic reports can influence trading for a day or two but seldom alter the intermediate term trend. If the SPX breaks support area of 875, the 61.8% Fib retracement is at 865. The levels below that are 848 and 825. Trade accordingly. (click image to enlarge) Index Commentary The DJIA…large black candle that did confirm Monday’s bearish harami…fell below horizontal resistance at 8,405 and closed within 80 points of its 20 DMA…three month chart target 10,340…volume slightly below average at 336 million shares, similar to Tuesday’s volume…closed above its 20, 30 and 50 DMA. The SPX formed a large black candle that did NOT confirm Tuesday’s hammer…3 month chart target of 1,075…closed above its 20, 30 and 50 DMA. The Nasdaq formed a large black candle that broke below its 20 DMA and fell to its 30 DMA and horizontal support level of 1,665…it is below its 20, 30 and 200 DMA…3 month chart target of 2,065…closed above its 50 DMA. The RUT formed a large black candle that broke below its 20 DMA and closed just below it 30 DMA and 474 horizontal support area…3 month chart target 606…closed above its 50 DMA At the Open on Thursday SPY – large black candle did not confirm hammer FAS – large black candle STT – large black candle did confirm hammer still in bull flag WYNN – large black candle break support of horizontal flag KOL – large black candle did not confirm hammer SCHN – large black candle did not confirm hammer/bullish harami EBAY – large black candle stays above gap support at 200 DMA SNDA – large black candle ZION – black candle in bull flag ADBE – large black candle above bullish engulfing support J NPR – black candle in bull flag above gap support CTV – black candle falls to gap support BBT – gap down white candle OSG – gap down black candle does not confirm hammer in bull flag EL – black spinning top breaks gap support Stocks to Watch on Thursday Leading Stocks Holding Above 30 DMA BIDU, CLB, ICE, DLB, VPRT, CTSH, BAP, CAM, GMCR, ATW, GR, SYNA, EBAY, HDB, PCP, UYG, FSLR, RIMM, WCG, HLF, AMX, MHS, WAB, FAS, AFAM, K, RBN, ESRX, PCLN, VAR, PCR, PPD, HANS, SWN, FLS, TDG, NIHD, RCI, STRA, ACN, AMED, JOYG, MON, MUR, PSYS, NTLS, CHL, DECK, MOS, DV, PETS Moving Above 30 DMA = 1 BDX Moving Below 30 DMA = 13 AAPL, AXYS, BYI, CBST, CPLA, GES, WRC, SNA, SNHY, SPWRA, WMT, X, URE Staying Below 30 DMA AMZN, EZPW, GXDX, JOSB, JW.A, JEC, MCD, PWR, DLTR, USD, DECK, ORCL, SYNA, ALGT, JCOM, NFLX, GME, GILD, GPRO, MYGN, SLGN, BIIB, BKC, APEI, BLUD, ESI Intermediate Term Market Trend: Neutral Short Term Market Trend: Down

Futures Pointing to a Lower Open...

BMO - ES -15 and NQ -21 futures are lower in pre-market trader pointing to a lower open. INTC received major fine from EU for sales tactics and retail sales for April lower than forecasted. Futures are pulling back to Tuesday's support low...watch for bounce or break and trade accordingly... Look at thses charts...is there a potential support bounce in these charts? (click image to enlarge) At the Open on Wednesday SPY – hammer in horizontal flag FAS – black spinning top bounce off 20 DMA STT – hammer in bull flag WYNN – black candle in horizontal flag KOL – hammer in horizontal flag SCHN – hammer/bullish harami EBAY – black spinning top in pennant above 200 DMA SNDA – white candle support bounce ZION – black confirm bearish harami two day bull flag ADBE – black spinning top in bull flag J NPR – white spinning top in bull flag CTV – black spinning top in bull flag BBT – large black candle in bull flag OSG – hammer in bull flag EL – black spinning top in bull flag

Support Bounce Tuesday Afternoon...

DJIA + 50.34, +0.60% SP500 - 0.89, -0.10% NASDAQ Comp. - 15.32, -0.88% Russell 2000 - 6.76, -1.35% Exchange NYSE NASD Advancing 1,651 1,000 Declining 2,080 1,790 Oil $58.85 +$0.35 Gold $923.50 +$10.50 SOX 242.53 -6.33 VIX 31.88 -1.07 The VIX moved down and did NOT confirm the move down in the SPX on Tuesday. From a practical perspective the SPX was flat or unchanged. Strongest Sectors: XLV +1.63%...XLP +1.19%...XLB +1.00% Weakest Sectors: XLY -2.12%...XLF -2.12%...XLI -1.08% Five of nine Sectors moved higher on Tuesday. Healthcare and Consumer Staples, Materials, Utilities and Energy were stronger than SPX -0.10%. Financial stocks stronger than XLF -2.12% include: CME, ICE, TRV, TROW, ALL, AFL, NTRS, MS, AOC, SCHW, MET, GS, MMC, CB, SPG, STT, JPM and IVX. Leading tech stocks stronger than XLK, -0.53% include: MSFT, VZ, DELL, T, IBM, CSCO, ADP and HPQ. Stocks weaker include: AAPL, YHOO, QCOM, GOOG, AMT, AMAT, EMC and MA. Sector Watch Up Trending: Horizontal Breakout: XLB, XLK, XLY Sideways: XLE, XLV, XLF, XLP, XLI Down Trending: XLU SPX Key resistance levels: 944 = horizontal 954 = 200 DMA 957 = short term chart target Key support levels: 904 = weekly S1 891 = 38.2% Fib level 875 = horizontal The SPX opened slightly higher then sold off from the open to the 896 area and rebounded after two days of pull back. Does this sound familiar? Two days of pull back? Does this sound familiar? If it doesn’t sound familar you haven’t been reading this blog over the past several weeks. If it doesn’t you weren’t reading this blog last night. I sincerely hope you are not surprised by this. I hope if you are an intermediate term trader that you didn’t give up this afternoon and sell at the low. If you are a short term trader and exited according to your rules I hope you are prepared to reenter according to your rules if prices rise on Wednesday with a follow through on Tuesday’s support bounce. After a two day pull back look for stock prices to move higher on Wednesday in the market's alternating pattern of one to two thrust days and one to two pause days. Exchange stocks CME and ICE were strong while bank and other financial stocks were again weak. Financial stocks did bounce off their intraday lows around 1 pm ET and moved higher into the close. Monday and Tuesday's pull back fournd support this afternoon at the 61.8% fibbonaci retracement level of last week's 22% rise. Other strong stocks included SNDA from our At the Open on Monday list and drug stocks PFE, GSK, AZN, MRK, SGP, JNJ, LLY, ABT and BMY. Tech stocks also sold off on Tuesday after rising modestly on Monday as sellers took a big bite out of AAPL. XLK made a higher low on Tuesday, so watch for a support bounce on Wednesday. Which of these charts is a bull flag and which is a hammer? (click image to enlarge) Index Commentary The DJIA…white spinning top did NOT confirm Monday’s bearish harami…fell below and rallied to close above horizontal resistance at 8,405…three month chart target 10,340…volume slightly below average at 334 million shares…closed above its 20, 30 and 50 DMA. The SPX formed a hammer…3 month chart target of 1,075…closed above its 20, 30 and 50 DMA. The Nasdaq formed a black candle and found support at its 20 DMA and formed a lower shadow…closed below its 200 DMA…consolidating after reaching short term chart price target of 1,765…3 month chart target of 2,065…closed above its 20, 30 and 50 DMA. The RUT formed a black candle that did confirm Monday’s bearish harami…had a support bounce near its 20 DMA…appears to be forming a horizontal flag…3 month chart target 606…closed above its 20, 30 and 50 DMA At the Open on Wednesday SPY – hammer in horizontal flag FAS – black spinning top bounce off 20 DMA STT – hammer in bull flag WYNN – black candle in horizontal flag KOL – hammer in horizontal flag SCHN – hammer/bullish harami EBAY – black spinning top in pennant above 200 DMA SNDA – white candle support bounce ZION – black confirm bearish harami two day bull flag ADBE – black spinning top in bull flag JNPR – white spinning top in bull flag CTV – black spinning top in bull flag BBT – large black candle in bull flag OSG – hammer in bull flag EL – black spinning top in bull flag Stocks to Watch on Wednesday Leading Stocks Holding Above 30 DMA BIDU, CLB, ICE, DLB, VPRT, AAPL, CTSH, AXYS, BAP, CAM, GMCR, ATW, GR, SYNA, EBAY, GES, SNA, WRC, HDB, PCP, UYG, FSLR, WCG, RIMM, X, BYI, CBST, HLF, AMX, MHS, WAB, FAS, AFAM, JW.A, K, RBN, ESRX, PCLN, URE, VAR, PCR, PPD, HANS, SWN, FLS, SNHY, TDG, NIHD, RCI, STRA, ACN, AMED, JOYG, MON, MUR, PSYS, SPWRA, NTLS, CHL, DECK, MOS, GXDX, CBST, DV, PETS Moving Above 30 DMA = 2 CPLA, WMT Moving Below 30 DMA = 3 AMZN, JOSB, EZPW Staying Below 30 DMA JEC, MCD, PWR, DLTR, USD, DECK, ORCL, SYNA, ALGT, JCOM, NFLX, GME, GILD, GPRO, BDX, CBST, MYGN, SLGN, BIIB, BKC, APEI, BLUD, ESI Intermediate Term Market Trend: Neutral Short Term Market Trend: Neutral

Futures Pointing to a Slightly Higher Open...

10:10 am ET - Markets move lower after slightly higher open, once again proving that the overnight futures only give us the open not even the trend right after the open... BMO - ES +4 and NQ +6 are slightly higher in pre-market trading pointing to a flat to slightly higher open. Energy, financial and tech stocks are slightly higher in pre-market trading. Oil prices are higher over night on news that US recession is easing and news is that C is using most of the $45 billion in TARP to make new loans. C is higher in pre-market trading. Check out Key Topics in the left hand menu... Looking before the open... (click image to enlarge) At the Open on Tuesday SPY – black spinning top in horizontal flag FAS – black spinning top in pennant STT – black candle at low of high day HANS – white candle…resistance break…new high close WYNN – white candle confirm bullish harami KOL – shooting star in horizontal flag SCHN – black spinning top close below of the high day EBAY – white spinning top in pennant above 200 DMA ISRG – white spinning top above horizontal break out SNDA – bullish engulfing ZION – bearish harami LEAP – white spinning top ADBE – bullish engulfing in bull flag

Bearish Harami Monday...

DJIA - 155.88, -1.82% SP500 - 19.99, -2.15% NASDAQ Comp. - 7.76, -0.45% Russell 2000 - 9.88, -1.93% Exchange NYSE NASD Advancing 1,077 1,125 Declining 2,651 1,668 Oil $58.50 -$.13 Gold $913.00 -$1.40 SOX 248.86 -0.79 VIX 32.87 +0.82 The VIX moved up and did confirm the move down in the SPX on Monday. Strongest Sectors: XLK +0.29%...XLU -0.44%...XLP -0.48% Weakest Sectors: XLF -5.84%...XLE -3.05%...XLI -2.98% Eight of nine Sectors moved lower on Monday. Technology, Utilities, Consumer Staples, Materials, Health Care and Consumer Discretionary were stronger than SPX -2.15%. Financials, Energy and Industrials, last week’s winners, were Monday’s biggest losers. Financial stocks weaker than XLF -5.84% include: PRU, PANC, STT, AFL, USB, KEY, ZION, RF, MET, BAC, AXP, BK, JPM, MS, TROW, IVZ, WFC and ETF’S UYG and FAS. Leading tech stocks stronger than XLK, +0.29% include: SYMC, ADBE, YHOO, DELL, IBM, ORCL, HPQ, INTC, T, AMT, QCOM and AAPL. Stocks weaker include: GLW, EMC and MA. Sector Watch Up Trending: Horizontal Breakout: XLB, XLK, XLY Sideways: XLE, XLV, XLF, XLP, XLI Down Trending: XLU After Friday's thrust day, stocks again had a pause day. Tomorrow can be a second pause day or rotate to a thrust day once again. Many stocks formed a high day Thursday or Friday and are still above the low of the high day. That puts us on Yellow Alert again for short term traders looking for a break of the low of the high day. Trading rotated out of financials and into tech stocks on Monday as all four major indices finished lower. The SPX, DJIA and RUT each formed a bearish harami candle pattern. The DJIA could also be viewed as tweezers top candle pattern. The SPX stayed above key support levels: 904 = weekly S1 891 = 38.2% Fib level 875 = horizontal Tech stocks that pulled back from their highs finished slighty higher or lower for the day. Look at MSFT, AAPL, CSCO, GOOG, ORCL, INTC, QCOM, RIMM, AMZN and EBAY, they had a total net change of $1.18. That's for all ten stocks, six were up and four were down. Index Commentary - Yellow Alert The DJIA…bearish harami, tweezers top…again closed above horizontal resistance at 8,405…three month chart target 10,340…volume slightly below average at 332 million shares…closed above its 20, 30 and 50 DMA. The SPX…bearish harami…3 month chart target of 1,075…closed above its 20, 30 and 50 DMA. The Nasdaq formed a white spinning top above Thursday’s low…below its 200 DMA…consolidating after reaching short term chart price target of 1,765…3 month chart target of 2,065…closed above its 20, 30 and 50 DMA. The RUT formed a bearish harami…3 month chart target 606…closed above its 20, 30 and 50 DMA Can you tell the difference between a Bullish Harami, Bullish Engulfing and a Piercing Line pattern? (click image to enlarge) At the Open on Tuesday SPY – black spinning top in horizontal flag FAS – black spinning top in pennant STT – black candle at low of high day HANS – white candle…resistance break…new high close WYNN – white candle confirm bullish harami KOL – shooting star in horizontal flag SCHN – black spinning top close below of the high day EBAY – white spinning top in pennant above 200 DMA ISRG – white spinning top above horizontal break out SNDA – bullish engulfing ZION – bearish harami LEAP – white spinning top ADBE – bullish engulfing in bull flag Stocks to Watch on Tuesday Leading Stocks Holding Above 30 DMA BIDU, CLB, ICE, DLB, VPRT, AAPL, CTSH, AXYS, BAP, CAM, GMCR, JOSB, ATW, GR, SYNA, EBAY, GES, SNA, WRC, HDB, PCP, UYG, FSLR, WCG, RIMM, X, BYI, CBST, HLF, AMX, MHS, WAB, FAS, AFAM, JW.A, K, RBN, ESRX, PCLN, URE, VAR, PCR, PPD, HANS, SWN, FLS, SNHY, TDG, NIHD, RCI, STRA, ACN, AMED, EZPW, JOYG, MON, MUR, PSYS, SPWRA, NTLS, CHL, DECK, MOS, GXDX Moving Above 30 DMA = 3 AMZN, DV, PETS Moving Below 30 DMA = 3 JEC, MCD, PWR Staying Below 30 DMA DLTR, USD, DECK, ORCL, SYNA, ALGT, JCOM, NFLX, GME, CPLA, GILD, GPRO, BDX, CBST, MYGN, SLGN, BIIB, WMT, BKC, APEI, BLUD, ESI Intermediate Term Market Trend: Neutral Short Term Market Trend: Neutral

Futures Point to a Lower Open...

Check out these charts before the close:

(click image to enlarge)

1:38 pm ET - Learn the Discipline update - this morning we entered only our second futures trade in the Model Portfolio as we discussed in the May 2 post. We bought 10 NQM9 contracts at 9:43:10 am MT at 1394.50. The position was sold at 11:37:56 at 1405.50 on a pre-entered limit order. Net profit to the portfolio was $2,130 after commissions. 11:25 am ET - after underperforming the SPX last week...Nasdaq has rallied into positive territory as has SOX and XLK...IBM, AAPL, QCOM, ADBE, LLTC, XLNX, PCLN, CTSH, SNDA and many others having a nice support bounce off this pull back... 11:10 am ET - Power company arrived and yes, once again History Repeats Itself...one of the core tenets of technical analysis...an unsuspecting squirrel has fallen victim to the power transformer by doing what he should have not done...reminds me of traders...Power just went on...fuse obviously replaced... 10:42 am ET - Just got off the phone with the power company...large noise on the street and just like that power is gone...while electrical outages are relatively rare they do happen from time to time...on more than one occaison in the past a poor unsuspecting squirrel has jumped on to a pole transformer, fried itself and blown the transformer in the process...with the advent of spring...that may have just happened again...ES has rallied to 914.50...news is attributing Monday morning's sell off to the capital needs of four major banks...this type of news is generally a ripple...remember Chrysler a couple of weeks ago (you forgot already)...stay focused on trend, support and resistance...do you remember the direction of the trend? 10:07 am ET - ES just broke through 909 after making higher low at 907 at 10:00 am... 10:00 am ET - PCLN is moving higher...CTSH rebounded to near breakeven...ES has found at least temporary support at the 905.75 area starting at 9:50 am... 9:45 am ET - this certainly has started out as a pause/pullback day, which we stated Friday there was equal probability for it to be...watch key support levels and trade according to your rules... 9:35 am ET - Markets do open lower...watch Friday's low which the SPY is trading near for a break of the low of the high day... BMO - ES -13 and NQ -20 futures are lower in pre-market trading pointing to a lower open. Since Friday was the high day, key support levels to watch are: SPX = 909 SPY = 90.91 ES = 903 Check out these patterns... (click image to enlarge) At the Open on Monday SPY - bearish harami FAS – white candle inside day STT – large white candle 200 DMA breakout HANS – white hanging man, resistance break out post earnings WYNN – bullish harami KOL – white spinning top in horizontal flag SCHN – white spinning top in horizontal flag EBAY – large white candle above 200 DMA ISRG – black spinning top above horizontal break out SNDA – black spinning top bull flag or double top? ZION - large white candle LEAP - double top or horizontal breakout?

Learn the Discipline

Learn the Discipline Model Portfolio Summary – Week Fourteen All the positions opened since March 10 are listed in the table below. Positions prior to March 10 are listed in prior posts which can be accessed under Key Topics; Learn the Discipline in the left hand menu. Those new to the blog can find a description in the February 7 post that gives an overview of how the Model Portfolio is being run. You can read it by clicking here: http://chartsignals.blogspot.com/2009/02/coming-next-week_07.html As of Friday May 8 the portfolio is 69.05% invested in stocks. The balance is in cash. This is just below last weeks invested level. The portfolio was stopped out of two positions this week: GME and ALGT. We did not enter any new stock positions this week. The total value of open stock positions is $120,879.28. The portfolio value increased this week while the SPX rose 51 points. There are now 32 positions that have been open at least four weeks ranging in returns from +1.05 to +139.77%. The longer intermediate term trend in the market is still neutral or sideways. These 32 positions indicate that this intermediate term strategy is working. Since February 2 the portfolio has increased 15.16% while the SPX has risen 12.57%. This is 20% better than the SPX. During that time the SPX has been fully invested while the Model Portfolio has mostly been less than 50% invested until the past two weeks. Because the Model Portfolio has been less than fully invested it has been exposed to less market risk than the SPX. On a risk adjusted basis the portfolio is outperforming the SPX by more than 100%. Originally we stated that we would start the portfolio on using stocks and the One Green Arrow Strategy as the core concept behind decisions. We also indicated that we would make modifications. See last week’s comment regarding futures trading. Moving forward we will look to take similar short term futures positions when appropriate. Many funds employ this type of strategy when they have large cash balances and use the futures as a temporary but quick way to raise their investment levels to participate in market moves. Futures could also be used to hedge a stock portfolio against temporary declines. Intermediate term stock positions will continue to be our primary strategy. (click image to enlarge)

Financial Stocks Lead SPX to a New High Close...

DJIA + 164.80, +1.96% SP500 + 21.84, +2.41% NASDAQ Comp. + 22.76, +1.33% Russell 2000 + 18.88, +3.83% Exchange NYSE NASD Advancing 3,191 2,113 Declining 580 701 Oil $58.63 +$1.92 Gold $914.40 -$0.60 SOX 249.65 -4.90 VIX 32.05 -1.39 The VIX moved down and did confirm the move up in the SPX on Friday. This is the lowest close on the VIX since September 16, 2008. Strongest Sectors: XLF +7.43%...XLE +4.26%...XLI +3.66% Weakest Sectors: XLK -0.12%...XLP +1.29%...XLU +1.45% Eight of nine Sectors moved higher on Friday. Financials, Energy and Industrials were stronger than the SPX +2.41% on Friday. These same three sectors led the market higher for the week: XLF +22.25% XLE +9.69% XLI +6.86% Financial stocks stronger than XLF +7.43% include: ZION, RF, PNC, STT, AFL, WFC, MET, JPM AXP, BK and ETF’S UYG and FAS. Leading tech stocks stronger than XLK, -0.12% include: EBAY, GOOG, EMC, MA, YHOO, ADP, MSFT, HPQ, AMAT, AAPL and VZ. Stocks weaker include: INTC, DELL, AMT, TXN, QCOM, CSCO, IBM and ADBE. Sector Watch Up Trending: Horizontal Breakout: XLB, XLK, XLY Sideways: XLE, XLV, XLF, XLP, XLI Down Trending: XLU Financial stocks soared on Monday, Wednesday and again on Friday. Energy stocks also were strong on Monday Wednesday and Friday. Technology stocks were the only sector down for the week losing -2.23%. Industrials, Transportation and Healthcare each gained 6%+ for the week. The Nasdaq which was the first of the broad indices to break above its 200 DMA on Monday, closed less that three points below that level on Friday. It is clear that traders have rotated at least temporarily from Tech stocks to Financials and Energy. XLF closed 51 cents below its 200 DMA and XLE touched its 200 DMA on Friday before closing 36 cents below. The SPX, RUT and DJIA are still trading below their 200 DMA. Key resistance levels on the SPX are: 944 = horizontal 954 = 200 DMA 957 = short term chart target Key support levels: 904 = weekly S1 891 = 38.2% Fib level 875 = horizontal Going into next week the positives are the trend is up, the SPX made a new high close on Friday, the VIX made a new low close and trading rotated from Technology to Financials rather than the broad index selling off. The negative is that the index is near horizontal, 200 DMA and short term chart target resistance levels. These of course are levels where selling typically appears as is evidenced by weakness in the Nasdaq and XLK this week. Keep in mind the pattern of the past nine weeks of one to two thrust days and one to two pause days which continued this week. There is little technical evidence on the chart as of Friday to suggest a reversal of the nine week up trend or an end of the alternating one to two day pattern. Monday is as probable to be a pause day as it is to be a thrust day. Trade the trend and watch for a pull back to support levels. Index Commentary The DJIA…large white candle did NOT confirm Thursday’s dark cloud cover…again closed above horizontal resistance at 8,405…three month chart target 10,340…volume slightly above average at 428 million shares…closed above its 20, 30 and 50 DMA. The SPX…large white candle that did NOT confirm Thursday’s dark cloud cover…25 points below 200 DMA…3 month chart target of 1,075…closed above its 20, 30 and 50 DMA. The Nasdaq formed a bullish harami hammer below its 200 DMA…failed to achieve short term chart price target of 1,765…3 month chart target of 2,065…closed above its 20, 30 and 50 DMA. The RUT formed a large white candle with no follow through on Thursday’s bearish engulfing counter trend pull back…new high close…3 month chart target 606…closed above its 20, 30 and 50 DMA Check back early Monday for our At the Open on Monday List At the Open on Friday Performance The Nasdaq continued to under perform the SPX +2.41% on Friday. Ironically, even SPY had a slightly lower return than the SPX on Friday. As a result just 10 of our 18 stocks had a higher return than the SPX on Friday. However, the average return of all 18 stocks was 4.1%...a 70% higher return than the SPX. FAS – white candle inside day +20.30% STT – large white candle 200 DMA breakout +15.65 HANS – white hanging man, resistance break out post earnings +11.80% WYNN – bullish harami +7.35% KOL – white spinning top in horizontal flag +5.15% SCHN – white spinning top in horizontal flag +3.92% EBAY – large white candle above 200 DMA +3.82% SPG – white hanging man after triangle breakout +3.61% MEE – white spinning top in horizontal flag +2.83% DE – bullish harami above 200 DMA +2.53% SPY – white hanging man in horizontal flag +2.33% DHR – doji horizontal flag above 200 DMA +0.62% RIMM – bullish in bull flag +0.56% QLD – bullish harami in bull flag +0.36% ISRG – black spinning top above horizontal break out -0.19% ADBE – black spinning top in bull flag -0.82% SHLD – black spinning top below 200 DMA -1.41% SNDA – black spinning top bull flag or double top? -4.55% Stocks to Watch on Monday Leading Stocks Holding Above 30 DMA BIDU, CLB, ICE, DLB, PWR, VPRT, AAPL, CTSH, AXYS, BAP, CAM, GMCR, JOSB, ATW, GR, SYNA, EBAY, GES, SNA, WRC, HDB, PCP, UYG, FSLR, WCG, RIMM, X, BYI, CBST, HLF, AMX, MHS, WAB, FAS, AFAM, JW.A, K, RBN, ESRX, PCLN, URE, VAR, PCR, PPD, HANS, SWN, FLS, SNHY, TDG, NIHD, RCI, STRA, ACN, AMED, EZPW, JOYG, MON, MUR, PSYS, SPWRA, NTLS, CHL, DECK, MOS, GXDX Moving Above 30 DMA = 2 JEC, MCD Moving Below 30 DMA = 3 DLTR, AMZN, USD Staying Below 30 DMA DECK, ORCL, SYNA, ALGT, JCOM, NFLX, PETS, GME, CPLA, GILD, GPRO, BDX, CBST, MYGN, DV, SLGN, BIIB, WMT, BKC, APEI, BLUD, ESI Intermediate Term Market Trend: Neutral Short Term Market Trend: Neutral

Futures Pointing to a Higher Open...

Dave will be in the Weekly Wrap with Tom Sosnoff and Ben Watson at 4:30 pm ET. 4:00 pm ET - SPX closes up 21.84, 2.41%...FAS +2.11, 20.30%...It's a Great Trading Day, It's a Great Trading Day... 3:15 pm ET - Support is breaking ES is falling... 3:10 pm ET - ES did breakout and rise to 927.75 and then rolled over and now back at 924 breakout are...is old resistance new support or will week end selling push lower? Is there one more rally in ES? 2:20 pm ET - ES is at the early morning high of 923.75 looking to breakout...if breakout succeeds look for move to 930+... 1:25 pm ET - Markets have provided plenty of opportunity today with the early am pullback...after a run in first 20 minutes of trading, prices pulled back until 10:30 am where the ES formed a double bottom and a breakout aroung 11:00 am. The ES is trading in the 922 - 923 range which is the area of its early morning high. The question at the moment is: Will the ES breakout of resistance and move to 930 plus or will it pull back? Well let's watch and find out... 9:45 am ET - Futures and stocks pulled back right before the open and created a nice entry opportunity near the open and prices have now rebounded...nice opportunity to enter ES at 9:33 at 915.75 already +5 in just 12 minutes...opportunity to enter FAS at 9:39 at 10.90 already +0.34 cents in 8 minutes...we'll see how the trend develops but stocks are moving to the upside.... BMO - ES +11 and NQ +11 futures are trading higher at 9:10 am ET pointing to a higher open. Financials are also strong in pre-market trading with XLF +1.73% and FAS +6.04%. HANS which reported earnings last night is up +$3.44 in pre-market. It appears that many of Thursday's bearish candles may not follow through today and that yesterday may be a single pause day. Friday should be an interesting day to see if buyers or sellers control. The Jobless Claims were 539K better than expectations of 610K, which likely will give some traders a reason to buy this morning. (click image to enlarge) At the Open on Friday SPY – bearish engulfing…up in after hours WYNN – black candle confirms bearish harami in bull flag STT - up in pre-market trading HANS - up in pre-market trading SCHN – bearish engulfing KOL – dark cloud cover MEE – bearish engulfing SNDA – black spinning top confirms shooting star ADBE – black candle confirms hanging man EBAY – bearish engulfing SHLD – bearish engulfing ISRG – black spinning top, new high close DHR – bearish engulfing DE – bearish engulfing RIMM – bearish engulfing SPG – bearish harami QLD – bearish engulfing FAS – dark cloud cover…up in after hours

Markets Pull Back...Financials Up in After Market...

DJIA - 102.43, -1.20% SP500 - 12.14, -1.32% NASDAQ Comp. - 42.86, -2.44% Russell 2000 - 12.15, -2.41% Exchange NYSE NASD Advancing 1,322 912 Declining 2,430 1,864 Oil $56.71 +$0.37 Gold $915.00 +$4.50 SOX 254.55 -16.06 VIX 33.44 +0.99 The VIX moved up and did confirm the move down in the SPX on Thursday. Except for Tuesday and Wednesday, today’s close on the VIX is still its lowest level since September 19, 2008. Strongest Sectors: XLV +2.03%...XLU +0.52%...XLP +0.40% Weakest Sectors: XLK -3.82%...XLB -3.28%...XLF -2.88% Six of nine Sectors moved lower on Thursday. Healthcare, Utilities, Consumer Staples and Energy were stronger than the SPX -1.32%. Financial stocks stronger than XLF -2.88% include: PRU, ALL, BAC, ZION, AFL, C, CB, MET, and ICE. Stocks significantly weaker include: KEY, RF, USB, WFC, CME, MME, PNC, TROW, SCHW, NTRS, JPM, SPG, MS, IVZ, AXP and GS. Leading tech stocks stronger than XLK, -3.82% include: YHOO, ADP, MA, GOOG, IBM, INTC, MSF, EBAY, AAPL, ADBE, VZ, QCOM, ORCL, CSCO, EMC and AMT. Stocks weaker include: SYMC, DELL, GLW, AMAT, HPQ, T and TXN. Sector Watch Up Trending: Horizontal Breakout: XLB, XLK, XLY Sideways: XLE, XLV, XLF, XLP, XLI Down Trending: XLU Wednesday’s Yellow Alert for short term traders turned red on Thursday as the Nasdaq, SOX and RUT all three broke below the low of the high day. This can be an exit signal for short term bullish trades and potential short term counter trend entry signal. Technology, Materials and Financial stocks led the market lower on Thursday. The DJIA and SPX essentially gave back Wednesday’s gains and closed near Tuesday’s close. The Nasdaq, SOX and RUT which were positive but relatively weaker than the SPX and DJIA on Wednesday, took it in the shorts on Thursday. In after hours trading Financial stocks were higher: FAS +0.88, UYG +0.22, XLF +0.33, BAC +1.21, and STT +3.26. If this holds overnight financial and other stocks could be on the rise again Friday morning continuing the the pattern of one to two days thrust to one to two days pause, with Thursday being a pause day. SYMC which announced earnings Wednesday evening, fell on Thursday after reporting lower than expected revenues and received a downgrade from an analyst at Jefferies who thinks SYMC is losing market share. SYMC sold off almost 15% on 66 million shares, over three times average volume of 18.6 million shares as the largest declining stock in the NDX. Index Commentary The DJIA…dark cloud cover outside day closed above horizontal resistance at 8,405…three month chart target 10,340…volume above average at 476 million shares…closed above its 20, 30 and 50 DMA. The SPX…dark cloud cover outside day…3 month chart target of 1,075…closed above its 20, 30 and 50 DMA. The Nasdaq formed a bearish engulfing outside day black hanging man closing below its 200 DMA…failed to achieve short term chart price target of 1,765…3 month chart target of 2,065…closed above its 20, 30 and 50 DMA. The RUT formed a bearish engulfing outside day …3 month chart target 606…closed above its 20, 30 and 50 DMA At the Open on Friday SPY – bearish engulfing…up in after hours WYNN – black candle confirms bearish harami in bull flag SCHN – bearish engulfing KOL – dark cloud cover MEE – bearish engulfing SNDA – black spinning top confirms shooting star ADBE – black candle confirms hanging man EBAY – bearish engulfing SHLD – bearish engulfing ISRG – black spinning top, new high close DHR – bearish engulfing DE – bearish engulfing RIMM – bearish engulfing SPG – bearish harami QLD – bearish engulfing FAS – dark cloud cover…up in after hours Stocks to Watch on Friday Leading Stocks Holding Above 30 DMA BIDU, CLB, ICE, DLB, PWR, VPRT, AMZN, USD, AAPL, CTSH, AXYS, BAP, CAM, GMCR, JOSB, ATW, GR, SYNA, EBAY, GES, SNA, WRC, HDB, PCP, UYG, FSLR, WCG, RIMM, X, BYI, CBST, HLF, AMX, MHS, WAB, FAS, AFAM, JW.A, K, RBN, ESRX, PCLN, URE, VAR, PCR, PPD, HANS, SWN, FLS, SNHY, TDG, NIHD, RCI, STRA, ACN, AMED, EZPW, JOYG, MON, MUR, PSYS, SPWRA, NTLS, CHL, DECK, MOS Moving Above 30 DMA = 2 DLTR, GXDX Moving Below 30 DMA = 4 DECK, JEC, ORCL, SYNA Staying Below 30 DMA ALGT, JCOM, NFLX, PETS, GME, CPLA, GILD, GPRO, MCD, BDX, CBST, MYGN, DV, SLGN, BIIB, WMT, BKC, APEI, BLUD, ESI Intermediate Term Market Trend: Neutral Short Term Market Trend: Neutral

Futures Pointing to a Slightly Higher Open...

BMO - ES +8.00 and NQ +1.25 are slightly higher in pre-market trading about 30 minutes before the market open, pointing to a flat to slightly higher open. Look for financials to lead at the open... (click image to enlarge) At the Open on Thursday SPY – hanging man SCHN –white spinning top KOL – large white candle MEE – shooting star SNDA – shooting star ADBE – hammer like EBAY –black spinning top SHLD – black shooting star ISRG – large white candle new high close DHR – black hanging man, above 200 DMA DE – white candle new high close above 200 DMA RIMM – spinning top new high close SPG – large white candle breakout ascending triangle pattern QLD – black hanging man FAS – large white candle

Large White Candle and New High Close...

DJIA + 101.63, +1.21% SP500 + 15.73, +1.74% NASDAQ Comp. + 4.98, +0.28% Russell 2000 + 2.54, +0.51% Exchange NYSE NASD Advancing 2.688 1,549 Declining 1,071 1,213 Oil $56.34 +$2.50 Gold $910.50 +$6.80 SOX 270.61 +1.91 VIX 32.45 -0.91 The VIX moved down and did confirm the move up in the SPX on Wednesday. The VIX closed at its lowest level since September 19, 2008. Strongest Sectors: XLF +7.96%...XLE +3.88%...XLI +1.58% Weakest Sectors: XLV -0.60%...XLU -0.60%...XLB +0.41% Seven of nine Sectors moved higher on Wednesday. Financials, Energy, and Industrials were stronger than the SPX +1.74%. Financial stocks stronger than XLF +7.96% include: ZION, BAC, MET, KEY, C, WFC, PRU, PNC, STT, BK, ALL, SPG, AFL, MMC and ETF’s UYG and FAS. Leading tech stocks stronger than XLK, +0.57% include: ADP, GLW, TXN, AMAT, YHOO and T. Sector Watch Up Trending: Horizontal Breakout: XLB, XLK, XLY Sideways: XLE, XLV, XLF, XLP, XLI Down Trending: XLU Financial stocks were the strongest sector on Wednesday up +7.96%. Financials and Energy stocks led the SPX and DJIA higher. The Nasdaq, SOX and RUT on the other hand were relatively weak. Keep in mind the pattern of the this up trend; one to two thrust day alternating with one to two pause days. Be prepared for a thrust or pause on Thursday. This is still a Yellow Alert for short term traders while intermediate term traders continue with the trend. Coal stocks KOL, ANR, MEE, CNX, JRCC, CLF; gold stocks GDX, GG, GOLD, AEM, NEM; financial stocks ZION, RF, KRE, KBE, NDAQ; solar stocks FSLR, JASO were big movers on Wednesday. Index Commentary – Yellow Alert The DJIA…large white candle new high close above 8500 and horizontal resistance at 8,405…three month chart target 10,340…volume above average at 454 million shares…closed above its 20, 30 and 50 DMA. The SPX…large white candle new high close…3 month chart target of 1,075…closed above its 20, 30 and 50 DMA. The Nasdaq formed a black hanging man above its 200 DMA…closed within six points of short term chart price target of 1,765…3 month chart target of 2,065…closed above its 20, 30 and 50 DMA. The RUT formed a white hanging man …3 month chart target 606…closed above its 20, 30 and 50 DMA Many of the up trending stocks in the At the Open list had bearish candles on Tuesday that did not confirm on Wednesday and moved higher some to a new high close. At the Open on Thursday SPY – hanging man SCHN –white spinning top KOL – large white candle MEE – shooting star SNDA – shooting star ADBE – hammer like EBAY –black spinning top SHLD – black shooting star ISRG – large white candle new high close DHR – black hanging man, above 200 DMA DE – white candle new high close above 200 DMA RIMM – spinning top new high close SPG – large white candle breakout ascending triangle pattern QLD – black hanging man FAS – large white candle Stocks to Watch on Thursday Leading Stocks Holding Above 30 DMA BIDU, CLB, ICE, DLB, PWR, VPRT, AMZN, USD, AAPL, CTSH, AXYS, BAP, CAM, GMCR, JOSB, ATW, GR, SYNA, EBAY, GES, SNA, ORCL, WRC, HDB, PCP, UYG, FSLR, WCG, RIMM, X, BYI, CBST, HLF, AMX, MHS, WAB, FAS, AFAM, JW.A, K, RBN, ESRX, PCLN, URE, VAR, PCR, PPD, HANS, SWN, FLS, SNHY, TDG, NIHD, RCI, STRA, ACN, AMED, EZPW, JOYG, MON, MUR, PSYS, SPWRA, NTLS, CHL, DECK, MOS Moving Above 30 DMA = 1 JEC Moving Below 30 DMA = 5 ALGT, DLTR, GXDX, JCOM, NFLX Staying Below 30 DMA PETS, GME, CPLA, GILD, GPRO, MCD, BDX, CBST, MYGN, DV, SLGN, BIIB, WMT, BKC, APEI, BLUD, ESI Intermediate Term Market Trend: Neutral Short Term Market Trend: Up

Futures Point to a Higher Open...

BMO - ES +7 and NQ +6 are higher in pre-market trading pointing to a higher open. Support bounce appears to be happening and after one pause day markets may be continuing the current uptrend. (click image to enlarge) At the Open on Wednesday SPY – doji bearish harami SCHN –white spinning top KOL – hanging man/bearish harami MEE – hanging man SNDA – bearish engulfing ADBE – white hammer EBAY –large white candle horizontal flag breakout SHLD – black spinning top ISRG – white candle new high close DHR – white candle new high close, above 200 DMA DE – white spinning top new high close above 200 DMA RIMM – doji after short term up trend SPG – bearish harami in ascending triangle pattern QLD doji bearish harami FAS – white shooting star bearish harami

Bearish Harami Tuesday as Uptrend Pauses...

DJIA - 16.09, -0.19% SP500 - 3.44, -0.38% NASDAQ Comp. - 9.44, -0.54% Russell 2000 - 4.27, -0.84% Exchange NYSE NASD Advancing 1,721 1,261 Declining 2,001 1,515 Oil $53.84 -$0.63 Gold $903.70 +$2.10 SOX 268.70 -3.61 VIX 34.53 -0.77 The VIX moved down and did NOT confirm the move down in the SPX on Tuesday. The VIX closed at its lowest level since September 25, 2008. A falling VIX is generally bullish. Strongest Sectors: XLV +1.14%...XLI +0.31%...XLY -0.04% Weakest Sectors: XLF -1.45%...XLE -1.34%...XLP -0.85% Seven of nine Sectors moved lower on Tuesday. Healthcare, Industrials, Consumer Discretionary and Utilities were stronger than the SPX -0.38%. Financial stocks stronger than XLF -1.45% include: ICE, CME, BAC, C, AFL, AOC, IVZ, GS, PRU, MS, CB, MMC, ALL ZION, RF, SCHW and USB. Leading tech stocks stronger than XLK, -0.62% include: AMT, YHOO, EBAY, GLW, MA, ADP, ADBE, CSCO, AAPL, QCOM, GOOG, ORCL, EMC, IBM and SYMC. Sector Watch Up Trending: Horizontal Breakout: XLB, XLK, XLY Sideways: XLE, XLV, XLF, XLP, XLI Down Trending: XLU Dave will be doing an Extended Virtual Coaching Options Wednesday for four hours from 11 am ET to 3 pm ET... Financial stocks were the weakest sector on Tuesday down -1.45%, but this was after a 10% gain on Monday. A small pullback caused by profit taking after such a large gain. Airline stocks UAUA, AMR, LCC, DAL and CAL, gambling stocks WYNN, MGM and LVS, ICE after reporting earnings, retailer ARO and PCLN had strong moves on Tuesday. The DJIA actually made a higher high and the SPX, Nasdaq and RUT all formed inside days and bearish harami. This leads us to another Yellow Alert for short term traders on Wednesday looking for a move below Tuesday’s low. The intermediate term traders likely will see any pull back as price fluctuation. The indices had pause days on Thursday and Friday a thrust day on Monday and a pause day Tuesday continuing to follow the pattern of the past 8 weeks. If the indices have another pause/pull back day on Wednesday and it is modest look for another thrust day potentially as early as Thursday. Index Commentary – Yellow Alert The DJIA formed a doji that stayed above Monday’s S1 level and horizontal resistance at 8,405…three month chart target 10,340…volume was near average at 311 million shares…closed above its 20, 30 and 50 DMA. The SPX formed a hanging man/bearish harami above Monday’s S1 level and horizontal resistance of 875…3 month chart target of 1,075…closed above its 20, 30 and 50 DMA. The Nasdaq formed a hanging man/bearish harami candle that closed above Monday’s S1 level and its 200 DMA…closed within two points of short term chart price target of 1,765…3 month chart target of 2,65…closed above its 20, 30 and 50 DMA. The RUT formed a hanging man/bearish harami candle that closed above Monday’s S1 level …3 month chart target 606…closed above its 20, 30 and 50 DMA At the Open on Wednesday SPY – doji bearish harami SCHN –white spinning top KOL – hanging man/bearish harami MEE – hanging man SNDA – bearish engulfing ADBE – white hammer EBAY –large white candle horizontal flag breakout SHLD – black spinning top ISRG – white candle new high close DHR – white candle new high close, above 200 DMA DE – white spinning top new high close above 200 DMA RIMM – doji after short term up trend SPG – bearish harami in ascending triangle pattern QLD doji bearish harami FAS – white shooting star bearish harami Stocks to Watch on Wednesday Leading Stocks Holding Above 30 DMA BIDU, CLB, ICE, ALGT, DLB, PWR, VPRT, AMZN, USD, AAPL, CTSH, AXYS, BAP, CAM, GMCR, JCOM, JOSB, ATW, GR, SYNA, EBAY, GES, SNA, ORCL, WRC, HDB, PCP, UYG, FSLR, WCG, RIMM, X, BYI, CBST, HLF, AMX, MHS, WAB, FAS, AFAM, JW.A, K, RBN, ESRX, PCLN, URE, VAR, PCR, PPD, HANS, SWN, FLS, SNHY, GXDX, TDG, NIHD, RCI, STRA, ACN, AMED, EZPW, JOYG, MON, MUR, PSYS, SPWRA, NTLS, CHL, DECK, DLTR, MOS, NFLX Moving Above 30 DMA = 0 Moving Below 30 DMA = 1 PETS Staying Below 30 DMA GME, CPLA, GILD, GPRO, JEC, MCD, BDX, CBST, MYGN, DV, SLGN, BIIB, WMT, BKC, APEI, BLUD, ESI Intermediate Term Market Trend: Neutral Short Term Market Trend: Up

Futures Point to a Flat to Slightly Lower Open....

BMO - ES -3.00 and NQ -1.50 point to a flat to slightly lower open. With the futures down so little 30 minutes before the open, it could go either way. If the pattern of the last 8 weeks continues Tuesday could be a pause day or a second thrust day...the futures just aren't giving us much of a clue for the open...so we'll just have to watch it in real-time. With yesterday's breakout, the key will be to see if a stock or index holds above support...Remember the intermediate term (8 week) trend is still up and we are referring to the short term, one to two day pull back at this point. Dave will be in VC Options today from 11 am to 1 pm ET. (click image to enlarge) At the Open on Tuesday SPY – large white candle +3.40% SCHN – large white candle +5.11% KOL – large white candle +12.26% MEE – large white candle +21.14% SNDA – spinning top at resistance +4.44 ADBE – spinning top/hammer -2.80% on analyst downgrade EBAY –white spinning top in horizontal flag +1.39% SHLD – large white candle +4.28% ISRG – white candle +4.17% DHR – large white candle at 200 DMA +3.63% DE – white candle breakout of 200 DMA +5.13% RIMM – spinning top +2.77% SPG – large white candle +9.31% QLD – white candle +4.23% FAS – large white candle +26.85%

Monday Market Moves Higher...

DJIA + 214.33, +2.61% SP500 + 29.72, +3.39% NASDAQ Comp. + 44.36, +2.58% Russell 2000 + 19.84, +4.07% Exchange NYSE NASD Advancing 3,171 2,152 Declining 613 648 Oil $54.47 +$1.27 Gold $901.60 +$14.00 SOX 272.31 +14.12 VIX 34.53 -0.77 The VIX moved down and did confirm the move up in the SPX on Monday. Strongest Sectors: XLF +10.14%...XLB +5.64%...XLE +4.00% Weakest Sectors: XLU +1.51%...XLP +1.54%...XLV +1.66% All nine Sectors moved higher on Monday. Financials, Materials and Energy moved more than the SPX +3.39%. Financial stocks stronger than XLF +10.14% include: RF, WFC, ZION, KEY, BAC, PNC, USB, AXP, JPM and ETF’S UYG and FAS. Leading tech stocks stronger than XLK, +1.83% include: INTC, AMAT, GLW, AAPL, DELL, MA, EMC, T, TXN, and GOOG. Tech stocks weaker include: HPQ, QCOM, VZ, IBM, EBAY, YHOO, MSFT, SYMC, CSCO, ADP, ORCL, ADBE and AMT. Sector Watch Up Trending: Horizontal Breakout: XLB, XLK, XLY Sideways: XLE, XLV, XLF, XLP, XLI Down Trending: XLU Monday saw a major breakout in the direction of the recent up trend. There were hundreds of support bounce (bull flag) and resistance breakout trades on the charts. The SPX closed four points above its Dec. 31 close and the RUT closed 3 points above its year end close as they joined the Nasdaq in being positive for 2009. I’ll have more to comment on this tomorrow. If you read and understood the guidance we gave you in Friday’s post you were prepared for what happened on today and were in a position to take action. We wrote: “The trend is still up. Look for a continuation of the one to two days thrust and one to two days pause (pullback), which has been the pattern of the past 8 weeks, to continue until it doesn’t. “Short term traders have a Yellow Alert because Thursday was the high day. In the SPX, Nasdaq and DJIA and they did have lower highs and lower lows but higher closes. Only the RUT had a lower close and it was weak confirmation of Thursday’s shooting star like candle. “Stay mentally flexible because Thursday was a high day and a reversal day. A portion of Thursday and Friday can be viewed as pause or pullback days. “Intermediate term traders the 8 week intermediate term trend is still up. Use higher lows as setups and entry opportunities. As always, trade according to your trading rules.” Index Commentary The DJIA broke out of horizontal resistance at 8,405 with a large white candle…three month chart target 10,340…volume was average at 354 million shares and higher than the previous five days…closed above its 20, 30 and 50 DMA. The SPX broke out of horizontal resistance of 875 with a large white candle…3 month chart target of 1,075…closed above its 20, 30 and 50 DMA. The Nasdaq closed above it 200 DMA with a large white candle…closed within two points of short term chart price target of 1,765…3 month chart target of 2,65…closed above its 20, 30 and 50 DMA. The RUT formed a large white candle…approached the January 519 horizontal resistance level…3 month chart target 606…closed above its 20, 30 and 50 DMA On Monday 14 out of 15 At the Open stocks rose significantly… At the Open on Tuesday SPY – large white candle +3.40% SCHN – large white candle +5.11% KOL – large white candle +12.26% MEE – large white candle +21.14% SNDA – spinning top at resistance +4.44 ADBE – spinning top/hammer -2.80% on analyst downgrade EBAY –white spinning top in horizontal flag +1.39% SHLD – large white candle +4.28% ISRG – white candle +4.17% DHR – large white candle at 200 DMA +3.63% DE – white candle breakout of 200 DMA +5.13% RIMM – spinning top +2.77% SPG – large white candle +9.31% QLD – white candle +4.23% FAS – large white candle +26.85% Stocks to Watch on Tuesday Leading Stocks Holding Above 30 DMA BIDU, CLB, ICE, ALGT, DLB, PWR, VPRT, AMZN, USD, AAPL, CTSH, AXYS, BAP, CAM, GMCR, JCOM, JOSB, ATW, GR, SYNA, EBAY, GES, SNA, ORCL, WRC, HDB, PCP, UYG, FSLR, WCG, RIMM, X, BYI, CBST, HLF, AMX, MHS, WAB, FAS, AFAM, JW.A, K, RBN, ESRX, PCLN, URE, VAR, PCR, PPD, HANS, SWN, FLS, SNHY, GXDX, TDG, NIHD, RCI, STRA, ACN, AMED, EZPW, JOYG, MON, MUR, PSYS, SPWRA, PETS, NTLS Moving Above 30 DMA = 5 CHL, DECK, DLTR, MOS, NFLX Moving Below 30 DMA = 1 GME Staying Below 30 DMA CPLA, GILD, GPRO, JEC, MCD, BDX, CBST, MYGN, DV, SLGN, BIIB, WMT, BKC, APEI, BLUD, ESI Intermediate Term Market Trend: Neutral Short Term Market Trend: Up

Futures Pointing to a Higher Open...

1:45 pm ET - Financial and Basic Material stocks are on the move...XLF, XLB, UYG, FAS, SCHN, RF, ZION, BAC, WFC...the financial sector has been in a consolidation pattern for three weeks...today we are seeing a support bounce in many stocks and XLF is nearing a horizontal breakout... 10:06 am ET - after a moderate open, futures have really accelerated to the up side...in addition to our AT the Open on Monday stocks which mostly have started the week strong, here are a couple more stocks I see in my lists doing well...one is an open positions in our Model Portfolio... (click image to enlarge) BMO - ES +4 and NQ +9 futures are trading moderately higher pointing to a higher open. At the Open on Monday SPY – white spinning top SCHN – white candle after horizontal breakout KOL – large white candle horizontal breakout MEE – large white candle post earnings SNDA – large white candle bounce off 20 DMA ADBE – spinning top at 200 DMA EBAY –white candle in pennant SHLD – black candle above 200 DMA ISRG – doji DHR – white spinning top DE – white candle at 200 DMA RIMM – white candle horizontal breakout SPG – black candle pull back after earnings QLD – white spinning top FAS – black spinning top

Trading Futures?

I am interested in determining, how many blog readers are already trading ES (S&P) or NQ (NASDAQ) futures or are interested in learning to trade these index futures on an intraday basis? If you are trading or have an interest in trading index futures please send me an email at: chartsignals@yahoo.com Thank you!