A Piercing Line Support Bounce

DJIA + 109.44, +1.38% SP500 + 10.56, +1.25% NASDAQ Comp. + 1.08, +0.07% Russell 2000 + 7.91, +1.75% Exchange NYSE NASD Advancing 2,578 1,727 Declining 1,113 1,018 Oil $49.25 -$0.16 Gold $893.00 +$1.80 SOX 246.23 -3.77 VIX 36.17 -1.50 The VIX moved down and did confirm the move up in the SPX on Wednesday. What is going on with the VIX is significant. Take a moment to sudy the old resistance level from early 2008 that has been an area of support on the VIX chart below. (click image to enlarge) Strongest Sectors: XLF +4.83%...XLB +2.36%...XLP +1.78% Weakest Sectors: XLK -0.30%...XLE +0.13%...XLY +0.33% Eight of nine Sectors moved higher on Wednesday. The Financial Sector reversed from being the weakest sector on Tuesday to the strongest on Wednesday. XLF regained most of Tuesday’s -6.59% pullback, gaining +4.83%. Financial stocks stronger than +4.83% include: SPG, AXP, SCHW, USB, WFC, PNC, ZION, MET, ALL, JPM, RF, PRU, TRV, NTRS, GS, AFL, IVZ and ETF’s UYG and FAS. The Tech Sector XLK was the only losing sector off -0.30% This was primarily fueled by analysts reaction to INTC guidance which apparently was specific enough for some analysts. INTC finished down along with bellwether tech stocks AMAT, MSFT, DELL and CSCO. Leading tech stocks stronger than XLK at -0.30%: AMT, GOOG, SYMC, HPW, VZ, GLW, T, QCOM and ADP. Sector Watch Up Trending: Sideways: XLE, XLY, XLV, XLK, XLB Down Trending: XLF, XLP, XLI, XLU This is an extraordinary rendition by Susan Boyle of I Dreamed a Dream from Les Miserables and a real life example of the seemingly impossible, being possible. It just might inspire you. Click this link: http://www.youtube.com/watch?v=9lp0IWv8QZY If you have any observations after listening, Please Post them in the Comments section. As we wrote Tuesday evening; "The pattern of the past six weeks has ben pause/pullback for two days following a strong move up. Watch to see if this pattern repeats and we see another short lived correction. Remember pullbacks that find support in up trends are potential entry opportunities." If you gave heed to our guidance you were thinking like a master chess player and prepared for the support bounce that took place today. After a weak opening, due in large measure to selling pressure in INTC and other semiconductor stocks stemming from analysts that did not like the level of detail in INTC's second quarter guidance Tuesday after the close, stocks found support about 3 pm ET as indices rallied strong into the close. INTC finished down 39 cents and the SOX index -3.77 for the day. Watch for trend continuation on Thursday. Today was a low day in the SPX, Nasdaq, DJIA and RUT. The SPX, DJIA and RUT each formed a Piercing Line Pattern. Take a close look at this Piercing Line bouncing off a higher low. (click image to enlarge) Volume on the DJIA was slipped to 413 million shares from 513 million shares on Tuesday. Index Commentary The DJIA formed a white piercing line pattern from an intraday support bounce…closed above its 20, 30 and 50 DMA. The SPX formed a white piercing line pattern…closed above its 20, 30 and 50 DMA. The Nasdaq gapped lower on the open found support and closed above its open forming a white spinning top …closed above its 20, 30 and 50 DMA. The RUT formed a piercing line pattern…closed above its 20, 30 and 50 DMA At the Open on Thursday SPY – bullish engulfing pattern DECK – large black candle bull flag pullback to diagonal support SNDA – large white candle support bounce CTSH – hammer at horizontal support and 200 DMA bounce EBAY – spinning top in bull flag SCHN – white spinning top above horizontal breakout GME – white spinning top support bounce off 200 DMA SHLD – spinning top inside day GS – white candle harami after pullback XRT – hammer in bull flag USD – dragonfly doji at 20 DMA support bounce URE – bullish engulfing support bounce off 50 DMA UYG – piercing line after one day pullback WYNN – white spinning top inside day at horizontal resistance CELG – black spinning top, potential 2nd candle in potential morning star pattern LEAP – morning star pattern support bounce off 200 DMA FAZ – large black candle Stocks to Watch on Thursday Leading Stocks Holding Above 30 DMA BIDU, CLB, NFLX, DLTR, ICE, ALGT, DLB, JEC, PWR, VPRT, AMZN, USD, AAPL, CTSH, FLS, JOYG, AXYS, BAP, CAM, GMCR, GPRO, JCOM, JOSB, MUR, WMT, ATW, GR, BIIB, SLGN, SYNA, SNHY, EBAY, GES, SNA, ORCL, WRC, DECK, HDB, PCP, UYG, FSLR, GME, WCG, RIMM, X, BDX, BYI, CBST, EZPW, HLF, MYGN, AMX, MHS, WAB, FAS, AFAM, CHL, JW.A, K, MOS, RBN, ESRX, PCLN, URE, AMED, VAR, PCR, PPD, MON, NIHD, SPWRA Moving Above 30 DMA = 2 CPLA, RCI Moving Below 30 DMA = 4 GILD, NTLS, SWN, MCD Staying Below 30 DMA BKC, HANS, APEI, PETS, TDG, BLUD, DV, ESI, GXDX, STRA, ACN, PSYS Intermediate Term Market Trend: Neutral Short Term Market Trend: Neutral