Bullish Engulfing Tuesday...Trend Wins Again...

DJIA + 196.17, +2.27% SP500 + 23.33, +2.63% NASDAQ Comp. + 58.42, +3.45% Russell 2000 + 22.69, +4.75% Exchange NYSE NASD Advancing 2,508 2,124 Declining 476 641 Oil $62.45 +$0.78 Gold $953.30 -$5.60 SOX 259.82 +9.36 VIX 30.62 -2.01 The VIX moved down and did confirm the move up in the SPX on Tuesday. Strongest Sectors: XLI +3.64%...XLY +3.37%...XLF +3.26% Weakest Sectors: XLV +0.91%...XLP +1.26%...XLE +2.12% All nine sectors moved higher on Tuesday. Industrials, Consumer Discretionary, Financials and Utilities were stronger than the SPX +2.63%. Financial stocks stronger than XLF +3.26%: ZION, BK, USB, JPM, SPG, IVZ, AFL, NTRS, WFC, PNC, AXP, TROW, SCHW, GS, CME, STT, CB and ETFs UYG and FAS. Leading tech stocks stronger than XLK +2.60% include: AAPL, ADBE, QCOM, GLW, EMC, T, CSCO, AMT, IBM, MSFT, INTC, VZ, ADP, GOOG, TXN and DELL. Sector Watch Up Trending: Horizontal Breakout: XLB, XLK Sideways: XLE, XLV, XLF, XLP, XLI, XLY Down Trending: XLU SPX Key resistance levels: 902 = Weekly R1 924 = horizontal 935 = 200 DMA Key support levels: 899 = Tuesday’s S1 891 = 38.2% Fib level 875 = horizontal 866 = 61.8% Fib level The markets opened after Memorial Day with strong buying. DJIA volume jumped from 244 million on Friday to 314 million on Tuesday. Many stocks and indices formed bullish engulfing or large white candles today. The SPX broke through the 902 resistance today leaving the 925 to 935 area as the next major resistance area. This has been the resistance area of the past three weeks. On Friday in the Weekly Wrap webcast Dave gave 40 to 45 points to the upside as the probable range for this week if the market bounced at support. The SPX achieved half of that today Gold prices moved down on Tuesday. Gold stocks GDX, GLD and AEM moved lower while NEM, GOLD and GG moved higher. Steel stocks SCHN, AKS, ATI, X and STLD rose more than the broad market on Tuesday. While we know that technical analysis is based on probabilities and not certainties, you may have noticed that even last week as the market was pulling back that we continued to list the three months price target to the upside on all four indices. We believe in staying focused on the higher probability until the chart signals tell us the high probabilities are failing. Index Commentary The DJIA formed a bullish engulfing pattern confirming Friday’s inverted hammer … three month chart target 10,340…volume was 314 million shares…closed above its 20, 30 and 50 DMA. The SPX formed a large white candle outside day confirming Friday’s inverted hammer…3 month chart target of 1,075…closed above its 20, 30 and 50 DMA. The Nasdaq formed a bullish engulfing pattern…3 month chart target of 2,065…closed above its 20, 30 50 and 200 DMA. The RUT formed a bullish engulfing pattern….3 month chart target 606…closed above its 20, 30 and 50 DMA At the Open on Tuesday SPY – bullish engulfing KOL – bullish engulfing SHLD – piercing line ADBE – large white candle new high close STLD – large white candle new high close CTV – shooting star EBAY – white candle EL – white candle confirms bullish harami JOYG – large white candle new high close USD – bullish engulfing JNPR – bullish engulfing SCHN – bullish engulfing STT – bullish engulfing FAS – bullish engulfing URE – bullish engulfing ZION – large white candle support bounce OSG – spinning top LEAP – bullish engulfing new high close WAB – piercing line 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, STRA, ACN, JOYG, MUR, PSYS, CHL, MOS, DV, AXYS, BIIB, BYI, CPLA, SPWRA, SYNA, X, MCD, BDX, APEI, CBST Moving Above 30 DMA = 15 AAPL, AFAM, DLB, ESI, ESRX, FAS, GES, HANS, JOSB, ORCL, RBN, SNA, URE, USD, WRC Moving Below 30 DMA = 1 MON Staying Below 30 DMA WAB, NTLS, AMED, PETS, SNHY, WMT, AMZN, EZPW, GXDX, JW.A, JEC, PWR, DLTR, DECK, ALGT, JCOM, NFLX, GME, GILD, GPRO, MYGN, SLGN, BKC, BLUD Intermediate Term Market Trend: Neutral Short Term Market Trend: Up