SPX, Highest Close Since November 5, 2008...

DJIA + 104.21, +1.19% SP500 + 10.75, +1.14% NASDAQ Comp. + 22.68, +1.20% Russell 2000 + 7.74, +1.49% Exchange NYSE NASD Advancing 2,198 1,842 Declining 580 864 Oil $63.98 +$0.42 Gold $948.80 +$26.00 SOX 294.13 +3.64 VIX 24.40 +0.06 The VIX moved up and did NOT confirm the move up in the SPX on Monday. Essentially, the VIX was unchanged. Strongest Sectors: XLB +2.14%...XLY +2.10%...XLI +2.01% Weakest Sectors: XLV +0.23%...XLP +0.29%...XLU +0.75% All nine sectors moved higher on Monday. Materials, Consumer Discretionary, Industrials, and Energy were stronger than the SPX +1.14%. Financial stocks stronger than XLF +0.82%: ZION, SPG, AFL, IVZ, TROW, AXP, WFC, GS, USB, PRU, MET, ICE, CME, STT, PNC, MS and ETFs UYG and FAS. Tech stocks stronger than XLK +1.46%: CSCO, TXN, DELL, T, EMC, SYMC, GLW, EBAY, HPQ, YHOO, MSFT and AMAT. Sector Watch Up Trending: Horizontal Breakout: XLB, XLK, XLY Sideways: XLE, XLV, XLF, XLP, XLI, XLU Down Trending: SPX Key resistance levels: 944 – 956 = January/June horizontal 962 = 161.8% Fib extension Key support levels: 930 = horizontal 920 = horizontal end of May high 912 = 50 DMA 878 = 200 DMA 870 -875 = horizontal Key Earnings Tuesday: AAPL, CAT, GENZ, MRK, MS, BTU, YHOO, WFC Wednesday: F, GR, ISRG, MOS, UNP Thursday: AMZN, BIDU, AXP, BNI, DECK, MSFT, MCD, NFLX, POT Friday: BDK, WYNN The SPX spent a second day in the 940 – 955 horizontal resistance area forming a new high close which is the highest closing price since November 5, 2008. Technically speaking, a pullback at resistance is the most probable outcome at these price levels. However, there is a potential catalyst this week that was not present in May or June when the SPX was at this price level. What is the potential catalyst? Earnings… Remember one of the core tenets of technical analysis is: Market Action Discounts Everything. The market will discount either up or down the earnings information as it becomes known. Until then we must remain prepared to trade in either direction. Hundreds of companies will report earnings. After strong reports last week from GS, INTC and IBM, key stocks listed above report this week. Perhaps most pivotal is AAPL which will report after the close tomorrow. Some unexpected positive guidance for the third and fourth quarter could send AAPL and Nasdaq stocks higher and the SPX through resistance on Wednesday. Failure to have a positive surprise could cause AAPL to sell off like GOOG did on Friday and that could be the catalyst for a pullback from resistance. AAPL has had a strong move into its earnings release and could possibly deliver the “buy the rumor, sell the news” adage. Stocks to Watch on Tuesday Leading Stocks Holding Above 30 DMA PWRD, K, CPLA, ACN, PSYS, MHS, SLGN, AMED, ALGT, PPD, AMX, NFLX, BYI, CTSH, AAPL, BDX, DLTR, ESRX, PETS, USD, BIDU, FUQI, GMCR, GR, HLF JOSB, VPRT, AMZN, ATW, BAP, CAM, DECK, DLB, EBAY, FAS, GES, GILD, JCOM, NIHD, ORCL, PCLN, RCI, SNHY, TDG, TRLG, UYG, WRC, ESI, MOS, MUR, WCG, SNA, X, CBST, CHL, SWN, WAB, MCD Moving Above 30 DMA = 5 BLUD, CLB, HDB, PCP, URE Moving Below 30 DMA = 2 DV, STRA Staying Below 30 DMA AFAM, FAZ, BKC, APEI, NTLS, SYNA, GXDX, ICE, JW.A, JOYG, MYGN, PWR, GPRO, JEC, RBN, BIIB, FLS, VAR, RIMM, SPWRA, MON, EZPW, FSLR, WMT, HANS, GME Intermediate Term Market Trend: Neutral Short Term Market Trend: Up