Futures Point to a Lower Open...

1:55 pm ET - The SPX near even and ES and NQ futures positive for the day...bounce off of S1 really works? 12:40 pm ET - Thursday in my stocks trading webcast I entered a real time virtual trade on GOOG at 7:44:33 am MT shortly after the open at 431.30. I was asked the question aren't you concerned entering this trade with the market have been up so many days in a row? My response was a swift and adamant, "No." I explained the reason why which essentially is unless your trading system has a specific rule to not take buy signals when the market is up so many days in a row a trader should take every buy signal as long as it meets the system rules. The stop was placed at 422.50 or a stop risk 8.80 per share. The Target 1 on the trade was the recent high of 445.75 and the Target 2 was the measuring distance of 468. GOOG closed at 437.34 or a gain of 6.04 per share. Today GOOG has risen to Target one at 445.75, another 8.41, for a total gain of 14.45. I am raising the stop to breakeven plus $1 or 432.30. The thought pattern behind the question I was asked yesterday is very detrimental to a trader's wealth. I will discuss this more in my Friday end of day post. 11:25 am ET - There appears to be some very positive developments this morning...Yesterday after trading for 11 1/2 weeks with a resistance level in the 930 to 955 range the SPX broke out of that resistance with its largest range up day since May 4. What does that mean? The SPX broke through with power...buying power. On a candlestick chart we call it a large white candle. The mid-section of a large white candle is a short term support level. We call it Support 1 or S1 for short. The open or the bottom of the body is Support 2 or S2 and the low of the day or the bottom of the lower shadow is Support 3 or S3. (click image to enlarge) Whenever the market makes a big move it is likely that it will take a rest shortly after. That rest can be simply a pause or pull back. The depth of the pull back gives us a sense of the strength or conviction of the buyers. If the pull back is modest to the S1 or above the buyers are willing to buy at higher prices. The higher the prices that buyers are willing to pay, the more convinced they are that prices are going higher. This should increase a trader's confidence in a the current up trend and the likelihood that the current move will continue to the next resistance level. Not withstanding the negative reaction to Thursday's earnings from MSFT, AMZN and BRCM, the SPX has been trading above Thursday's S1 all morning. This increases the probability that Thursday's breakout is a successful breakout, BIDU and BDK are making strong moves up after their earnings and AAPL, GOOG and ISRG are holding yesterday's gains and moving higher. BMO – ES -1.75 and NQ -7 futures are lower in pre-market trading pointing to a lower open. This is largely driven by MSFT, AMZN and BRCM which reported earnings after the close on Thursday and gapped lower. BIDU +4 which was lower in after hours is trading higher in pre-market trading. Other Nasdaq 100 stocks like AAPL, ISRG and QCOM are trading slightly lower in pre-market trading. DECK, BNI, AXP are also lower while MCD is slightly higher in pre-market trading. BDK which holds their conference call shortly after the open is higher in pre-market trading. Key Earnings Friday: BDK Look at these Charts… (click image to enlarge) (click image to enlarge) At the Open on Friday SPY – QQQQ – AMZN – MSFT – BRCM – BIDU – FUQI – GMCR – SHLD – BDK – AXP – BNI – DECK – FAS – FAZ – JOYG – STT – X – ADBE – AAPL – PCLN – GES – NFLX – PWRD – ALGT – JOSB – PRU – ARO – CAT – WFC – ISRG – QCOM –