Markets End Flat, Oil, Gold Rise...

Good afternoon everyone...as you are probably aware I have been in Chicago teaching an AT Workshop to 420 traders...I arrived home late last night and got to spend some of the day relaxing and trading...on balance it was a good day for Financials and Materials stocks...some tech stocks like AAPL, GOOG and BIDU started strong and ended weak. AAPL did close up 60 cents but had been up nearly $2. On the other hand XLF was up 1% and FAS +1.78%. We did a real time virtual trade in BAC in our workshop yesterday, going long the Sep 15 Call at $0.66 at 10:13:11 am ET. BAC +5.87% on Friday led to a 22 cent rise in the Sep 15 call or 33%. The trade was based on a resistance breakout or what I call Dave's B pattern. The SPX and NDX rose but were unable to hold on to gains...a number of second tier earnings stocks fared poorly after releasing earnings, so the sustainability of the rally was just not there today. I'll be back later with my Friday post and some important comments on what you need to focus on for Monday... DJIA + 17.15, +0.19% SP500 + 0.73, +0.07% NASDAQ Comp. - 5.80, -.0.29% Russell 2000 - 1.09, -0.20% Exchange NYSE NASD Advancing 1,738 1,312 Declining 1,137 1,382 Oil $69.45 +$2.51 Gold $953.70 +$18.80 SOX 301.74 +0.23 VIX 25.92 +0.52 The VIX moved up and did NOT confirm the move up in the SPX on Friday. Strongest Sectors: XLB +1.04%...XLF +1.01%...XLE +0.98% Weakest Sectors: XLU -1.26%...XLV -0.78%...XLK -0.35% Four of nine sectors moved higher and XLY was unchanged on Firday. Materials, Financials, Energy and Industrials were stronger than the SPX +0.07%. Financial stocks stronger than XLF +1.01: BAC, KEY, RF, PNC, TRV, STT, ALL, CB, MET and ETFs UYG and FAS. Tech stocks stronger than XLK -0.35%: ADP, HPQ, AMAT, SYMC, GLW, ADBE, AAPL, CSCO, IBM, MA and ORCL. Sector Watch Up Trending: XLK Horizontal Breakout: XLB, XLY Sideways: XLE, XLV, XLF, XLP, XLI, XLU Down Trending: SPX Key resistance levels: 996 = Thursday’s high 1,007 = November horizontal 1,025 = 950 break out price target Key support levels: 980 = last broken resistance now support 962 = 161.8% Fib extension 944 – 956 = old January/June/July resistance During the past three weeks the markets have been in the midst of earnings season. Strong earnings during the week of July 13 from the likes of GS, INTC, IBM and CTAS propeled the SPX from 875 support to 930 to 950 resistance (see charts below). Early in the week of July 20 reports from CAT, AAPL, MMM, EBAY and ISRG pushed the SPX through 950 resistance to the 980 area. Negative reactions to earnings from MSFT, AMZN, BRCM and NFLX kept the SPX in the 980 area on July 24 and during the first half of the week of July 27. On Thursday July 30 continued strength in AAPL, GOOG, CAT, MMM and IBM pushed the SPX to 996 where profita takers again pushed back the index. Negative reaction to earnings from FSLR, SYNA, AKAM and GPRO kept the indices near breakeven on Friday. When an area of resistance is broken price is likely to rise to the next area of resistance. Once at the new resistance price will either break out and go higher of fail to break resistance and pull back. When the SPX broke the 950 resistance area it gave us the 1,000 to 1,007 as the next horizontal resistance area. As of Thursday the SPX came within 11 points of the price target. On Monday look for the SPX to make another move to the 1,000 to 1,007 resistance area. If it breaks then there are two price target areas 1,025 which is the 950 break out target price and 1,075 which is the 875 resistance break out target price. If the SPX fails to break 1,007 look for a pull back to take place. The 950 area is both horizontal support and the 38.2% Fib retracement. At current VIX levels a 38 to 40 point pull back is a realistic weekly trading range in the SPX. Week of July 13 (click image to enlarge) Week of July 20 (click image to enlarge) Week of July 20 (click image to enlarge) Week of July 27 (click image to enlarge) Stocks to Watch on Monday Leading Stocks Holding Above 30 DMA PWRD, K, CPLA, ACN, PSYS, MHS, SLGN, AMED, ALGT, PPD, AMX, NFLX, BYI, CTSH, AAPL, DLTR, ESRX, PETS, USD, BIDU, FUQI, GMCR, HLF JOSB, AMZN, ATW, BAP, CAM, 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, BLUD, CLB, HDB, JOYG, PCP, RIMM, URE, WMT, EZPW, MON, RBN, STRA, AFAM, CHL, FLS, PWR, VAR, SPWRA, BKC, DV, GR, CLB, HANS Moving Above 30 DMA = 3 BIIB, GXDX, JEC Moving Below 30 DMA = 4 FSLR, GPRO, SYNA, VPRT Staying Below 30 DMA BDX, GME, JW.A, DECK, HDB, MCD, FAZ, APEI, NTLS, ICE, MYGN Intermediate Term Market Trend: Neutral Short Term Market Trend: Up