SPX Closes at New High Close...Stays Above S1...

DJIA + 23.95, +0.26% SP500 + 2.97, +0.30% NASDAQ Comp. - 7.64, -0.95% Russell 2000 + 2.61, +0.48% Exchange NYSE NASD Advancing 1,904 1,468 Declining 1,096 1,193 Oil $68.05 +$0.89 (Sep. contract) Gold $953.10 -$1.70 SOX 300.88 -3.84 VIX 23.09 -0.34 The VIX moved down and did confirm the move up in the SPX on Friday. This is the lowest close in the VIX since September 8, 2008. Strongest Sectors: XLV +1.75%...XLU +1.58%...XLE +1.05% Weakest Sectors: XLK -0.60%...XLF -0.56%...XLY -0.08% Six of nine sectors moved higher on Thursday. Healthcare, Utilities, Energy, Consumer Staples and Materials were stronger than the SPX +0.30%. Financial stocks stronger than XLF -0.56%:CB, MET, PRU, USB, ALL, TRV, AFL, RF, STT, AXP, MMC, GS, ICE and ETFs UYG and FAS. Tech stocks stronger than XLK -0.60%:ADP, GOOG, AAPL, GLW, TXN, ADBE, VZ, YHOO, ORCL, IBM, DELL, HPQ, CSCO, QCOM, T, MA, EMC and SYMC. Sector Watch Up Trending: XLK Horizontal Breakout: XLB, XLY Sideways: XLE, XLV, XLF, XLP, XLI, XLU Down Trending: SPX Key resistance levels: 980 = Thursday’s high 1,007 = November horizontal Key support levels: 962 = 161.8% Fib extension 944 – 956 = old January/June/July resistancel 930 = horizontal 920 = horizontal end of May high 917 = 50 DMA How Did You Do This Week? In last Friday’s post, July 17, (See post here: http://chartsignals.blogspot.com/2009/07/markets-mixed-on-options-expiration.html) I wrote: “So with the SPX and broad indices at resistance what are the catalysts for the next week? Earnings...yes, we are still in the midst of earnings season and hundreds of companies report next week. Key companies reporting include: 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 earning reports and managements comments about the third quarter and the second half of the year will be central to the Street's action next week. The strength of the earnings and comments can either drive this market through resistance or turn the market down from resistance. The SPX, Nasdaq and the RUT all formed an inside day on Friday with Thursday the high day. Watch Thursday's S1 level and for potential confirmation of what was essentially a bearish harami on Friday. We are on Yellow Alert on Monday Technically the chart suggests this market is more likely to move down than up. However one of the core tenets of technical analysis states: Market Action Discounts Everything. New information will be coming into the market next week which could drive the market higher or lower. No one can see the future so you must be ready for the break out to the upside or the selloff from resistance.” My questions today are: How did you do? Were you prepared? Were you aware and mentally flexible enough to trade when the breakout happened? If not, it is good to be aware. Dave's Insight: "Only when you are aware of your weaknesses as a trader, can you begin to consciously make the necessary changes to turn your weaknesses into strengths." Each of the broad indices stayed above the S1 level of Thursday's large white candle. This confirms the up trend. When a breakout of resistance occurs the most likely outcome is that price will rise to the next resistance level. In the case of SPX this is the 1,000 to 1,007 area. Friday was a pause day that absorbed the sell off in MSFT, AMZN and BRCM without breaking S1 again a positive sign. If the SPX rises to the 1,007 area, price will either bounce down or breakout. We will look to Monday's action to see if the short term up trend continues. BIDU and FSLR continued to move higher as GOOG continued its support bounce that started on Thursday. (click image to enlarge) Here is a list at some of the earnings that will have an impact on price action beginning on Monday. Earnings of Interest A few major companies will report earnings this week with a large number of second tier companies. Monday: AMED, AMGN, JEC, TEVA, VLO Tuesday: MEE, MHS, PNRA, X, USNA, WCG Wednesday: AFL, AEM, AKAM, CERN, ESRX, XOM, DAVE, FISV, GMR, MA, OII, STRA, V Thursday: BDX, DLB, GPRO, MET, VPRT, DIS, WYNN Friday: CVX, DRYS 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, BDX, DLTR, ESRX, PETS, USD, BIDU, FUQI, GMCR, HLF JOSB, 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, BLUD, CLB, HDB, JOYG, PCP, RIMM, URE, WMT, DV, EZPW, GME, MON, RBN, STRA, AFAM, BIIB, CHL, CLB, FLS, JEC, PWR, VAR, VPRT Moving Above 30 DMA = 4 FSLR, JW.A, GR, SPWRA Moving Below 30 DMA = 2 HANS, HDB Staying Below 30 DMA MCD, FAZ, BKC, APEI, NTLS, SYNA, GXDX, ICE, MYGN, GPRO Intermediate Term Market Trend: Neutral Short Term Market Trend: Up