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Semiconductor Stocks Lead Nasdaq Higher...
Another range bound day, the fifth this week...Gap up on good news from DELL, MRVL and INTC and fade to the low and then rally to the middle of the range...that was Friday in a nutshell...I'll be back with complete details and a look into next week...
DJIA - 36.43, -0.38%
SP500 - 2.05, -0.20%
NASDAQ Comp. + 1.04, +0.05%
Russell 2000 - 3.91, -0.67%
Exchange NYSE NASD
Advancing 1,514 956
Declining 1,494 1,750
Oil $72.74 +$0.25
Gold $957.00 +$11.50
SOX 311.76 +7.42
VIX 24.76 +0.08
The VIX moved up and did confirm the move down in the SPX on Friday. For the fifth day in a row the SPX and VIX were near unchanged. The SOX confirmed the move up in the Nasdaq.
Strongest Sectors: XLB +0.63%...XLK +0.35%...XLF +0.14%
Weakest Sectors: XLV -0.73%...XLI -0.55%...XLP -0.40%
Four of nine sectors moved higher on Thursday. Materials, Technology, Financials and Consumer Discretionary were stronger than the SPX -0.20%.
Financial stocks stronger than XLF +0.14%: ZION, C, CME, ICE, PRU, KEY, PNC, SPG, AOC, IVZ, RF, TRV, AXP, USB, CB, BAC, TROW, ALL, MMC and ETFs UYG and FAS.
Tech stocks stronger than XLK +0.35%: INTC, TXN, DELL, EMC, CSCO and AAPL.
Sector Watch
Up Trending: XLK, XLB, XLY
Horizontal Breakout: XLV
Sideways: XLE, XLF, XLP, XLI, XLU
Down Trending:
SPX
Key resistance levels:
1,025 = 950 Breakout Chart target
1,044 = October horizontal
1,075 = 875 Breakout Chart target
Key support levels:
1,017 = Friday’s S1 level
1,007 = Nov horizontal resistance
992 - 996 = recent support low
980 = last broken resistance now support
962 = July 23 S1, 30 DMA, 38.2% Fib extension
944 – 956 = old January/June/July resistance
Semiconductors ruled the day on Friday as DELL earnings beat estimates, MRVL earnings beat estimates also on Thursday and INTC raised Q3 expectations. Semiconductor related stocks like MRVL, INTC, BRCM, MXIM, XLNX, ALTR and MCHP were Nasdaq leaders.
The SOX gained 2.44% and broke out of horizontal resistance while make a new high close. The only disappointment is the SOX pulled back from 316 to close at 311. This is its highest level since September 29, 2008 meaning the SOX is continuing to make higher highs and higher lows in its 9 month up trend. As you can see in the chart the SOX can make a good pull back while keeping its multi-month trend going higher.
(click image to enlarge)
You can see the price and volume increase in key semi stocks and etf INTC, MRVL, SMH and XLNX.
(click image to enlarge)
The SPX was range bound all week long between 1,017 and 1,039 and produced a weekly rang of 23.27 points. This looks very much like the first week of June and the first week of August. Many are expecting trading to be similar next week ahead of the Labor Day weekend.
One interesting aspect this past week was the daily closing price on the SPX; they were 1,025, 1,028, 1,028, 1,030 and 1,028. These amazingly tight closing prices raise the question, Is 1,028 support or resistance?
As technical traders we must be prepared for either outcome, but this looks very much like a horizontal bull flag.
(click image to enlarge)
The August 21 S1 level at 1,017 and S2 level at 1,009 still remain the important short term support levels and the 1,035 area as resistance.
DJIA volume rose 41 million shares to 205 million shares on Friday.
Guidance: The intermediate term trend is still up and the five day trend is neutral. The SPX is showing five spinning tops in a row all of which are staying above the August 21 S1 level and continues to look like a horizontal bull flag. Even though the SPX moved lower from its highest intra-day high this year on Friday, the NYSE advancing and declining issues were fairly balanced continuing to indicate that this is not yet an aggressive sell off.
Stay with trades that continue to move in the direction of the trend. 1,025 is still the key trading level. As always follow your rules.
Flag Setups and Bounces in Progress: BDK, JEC, WLT, JCI, WYNN, AGCO, SPG, JOYG, X, DOW
Breakout in Progress: WHR, AXP, BAC, JCG, HOLX, TXN, MRVL, INTC, XLNX
Breakout Setup: GRMN, FWLT, FLS, AGU, DD, ZION
Breakout Setups that pulled back on Friday: DE, MA, CAT, STT
Key stocks AA, AXP, DD, INTC and TRV were strong on Friday.
AAPL +0.60
QCOM -0.03
GOOG -1.31
BIDU -0.57
NDX 100 stocks stronger than the NDX included NVDA, MRVL, NIHD,INTC, STLD, STX, BRCM, MXIM, XLNX, ALTR, EXPE, LRCX, DELL VRSN, MCHP, LOGI, NTAP, and FWLT .
Stocks to Watch on Monday
Leading Stocks
Holding Above 30 DMA
PWRD, CPLA, PSYS, MHS, AMED, AMX, BYI, CTSH, AAPL, PETS, USD, FUQI, JOSB, BAP, CAM, EBAY, FAS, PCLN, SNHY, TDG, UYG, WRC, ESI, WCG, SNA, X, CBST, WAB, BLUD, CLB, PCP, URE, WMT, EZPW, RBN, FLS, VAR, BKC, DV, GR, CLB, HANS, JEC, BIIB, GES, HDB, ORCL, STRA, MON, MUR, ESRX, GXDX, JW.A, BDX, DLTR, NTLS, MCD, TRLG, MYGN
Moving Above 30 DMA = 4
ICE, PWR, NIHD, RCI
Moving Below 30 DMA = 6
AFAM, APEI, DECK, GPRO, JOYG, SLGN
Staying Below 30 DMA
ATW, BIDU, K, HLF, MOS, NFLX, RIMM, SWN, CAN, VPRT, CHL, DLB, GME, JCOM, SPWRA, AMZN, GMCR, PPD, ALGT, GILD, FSLR, SYNA, FAZ
Intermediate Term Market Trend: SPX, DJIA, RUT = Neutral, Nasdaq = Up
Short Term Market Trend: Neutral
You can see the price and volume increase in key semi stocks and etf INTC, MRVL, SMH and XLNX.
(click image to enlarge)
The SPX was range bound all week long between 1,017 and 1,039 and produced a weekly rang of 23.27 points. This looks very much like the first week of June and the first week of August. Many are expecting trading to be similar next week ahead of the Labor Day weekend.
One interesting aspect this past week was the daily closing price on the SPX; they were 1,025, 1,028, 1,028, 1,030 and 1,028. These amazingly tight closing prices raise the question, Is 1,028 support or resistance?
As technical traders we must be prepared for either outcome, but this looks very much like a horizontal bull flag.
(click image to enlarge)
The August 21 S1 level at 1,017 and S2 level at 1,009 still remain the important short term support levels and the 1,035 area as resistance.
DJIA volume rose 41 million shares to 205 million shares on Friday.
Guidance: The intermediate term trend is still up and the five day trend is neutral. The SPX is showing five spinning tops in a row all of which are staying above the August 21 S1 level and continues to look like a horizontal bull flag. Even though the SPX moved lower from its highest intra-day high this year on Friday, the NYSE advancing and declining issues were fairly balanced continuing to indicate that this is not yet an aggressive sell off.
Stay with trades that continue to move in the direction of the trend. 1,025 is still the key trading level. As always follow your rules.
Flag Setups and Bounces in Progress: BDK, JEC, WLT, JCI, WYNN, AGCO, SPG, JOYG, X, DOW
Breakout in Progress: WHR, AXP, BAC, JCG, HOLX, TXN, MRVL, INTC, XLNX
Breakout Setup: GRMN, FWLT, FLS, AGU, DD, ZION
Breakout Setups that pulled back on Friday: DE, MA, CAT, STT
Key stocks AA, AXP, DD, INTC and TRV were strong on Friday.
AAPL +0.60
QCOM -0.03
GOOG -1.31
BIDU -0.57
NDX 100 stocks stronger than the NDX included NVDA, MRVL, NIHD,INTC, STLD, STX, BRCM, MXIM, XLNX, ALTR, EXPE, LRCX, DELL VRSN, MCHP, LOGI, NTAP, and FWLT .
Stocks to Watch on Monday
Leading Stocks
Holding Above 30 DMA
PWRD, CPLA, PSYS, MHS, AMED, AMX, BYI, CTSH, AAPL, PETS, USD, FUQI, JOSB, BAP, CAM, EBAY, FAS, PCLN, SNHY, TDG, UYG, WRC, ESI, WCG, SNA, X, CBST, WAB, BLUD, CLB, PCP, URE, WMT, EZPW, RBN, FLS, VAR, BKC, DV, GR, CLB, HANS, JEC, BIIB, GES, HDB, ORCL, STRA, MON, MUR, ESRX, GXDX, JW.A, BDX, DLTR, NTLS, MCD, TRLG, MYGN
Moving Above 30 DMA = 4
ICE, PWR, NIHD, RCI
Moving Below 30 DMA = 6
AFAM, APEI, DECK, GPRO, JOYG, SLGN
Staying Below 30 DMA
ATW, BIDU, K, HLF, MOS, NFLX, RIMM, SWN, CAN, VPRT, CHL, DLB, GME, JCOM, SPWRA, AMZN, GMCR, PPD, ALGT, GILD, FSLR, SYNA, FAZ
Intermediate Term Market Trend: SPX, DJIA, RUT = Neutral, Nasdaq = Up
Short Term Market Trend: Neutral
7 comments:
Nice Market Wrap-
Thanks Dave!
Laney
Dave,
I have come value your unemotional approach to chart analysis. On the first day of The IF workshop I could not understand why so much emphasis was being put on the beginning psychology of the new investor. I see now, where once I was blind. I am gaining confidence as a laymen trader, but my emotions are still very much influenced by outside sources i.e.: I had to stop watching CNBC during the day because of the emotional rollercoaster.
Fear motivates people, not always rationally though. I don’t have enough experience to form my own opinions and I am very much fumbling around in the dark most of the time. Being guided by distant voices, that I can’t distinguish if they are bringing me to safety or pushing me to danger. Except for one, a calming voice that helps me to realize up, down, or sideways it’s going to be ok. That’s you Dave. So I submit to you once more, for a little guidance.
I've been hearing of potential doom and gloom. That our fragile markets are "oversold" and analysis such as Doug Kass (he allegedly called last Sept crash and the March bottom), call for a "W" formation on our markets. I realize that no one what the markets will do, but some know better than others what they will likely do based on probability. These prophets of the markets, can read the technical evidence, has an understanding of not only the retail investor physcology, but that of the institutions investor, and can couple that with current political and broad range economic conditions, to forecast a few likely scenarios.
So in a roundabout way that’s my question? Given the current conditions and market clues, barring some "Black Swan" event, what are some likely scenarios that I should be aware of, so that I might have a "trading plan" in place to capitalize, or protect my positions from?
Humbly & a devoted student
Alex
Alex,
Talk is cheap. Actions speak louder than words. Market Actions Discounts Everything. So what are the trend makers, institutions, doing? Net, buying. What trend are they creating? Up. When they become net sellers the market will break support and begin to make lower highs and lower lows. When your tenant says the check is in the mail and you never receive it, what does that mean? Talk is cheap. Actions speak louder than words. This is why I focus on the Chart Signals, it is what the institutions are doing. Actions speak louder than words.
Stay focused on the trend. Don't get distracted by the balderdash.
I hope this helps.
Dave
Dave, I cannot tell you how much I appreciate your teaching and your blog. Especially that last comment:
"Stay focused on the trend. Don't get distracted by the balderdash."
That was one of my first BGOs, way back when!
Thanks for all you do,
John
David,
I agree with what you told Alex;
'I fatti Contano Piu Delle Parole!'
Translation in english; Actions speak louder than words- So true....
About the SPX..
I think that the 1025 resistance level has now raised to 1028 last week.
My reason for this is because the SPX closed 3 of the 5 days at the 1028 level.
Price fluctuations during the day last week raised it above but it returned to 1028 (or close to it).
It will be interesting to see what this week brings..
Laney
Excellent post at week end and great advice here Dave. Really appreciate your "hammering" us with the basics and focus neede to become Great Traders!
One question - Do you reccomend maintaining positions both long and short in different equities at all times (in our paper accounts of course), the balance dictated by the overall trend? (Maybe 8 long and 2 shrt now as an example?)
Thanks again for all that you do!
Bruce
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