Stocks Give Back Early Gains...Make New Lows...

DJIA 10,067.33 -53.13 -0.52% SP500 1,073.87 -10.66 -0.98% COMPQ 2,147.35 -31.65 -1.45% Russell 2000 602.04 -5.89 -0.97% Exchange NYSE NASD Advancing 957 950 Declining 2,073 1,731 Oil $72.89 -0.61 Gold $1,083.00 -0.60 SOX 316.07 -11.18 VIX 24.62 +0.89 Index Direction Confirmation VIX Up Yes – SPX SOX Down Yes – COMPQ Strongest Sectors: XLP -0.38%…XLU -0.61%...XLY -0.62% Weakest Sectors: XLE -1.80%...XLK -1.74%...XLB -1.60% All nine sectors moved lower on Friday for the second straight. Consumer Staples, Utilities, Consumer Discretionary, Healthcare and Financials were stronger than the SPX -0.98%. Sector Watch Up Trending: XLK, XLB, XLY, XLV, XLP, XLE, XLI, XLU Horizontal Breakout: XLF Sideways: Down Trending: Key Resistance Levels: 1,082 = Nov 9 S1 level 1,087 = Nov 10 Channel low 1,101 = October High 1,105 - 1,113 = November High Key Support Levels 1,075 = 875 Breakout Chart Target 1,050 = Oct 08 High

All week long support bounces failed to follow through and that was the case again on Friday. The SPX closed down, -16.31 points or -1.49%, for the week as did all four of the broad indexes.

Look at these Charts… (click image to enlarge)

The VIX closed down -2.69 points from last Friday but will generally rise during a down move in the SPX. Bottom line this past week is the SPX moves lower but fear doesn’t rise.

We have pointed out that when price breaks support it is likely to fall to the next level of support and that certainly has been the theme for the past week and a half as the SPX closed in its 1,075 support area on Friday. It should now be obvious why one of the key sections we share every day, morning and evening is the SPX Support and Resistance levels. We hope you are using them in your trading decisions. Many stocks failed to rise on good earnings reports and other that did move higher after strong earnings gave back the gains. A few exceptions would include ISRG, ZION, VAR, BA, GILD, PG, NFLX and VPRT. Look at these Charts… (click image to enlarge) Among stocks giving back initial gains include AAPL, AMZN, MSFT, CHKP, XLNX and STT. Look at these Charts… (click image to enlarge)

Disappointing earning reactions include POT, QCOM, SYMC, KLAC and X. Look at these Charts… (click image to enlarge) Guidance: The SPX broke the 1,090 support and fell to the 1,075 area. The short term trend is down. The multi-week trend is sideways. The multi-month trend is up. The SPX and other broad indexes are due for at least a short term support bounce. Lower your stops on the chart on your down trending positions to protect profits if a support bounce occurs. If 1,075 support area breaks, the next level of SPX support is 1,044 - 1,050. Look for down trending setups on stocks that have shown reversal patterns or that are breaking support if the SPX breaks support. Continue to focus on and trade setups on the charts of the stocks you watch and follow your rules. Yes, there are still some up trending stocks. If you have not yet been stopped out of your up trending positions, continue to raise your stops. AAPL -7.22 QCOM -1.29 GOOG -4.34 BIDU -6.14 NDX 100 stocks weaker than the NDX include: STX, MRVL,CERN,CHKP, NVDA, KLAC, FLEX, AAPL, FWLT, MXIM, AMAT, MSFT, QCOM, PCLN, APOL, ERTS, JOYG, DELL, YHOO, CTXS, SYMC, STLD and RIMM. NDX 100 stocks stronger than the NDX include: URBN, WCRX, PCAR, GILD, HSIC, CMCSA, ILMN, BIIB, NWSA, AMGN, LIFE, CTAS, LBTYA, PAYX, ADP, XRAY, GENZ, ORLY, WYNN, CHRW, COST, ADSK, CELG, TEVA, HOLX, PDCO, MICC, INTU and ROST. Stocks to Watch on Monday Leading Stocks Holding Above 30 DMA ALGT, CBST, AMED, GMCR, HANS, VAR, BA, CEDC, ZION, K, FAZ, DLB, WFC, NFLX Moving Above 30 DMA = 1 VPRT Moving Below 30 DMA = 5 CHL, CREE, ESI, MCD, SNDK Staying Below 30 DMA DECK, HANS, JEC, MA, UAUA, BYI, ACN, FLS, TDG, UNG, BUCY, DE, DOW, FAS, HLF, SYNA, UNP, UYG, X, ATW, CAM, HDB, MHS, MOS, PCP, GR, URE, GS, HEAT, WHR, CAT, FCX, BAC, DHR, AGU, FUQI, ICE, IPI, SWN, USO, WLT, WMT, BKC, WAB, USD, PWRD, AMD, AMX, CGA, GES, MON, POT, TSL, BDX, MYGN, WCG, SPG, GME, MELI, PCLN Intermediate Term Market Trend: Neutral = 3 months, Up = 10 month Short Term Market Trend: Down

Futures Point to a Higher Open...Another Bounce at Support?

1:52 pm E% - SPX holds at support...SNDK definitely not one of the those earnings that gap lower and rebounds... 11:20 am ET - rally fades...still positive...watch support... 10:52 am ET - SNDK is trading below its open so just keep watching here for signs that traders who didn't get an increase in guidance are out of the stock...X up 9:46 am ET - X is showing it's first sign of a potential support bounce following its lower than expected earnings on Tuesday...it formed an inside day on Thursday...stock is up +1.08, +2.37% but still under Wednesday and Thursday's daily high... 9:38 am ET - VPRT shares +3.33 after strong earnings and lower next quarter guidance....SNDK up from lower open...CREE moving up from higher open... BMO – ES +8.25 and NQ +17.25 futures are higher in pre-market trading pointing to a higher open. AAPL +1.71, AMZN +3.29, GOOG +3.71 and BIDU +2.16 are higher in pre-market trading. There appears to be a solid rebound in NDX stocks this morning led by major tech companies MSFT and AMZN after reporting earnings after the close on Thursday. SNDK shares are lower in pre-market trading after reporting strong earnings and with guidance that was in line with expectations. View is that shares are off because some investors wanted a raise in guidance. This could be one of those situations that open lower and then go higher when those traders who aren't happy with great results and steady guidance, sell out and leave and everyone else says this is a good report. Keep your eye on this one... Remember that paper trade homework assignment on CREE if it breaks the high of the low day... SPY is up 55 cents in pre-market trading. XLF is up 11 cents in pre-market trading. Continue to watch XLF as a key to a support bounce rally in the SPX as it is doing this morning. Follow your rules in any trading actions today. Be logical. Since the 1,085 support has not broken, we will still be looking for support bounce follow through today. If support breaks look for price to fall to the next support level. SPX Support = 1,087, 1,175 Resistance = 1,103, 1,115 Trading Down: SNDK Trading Up: AMZN, MSFT, MA, UNP, FAS, PCLN, GS, POT, MOST, ALGT, DECK, XLF, STT, ZION, GMCR, DE, X, CREE Look at these Charts… (click image to enlarge) At the Open on Friday SPY – QQQQ – FAS – BA – ALTR – GMCR – ALGT – SHLD – CREE – STX – ZION – STT – NTRS – DECK – ISRG – BAC – INFY – X – AAPL – AKAM – AMZN – NVDA – SNDK – BUCY – PCLN – UAUA – ACN – AGU – DE – DOW – DHR – MA – PCP – POT –

SPX Falls Back to Support...

DJIA 10,120.46 -115.70 -1.13% SP500 1,084.53 -12.97 -1.18% COMPQ 2,179.00 -42.41 -1.91% Russell 2000 607.93 -10.45 -1.69% Exchange NYSE NASD Advancing 807 767 Declining 2,243 1,926 Oil $73.50 -0.17 Gold $1,074.50 -10.00 SOX 327.25 -10.20 VIX 23.73 +0.59 Index Direction Confirmation VIX Up Yes – SPX SOX Down Yes – COMPQ Strongest Sectors: XLP -0.27%…XLF -0.49%...XLY -0.58% Weakest Sectors: XLK -2.87%...XLB -1.80%...XLI -1.14% All nine sectors moved lower on Thursday. Consumer Staples, Financials, Consumer Discretionary, Healthcare Utilities, Energy and Industrials were stronger than the SPX -1.18%. Sector Watch Up Trending: XLK, XLB, XLY, XLV, XLP, XLE, XLI, XLU Horizontal Breakout: XLF Sideways: Down Trending: Key Resistance Levels: 1,101 = October High 1,105 - 1,113 = November High 1,119 = December High 1,025 - 1,133 = 1,075 BO chart target - Sep 08 Low 1,145 = 1,133 BO chart target – Dec 31 Low 1,155 = chart target\ Key Support Levels 1,087 = Nov 10 Channel low 1,082 = Nov 9 S1 level 1,075 = 875 Breakout Chart Target 1,050 = Oct 08 High A sell off that began after the open sent the SPX to a new intra-day low in its current pull back reaching 1,078.46 before rebounding to 1,092. Another sell off during the last 20 minutes sent the SPX to its recent closing low at 1,084.53. Technology was the weakest sector, being led lower by drops after weak guidance from QCOM and MOT. Remember a break of support will likely lead to the index falling to its next support level. Follow your rules. On Thursday NFLX gained +12.07 or +23.68% and GILD +7.58 or +9.47% after reporting earnings. QCOM fell -6.72 or -14.24%, MOT -0.92 or -12.43% and SYMC -1.20 or -6.45% after reporting earnings and lowering guidance. While many stocks have gapped up after reporting earnings over the past two weeks a large number of those gaps have faded. A relatively small number have held their gap so far. This continues to be a weak reaction earnings season even with many companies reporting better than expected earnings. AAPL -8.59 QCOM -6.72 GOOG -7.81 BIDU -6.51 NDX 100 stocks weaker than the NDX include: QCOM, FLEX, SYMC, LRCX, JBHT, KLAC, BRCM, AAPL, INFY, STX, FWLT, NTAP, YHOO, NVDA, CTSH, AMAT, URBN, NIHD and MRVL. NDX 100 stocks stronger than the NDX include: AMZN, CTXS, LIFE, RIMM, CHKP, AMGN, FSLR, PPDI, ROST, SPLS, GENZ, TEVA, RYAAY, COST, BIIB, SRCL, PAYX, LBTYA and ADBE. Stocks to Watch on Friday Leading Stocks Holding Above 30 DMA ALGT, CBST, SNDK, AMED, GMCR, HANS, ESI, VAR, BA, CEDC, ZION, K, MCD, FAZ, CHL, DLB, WFC Moving Above 30 DMA = 1 NFLX Moving Below 30 DMA = 5 DECK, HANS, JEC, MA, UAUA Staying Below 30 DMA BYI, ACN, FLS, TDG, UNG, BUCY, DE, DOW, FAS, HLF, SYNA, UNP, UYG, X, ATW, CAM, HDB, MHS, MOS, PCP, GR, URE, GS, HEAT, WHR, CAT, FCX, BAC, DHR, AGU, FUQI, ICE, IPI, SWN, USO, WLT, WMT, BKC, WAB, USD, PWRD, AMD, AMX, CGA, GES, MON, POT, TSL, BDX, MYGN, WCG, SPG, VPRT, GME, MELI, PCLN Intermediate Term Market Trend: Neutral = 3 month, Up = 10 month Short Term Market Trend: Down

Futures Point SPX Higher Open...NDX Flat...

BMO – ES +3.25 and NQ -2.00 futures are mixed in pre-market trading pointing to a flat open. AAPL -1.43, AMZN +1.95, GOOG +2.43 and BIDU +3.03 are higher in pre-market trading. Thursday’s Earnings to Watch: MMM, AMZN, BDX, CA, CELG, CHKP, DHR, GR, JBHT, KLAC, LIFE, LUV, LMT, MSFT, MXIM, POT, PG, RTN SNDK, TROW, LCC, VPRT BMO MMM +1.50, +1.82% PG +1.19, +1.96% POT -5.40, -4.93% The Euro is down 36 pips in overnight trading. Oil is up 45 cents in electronic trading. XLE is up 26 cents in pre-market trading. SPY is up 41 cents in pre-market trading. XLF is up 12 cents in pre-market trading. Continue to watch XLF as a key to a support bounce rally in the SPX as it is doing this morning. Follow your rules in any trading actions today. Be logical. The SPX did confirm Monday’s bullish harami and Tuesday’s inverted hammer on Wednesday. We will be looking for support bounce follow through today. If support breaks look for price to fall to the next support level. SPX Support = 1,087, 1,175 Resistance = 1,103, 1,115 Trading Down: POT, AAPL Trading Up: AMZN, XLF, STT, ZION, GMCR, DE, X, BUCY Look at these Charts… (click image to enlarge) At the Open on Thursday SPY – QQQQ – FAS – BA – ALTR – GMCR – ALGT – SHLD – CREE – STX – ZION – STT – NTRS – DECK – ISRG – BAC – INFY – X – AAPL – AKAM – AMZN – NVDA – SNDK – BUCY – PCLN – UAUA – ACN – AGU – DE – DOW – DHR – MA – PCP – POT –

Stocks Bounce...Interest Rates Unchanged...

DJIA 10,236.16 +41.87 +0.41% SP500 1,097.50 +5.33 +0.49% COMPQ 2,221.41 +17.68 +0.80% Russell 2000 618.38 +6.22 +1.02% Exchange NYSE NASD Advancing 1,518 1,598 Declining 1,525 1,072 Oil $73.67 -1.04 Gold $1,084.50 -13.90 SOX 337.45 +3.93 VIX 23.14 -1.41 Index - Direction - Confirmation VIX - Down - Yes = SPX SOX - Up - Yes = COMPQ Strongest Sectors: XLF +2.43%…XLK +0.83%...XLV +0.70% Weakest Sectors: XLB -0.86%...XLU -0.66%...XLE -0.39% Six of nine sectors moved higher on Wednesday. Financials, Technology and Healthcare were stronger than the SPX +0.49%. Sector Watch Up Trending: XLK, XLB, XLY, XLV, XLP, XLE, XLI, XLU Horizontal Breakout: XLF Sideways: Down Trending: Key Resistance Levels: 1,101 = October High 1,105 - 1,113 = November High 1,119 = December High 1,025 - 1,133 = 1,075 BO chart target - Sep 08 Low 1,145 = 1,133 BO chart target – Dec 31 Low 1,155 = chart target Key Support Levels 1,087 = Nov 10 Channel low 1,082 = Nov 9 S1 level 1,075 = 875 Breakout Chart Target1,050 = Oct 08 High Stocks stayed in a narrow trading range until after 2:15 pm ET when the Fed announced no change in interest rates. No surprise here but traders like to wait just to make sure there are no negative surprises. Once the Fed business was completed the SPX rose 13 points to close at 1,097.50. This morning we had about 450 traders in an AT webcast where I discussed this concept of traders waiting for the Fed and I asked questions about their trading results. I asked, if they believed if their 2009 trading results were impacted by their feelings and thoughts through out the year? Close to 300 responded in the affirmative. I asked, if they followed rules without regard for those thoughts and feelings did they believe their results would be better? Close to 300 responded again in the positive. A large majority believed that when the market was in an up trend or sideways trend that a bounce at support was more probable than a support break was. And a large number acknowledged that their thoughts and feelings might interfere with entering trades near support. After this series of questions and responses I encouraged the group to take a real time virtual trade based on an objective entry near support without regard for those thoughts and feelings. By doing so they could begin a new action based on what technical analysis suggested was probable rather than those thoughts and feelings that held them back. You should consider doing the same. The 1,090 support area held for the fourth straight day and the SPX formed a hammer like pattern after making a short term low at 1,083.11. On Wednesday BA gained 4.22 or 7.31% and GILD +3.17 or +7.06% after reporting earnings. ALTR +1.23 or +5.80% on positive earnings led semiconductors higher. AMAT, MU, SNDK, TER, MRVL, AMD and INTC had larger than average moves. After the Close GMCR was +1.73 or +2.16% on strong earnings. SYMC -0.86 or -4.62% QCOM -4.74 or -10.04% Both had solid earnings but lowered guidance looking forward. Continue to watch earnings reaction this week. Thursday’s Earnings to Watch: MMM, AMZN, BDX, CA, CELG, CHKP, DHR, GR, JBHT, KLAC, LIFE, LUV, LMT, MSFT, MXIM, POT, PG, RTN SNDK, TROW, LCC, VPRT A number of up trending stocks held at support and began to bounce on Wednesday. Look at these Charts… (click image to enlarge) Look at these Charts… (click image to enlarge) Guidance: The SPX bounced off the 1,090 support area. The multi-month trend is up. The multi-week trend is sideways. A support bounce at this level provides short term support bounce entries. Look for support bounce entry opportunities. Continue to focus on and trade setups on the charts of the stocks you watch and follow your rules. If you have not yet been stopped out of your up trending positions, continue to raise your stops. If 1,090 support area breaks, the next level of SPX support is 1,075 and then 1,050. Look for down trending setups on stocks that have shown reversal patterns or that are breaking support if the SPX breaks support. AAPL +1.94 QCOM +0.31 GOOG -0.32 BIDU +4.98 NDX 100 stocks stronger than the NDX include: FLEX, GILD, ALTR, APOL, ATVI, RIMM, AMAT, AMZN, NVDA, MXIM, ERTS, LINTA, ILMN, AMGN, ROST, LRCX, PCLN, WCRX, JBHT, MRVL, GRMN, INTC, BIDU, CTSH, ISRG, BIIB, CSCO, DTV, XLNX, FISV and IACI. Stocks to Watch on Thursday Leading Stocks Holding Above 30 DMA ALGT, UAUA, CBST, SNDK, AMED, GMCR, HANS, ESI, VAR, BA, CEDC, ZION, K, MCD, FAZ, CHL, DLB Moving Above 30 DMA = 4 DECK, JEC, MA, WFC Moving Below 30 DMA = 1 BYI Staying Below 30 DMA ACN, FLS, TDG, UNG, BUCY, DE, DOW, FAS, HLF, SYNA, UNP, UYG, X, ATW, CAM, HDB, MHS, MOS, PCP, GR, URE, GS, HEAT, WHR, CAT, FCX, BAC, DHR, AGU, FUQI, ICE, IPI, SWN, USO, WLT, WMT, BKC, WAB, USD, PWRD, AMD, AMX, CGA, GES, MON, POT, TSL, BDX, MYGN, WCG, SPG, VPRT, GME, MELI, PCLN, NFLX Intermediate Term Market Trend: Up Short Term Market Trend: Neutral

Futures Point to a Flat Open...

BMO – ES +2.00 and NQ +3.25 futures are near slightly higher in pre-market trading pointing to a flat open. AAPL +0.96, AMZN +1.47, GOOG +0.48 and BIDU +2.62 are higher in pre-market trading. Wednesday’s Earnings to Watch: ABT, ATI, AMLN, BYI, FLEX, F, GD, GMCR, IVZ, LRCX, NFLX, QCOM, SWK, SYMC, UAUA, UTX VAR Earnings out this morning: UAUA +71 cents on 10,100 shares. CAT is -1.90 on 333,000 shares. The Euro is down 2 pips in overnight trading. Oil is up 25 cents in electronic trading. XLE is up 14 cents in pre-market trading. SPY is up 4 cents in pre-market trading. XLF is up 9 cents in pre-market trading. Continue to watch XLF as a key to a support bounce rally in the SPX as it is doing this morning. Follow your rules in any trading actions today. Be logical. Watch Monday’s support low for a potential break of support. If support holds what for a potential follow through of Monday’s inside day and confirmation of the bullish harami. The bullish harami did NOT confirm on Tuesday. The SPX did form an inverted hammer on Tuesday. We will be looking for potential confirmation of both Monday’s bullish harami and Tuesday’s inverted hammer. If support breaks look for price to fall to the next support level. SPX Support = 1,087, 1,175 Resistance = 1,103, 1,115 Trading Down: X, Trading Up: POT, AAPL, AMZN, XLF Look at these Charts… (click image to enlarge) At the Open on Wednesday SPY – QQQQ – FAS – SHLD – CREE – STX – STT – NTRS – BAC – INFY – ZION – X – AAPL – AKAM – AMZN – NVDA – RIMM – SNDK – BUCY – DECK – FWLT – ISRG – PCLN – UAUA – ACN – AGU – AMD – CAT – DE – DOW – DHR – MA – PCP – POT – UNP – WHR –

SPX Fails to Break Friday's R1...Holding at Support...

DJIA 10,194.29 -2.57 -0.03% SP500 1,092.17 -4.61 -0.42% COMPQ 2,203.44 -7.07 -0.32% Russell 2000 612.16 -5.95 -0.96% Exchange NYSE NASD Advancing 1,094 890 Declining 1,952 1,805 Oil $74.71 -0.55 Gold $1,098.30 +1.90 SOX 333.52 -0.66 VIX 24.55 -0.86 The VIX moved down and did NOT confirm the move down in the SPX on Tuesday. The SOX moved down and did confirm the move down in the COMPQ. Strongest Sectors: XLU +0.40%…XLY +0.14%...XLP -0.11% Weakest Sectors: XLF -1.75%...XLB -1.41%...XLE -0.64% Seven of nine sectors moved lower on Tuesday as sellers stepped in during the last two hours of the day to erase a 7 point gain in the SPX. Utilities, Consumer Discretionary, Consumer Staples and Technology were stronger than the SPX -0.42%. Sector Watch Up Trending: XLK, XLB, XLY, XLV, XLP, XLE, XLI, XLU Horizontal Breakout: XLF Sideways: Down Trending: Key Resistance Levels: 1,101 = October High 1,105 - 1,113 = November High 1,119 = December High 1,025 - 1,133 = 1,075 BO chart target - Sep 08 Low 1,145 = 1,133 BO chart target – Dec 31 Low 1,155 = chart target Key Support Levels 1,087 = Nov 10 Channel low 1,082 = Nov 9 S1 level 1,075 = 875 Breakout Chart Target 1,050 = Oct 08 High Support held on Tuesday but the SPX was unable to break through Monday’s R1 resistance level and did not confirm Monday’s bullish harami. The SPX made a lower low by 0.32 point which makes Tuesday the low day. ALGT, BHI and ZION rose after earnings Tuesday morning while X fell on a larger than expected loss. After the Close ALTR +1.16, +5.47% YHOO +0.60, +3.75% Continue to watch earnings reaction this week. Wednesday’s Earnings to Watch: ABT, ATI, AMLN, BYI, FLEX, F, GD, GMCR, IVZ, LRCX, NFLX, QCOM, SWK, SYMC, UAUA, UTX VAR Guidance: The SPX closed just above the 1,090 support area for the third straight day. AAPL trading finished with a modest close. Traders apparently weren’t ready to move AAPL above recent resistance. If 1,090 support area breaks, the next level of SPX support is 1,075 and then 1,050. Be prepared to trade accordingly. If you have not yet been stopped out of your up trending positions, continue to raise your stops. Look for down trending setups on stocks that have shown reversal patterns or that are breaking support. Continue to focus on and trade setups on the charts of the stocks you watch and follow your rules. AAPL +2.86 QCOM -0.02 GOOG +2.42 BIDU +4.22 NDX 100 stocks weaker than the NDX include: FLEX, NVDA, SIAL, DELL, JOYG, CMCSA, GILD, DISH, INTC, STLD, ADSK, RYAAY, LLTC and DTV. NDX 100 stocks stronger than the NDX include: FSLR, CTXS,STX, EXPE, PPDI, ROST, APOL, EBAY, AMGN, AAPL, LOGI, CEPH,WCRX, BIDU, SHLD, NWSA, URBN, YHOO, PCLN, COST, CTSH, BIIB, SBUX, MSFT, VRSN and CA. Stocks to Watch on Wednesday Leading Stocks Holding Above 30 DMA ALGT, UAUA, CBST, SNDK, AMED, GMCR, HANS, ESI, VAR, BA, BYI, CEDC, ZION, K, MCD, FAZ, CHL, DLB Moving Above 30 DMA = 0 Moving Below 30 DMA = 2 JEC, WFC Staying Below 30 DMA ACN, FLS, TDG, UNG, BUCY, DE, DECK, DOW, FAS, HLF, MA, SYNA, UNP, UYG, X, ATW, CAM, HDB, MHS, MOS, PCP, GR, URE, GS, HEAT, WHR, CAT, FCX, BAC, DHR, AGU, FUQI, ICE, IPI, SWN, USO, WLT, WMT, BKC, WAB, USD, PWRD, AMD, AMX, CGA, GES, MON, POT, TSL, BDX, MYGN, WCG, SPG, VPRT, GME, MELI, PCLN, NFLX Intermediate Term Market Trend: Up Short Term Market Trend: Down

Futures Point to a Lower Open...

10:00 am ET - ALGT +1.68 or +3.29% and BHI +2.05 or +4.53% after releasing earnings BMO – ES -4.50 and NQ -3.75 futures are higher in pre-market trading pointing to a higher open. AAPL +2.64, AMZN +0.54, GOOG -2.25 and BIDU -1.16 are mixed in pre-market trading. Tuesday’s Earnings to Watch: X, DD, VZ, ALGT, ALTR, BHI, BA, CAT, DAL, JEC, JNJ, NUE, TRV and YHOO ZION is +0.93 or +5.41%, X is -3.07 or -5.39%, DD is -0.22 or -0.67% and VZ is -0.30 or -0.98% after releasing earnings. The Euro is down 84 pips in overnight trading. Oil is down 82 in electronic trading. XLE is down 47 cents in pre-market trading. SPY is down 54 cents in pre-market trading. XLF is down 8 cents in pre-market trading. Continue to watch XLF as a key to a support bounce rally in the SPX as it is doing this morning. Follow your rules in any trading actions today. Be logical. Watch Monday’s support low for a potential break of support. If support holds what for a potential follow through of Monday’s inside day and confirmation of the bullish harami. If support breaks look for price to fall to the next support level. SPX Support = 1,175 Resistance = 1,103, 1,115 Trading Down: X, POT, UNH, AGU, BUCY, XLB, XLF, XLV Trading Up: AAPL, AMZN, ZION, AMLN Look at these Charts… (click image to enlarge) At the Open on Tuesday SPY – QQQQ – FAS – SHLD – CREE – STX – STT – NTRS – BAC – INFY – ZION – X – AAPL – AKAM – AMZN – NVDA – RIMM – SNDK – BUCY – DECK – FWLT – ISRG – PCLN – UAUA – ACN – AGU – AMD – CAT – DE – DOW – DHR – MA – PCP – POT – UNP – WHR –

SPX - 1,090 Support Holds...Inside Day...Bullish Harami

DJIA 10,196.86 +23.88 +0.23% SP500 1,096.78 +5.02 +0.46% COMPQ 2,210.80 +5.51 +0.25% Russell 2000 618.11 +0.99 +0.16% Exchange NYSE NASD Advancing 1,757 1,330 Declining 1,293 1,381 Oil $75.26 +0.72 Gold $1,095.70 +6.70 SOX 334.18 +4.69 VIX 25.41 -1.90 The VIX moved down and did confirm the move up in the SPX on Monday. The SOX moved up and did confirm the move up in the COMPQ. Strongest Sectors: XLB +0.89%…XLK +0.83%...XLU +0.67% Weakest Sectors: XLV -0.00%...XLP +0.19%...XLY +0.52% Eight nine sectors moved higher on Monday as buyers stepped following last week’s pullback. Materials, Technology, Utilities, Energy, Industrials, Financials and Consumer Discretionary were stronger than the SPX +0.46%. SPX Chart Signals Target: 1,234 end of January. This is not a subjective forecast; rather it is the chart target price and time based on the mid July breakout at 950. We consider extremely improbable that this target will be reached by the end of January. Sector Watch Up Trending: XLK, XLB, XLY, XLV, XLP, XLE, XLI, XLU Horizontal Breakout: XLF Sideways: Down Trending: Key Resistance Levels: 1,101 = October High 1,105 - 1,113 = November High 1,119 = December High 1,025 - 1,133 = 1,075 BO chart target - Sep 08 Low 1,145 = 1,133 BO chart target – Dec 31 Low 1,155 = chart target Key Support Levels 1,087 = Nov 10 Channel low 1,082 = Nov 9 S1 level 1,075 = 875 Breakout Chart Target 1,050 = Oct 08 High Downward momentum slowed on Monday as support held with an inside day and bullish harami on many index and stock charts. AKS rose +$1.08 or +5.35%, after reporting positive earnings Monday morning. After the close AAPL rose +$1.82 or +0.90% reporting better than expected earnings, but surprised the market with changes in their accounting that made the report not directly comparable with existing estimates. As a result the stock was down then up then down and finally up after the report. Tomorrow’s trading should be more indicative of the markets’ interpretation of the strength of the report after they can factor in the accounting change. The February AAPL straddle was priced at 20 near the close, so a gap of +1.82 is very weak. Also reporting after the close ZION +0.80 or +4.46%, AMGN +0.49 or +0.88% and TXN -0.40 or -1.69%. Continue to watch earnings reaction this week. Tuesday’s Earnings to Watch: X, DD, VZ, ALGT, ALTR, BHI, BA, CAT, DAL, JEC, JNJ, NUE, TRV, YHOO Guidance: The SPX closed just above the 1,090 support area. AAPL trading will likely have an influence on Tuesday whether support holds or breaks. If 1,090 support area breaks, the next level of SPX support is 1,075 and then 1,050. If you have not yet been stopped out of your up trending positions, continue to raise your stops. Look for down trending setups on stocks that have shown reversal patterns or that are breaking support. Continue to focus on and trade setups on the charts of the stocks you watch and follow your rules. AAPL +5.32 QCOM +0.13 GOOG -10.01 BIDU -1.74 NDX 100 stocks weaker than the NDX include: WCRX, ATVI, SBUX, JOYG, GOOG, SHLD, AMGN, VRTX, ADSK, CEPH, CA and SRCL. NDX 100 stocks stronger than the NDX include: LBTYA, STX, AAPL, XLNX, INTC, NWSA, ORLY, DELL, LRCX, RYAAY, NVDA, LOGI, FLEX, BRCM, MSFT, ROST, LLTC, DISH, CMCSA, SYMC, MXIM, MCHP, INTU, COST, PDCO, INFY, ESRX, TEVA, MRVL, MICC and FISV. Stocks to Watch on Tuesday Leading Stocks Holding Above 30 DMA ALGT, UAUA, CBST, SNDK, AMED, GMCR, HANS, ESI, JEC, VAR, WFC, BA, BYI, CEDC, ZION, K, MHS, MCD, FAZ Moving Above 30 DMA = 2 CHL, DLB Moving Below 30 DMA = 4 ACN, FLS, TDG, UNG Staying Below 30 DMA BUCY, DE, DECK, DOW, FAS, HLF, MA, SYNA, UNP, UYG, X, ATW, CAM, HDB, MHS, MOS, PCP, GR, URE, GS, HEAT, WHR, CAT, FCX, BAC, DHR, AGU, FUQI, ICE, IPI, SWN, USO, WLT, WMT, BKC, WAB, USD, PWRD, AMD, AMX, CGA, GES, MON, POT, TSL, BDX, MYGN, WCG, SPG, VPRT, GME, MELI, PCLN, NFLX Intermediate Term Market Trend: Up Short Term Market Trend: Down

Futures Point to a Higher Open...

2:50 pm ET - Inside Day forming - AAPL, X, TXN, DECK, DOW, FWLT, GE, JCI, NVDA, POT, SNDK, STT, STX, WDC, XLB, XLE, XLF, XLV Bullish Harami = DE, NTRS, TSL Hammer = ZION (EPS release after close) 12:50 pm ET - Earnings Watch - AAPL, ZION, AMGN, TXN report after the close on Monday... 12:45 pm ET - X broke out of its 5 minute channel and is heading higher...AKS reported 36 cents EPS vs. estimates of 20 cents before the market open and has risen 7% from Friday's close...AKS is near breaking the high of the low day of 21.74... 12:05 pm ET - look at the 5 minute price channel on X this morning making a higher low from Friday's low...look for channel break out... 11:30 am ET - early rally fades and many stocks are now forming inside days as we said to look for today...X, AAPL, AGU, BUCY, EBAY, GE, JCI, POT, STT, STX, TSL, WDC XLB, XLE, , XLF, XLV...while other stocks like CREE, SBUX and ZION are below Friday's low...we will patiently watch for support to hold or trade down below support levels... BMO – ES +8.00 and NQ +9.25 futures are higher in pre-market trading pointing to a higher open. AAPL +4.62, AMZN +1.27, GOOG -3.29 and BIDU +4.09 are mostly higher in pre-market trading. AAPL reports earnings after the close today. The Euro is down 5 pips in overnight trading. Oil is down 27 in electronic trading. XLE is up 50 cents in pre-market trading. SPY is up 1.24 cents in pre-market trading. XLF is up 19 cents in pre-market trading. Continue to watch XLF as a key to a support bounce rally in the SPX as it is doing this morning. There is still a 1,234 chart target for the end of January. We don’t expect this target to be achieved by the end of January as we stated. With the three day pull back last week it would require an extraordinary rally. Remember direction and price target are more important than time. Follow your rules in any trading actions today. Be logical. Watch for a potential support bounce or an inside day this morning and the R1 level of Friday’s large black candle. If support breaks look for price to fall to the next support level. SPX Support = 1,090, 1,075 Resistance = 1,103, 1,115 Trading Down: Trading Up: X, WDC, POT, AAPL, AMZN, BUCY, AGU, TSL, EBAY, STX, SBUX, UNH, XLB, XLF, XLV Look at these Charts… (click image to enlarge) At the Open on Monday SPY – QQQQ – FAS – SHLD – CREE – STX – STT – NTRS – BAC – INFY – ZION – X – AAPL – AKAM – AMZN – NVDA – RIMM – SNDK – BUCY – DECK – FWLT – ISRG – PCLN – UAUA – ACN – AGU – AMD – CAT – DE – DOW – DHR – MA – PCP – POT – UNP – WHR –

SPX Falls to 1,090 Support...

DJIA 10,172.98 -216.90 -2.09% SP500 1,091.76 -24.72 -2.21% COMPQ 2,205.29 -60.41 -2.67% Russell 2000 617.12 - 11.24 -1.79% Exchange NYSE NASD Advancing 557 735 Declining 2,525 1,990 Oil $74.75 -$1.33 Gold $1,092.00 -$11.20 SOX 329.49 -18.42 VIX 27.31 +5.04 The VIX moved up and did confirm the move down in the SPX on Friday. The SOX moved down and did confirm the move down in the COMPQ. Strongest Sectors: XLP -0.23%…XLV -1.09%...XLI -1.52% Weakest Sectors: XLK -3.48%...XLF -3.26%...XLE -2.38% All nine sectors moved lower on Friday as selling continued from Thursday. Consumer Staples, Healthcare, Industrials, Consumer Discretionary, Materials and Utilities were stronger than the SPX -2.21%. SPX Chart Signals Target: 1,234 end of January. This is not a subjective forecast; rather it is the chart target price and time based on the mid July breakout at 950. With the combination of modest to negative earnings reaction this past week and the proposal to reform the banking industry, we consider extremely improbable that this target will be reached by the end of January. Sector Watch Up Trending: XLK, XLB, XLY, XLV, XLP, XLE, XLI, XLU Horizontal Breakout: XLF Sideways: Down Trending: Key Resistance Levels: 1,101 = October High 1,105 - 1,113 = November High 1,119 = December High 1,025 - 1,133 = 1,075 BO chart target - Sep 08 Low 1,145 = 1,133 BO chart target – Dec 31 Low 1,155 = chart target Key Support Levels 1,087 = Nov 10 Channel low 1,082 = Nov 9 S1 level 1,075 = 875 Breakout Chart Target 1,050 = Oct 08 High Downward momentum accelerated in the COMPQ, SPX and INDU on Friday, and while downward momentum in the RUT remained about the same. Semiconductor stocks which had been relatively strong on Thursday, sold off on heavy volume on Friday. AMD led the way down -1.11 or -12.35% after reporting a smaller than expected loss late Thursday. Apparently traders were concerned with the longer term outlook for AMD. AXP reported better than expected earnings by two cents of 59 cents per share. AXP fell -3.57 or -8.47% on Friday leading the INDU lower. Only INDU components PG, GE, MCD and WMT moved higher on Friday. GOOG fell -32.97 or -5.66% on Friday after reporting earnings of $6.79 vs. 6.50 estimates after the close on Thursday. GOOG along with JOYG and semiconductor stocks AMAT, MRVL, KLAC and LRCX led the COMPQ lower. Only seven NDX 100 stocks moved higher on Friday led by ISRG +35.86 or +11.78% which reported strong earnings after the close on Thursday. Continue to watch earnings reaction next week. Guidance: The SPX broke both the 1,115 and 1,105 support areas on Friday and fell to the next support level at 1,090. If 1,090 support area breaks, the next level of SPX support is 1,075 and then 1,050. Trade accordingly. If you have not yet been stopped out of your up trending positions, continue to raise your stops. Look for down trending setups on stocks that have shown reversal patterns or that are breaking support. Continue to focus on and trade setups on the charts of the stocks you watch and follow your rules. AAPL -10.32 QCOM -1.31 GOOG -32.97 BIDU -23.07 NDX 100 stocks weaker than the NDX include: JOYG, AMAT, MRVL, KLAC,LRCX, GOOG, FSLR, STX, XLNX, DELL, BIDU, AAPL, NIHD, INTC, FWLT, ALTR, LLTC, MXIM, CSCO, AMZN, FLEX and ADBE. NDX 100 stocks stronger than the NDX include: ISRG, CELG, VRTX, GILD, APOL, PPDI, ORLY, AMGN, HOLX, GENZ, BIIB, SRCL, CEPH, MICC, CHKP, CHRW, SHLD and LIFE. Stocks to Watch on Monday Leading Stocks Holding Above 30 DMA ALGT, TDG, UAUA, CBST, SNDK, AMED, GMCR, HANS, ESI, JEC, VAR, ACN, WFC, BA, BYI, CEDC, ZION, FLS, K, MHS, MCD Moving Above 30 DMA = 2 FAZ, UNG Moving Below 30 DMA = 13 BUCY, CHL, DE, DECK, DLB, DOW, FAS, HLF, MA, SYNA, UNP, UYG, X Staying Below 30 DMA ATW, CAM, HDB, MHS, MOS, PCP, GR, URE, GS, HEAT, WHR, CAT, FCX, BAC, DHR, AGU, FUQI, ICE, IPI, SWN, USO, WLT, WMT, BKC, WAB, USD, PWRD, AMD, AMX, CGA, GES, MON, POT, TSL, BDX, MYGN, WCG, SPG, VPRT, GME, MELI, PCLN, NFLX Intermediate Term Market Trend: Up Short Term Market Trend: Down

Futures Points to a Mixed Opening...

11:06 am ET - X has formed a potential intra-day double bottom at 54.50 area and a subsequent higher high and higer low...on the daily chart X is currently a dragonfly doji/hammer... 10:00 am ET - SHLD is forming a bullish harami in a bull flag pattern... 9:55 am ET - on Thursday X -2.10 was upgraded to Buy from Neutral at Longbow, this morning downgraded to Buy from Conviction, and the metals and steel sector to neutral from Attractive at Goldman (GS)...they also downgraded FCX... MICC is forming a bullish harami in a bull flag... BMO – ES -2.50 and NQ +3.00 futures are mixed in pre-market trading pointing to a mixed open. AAPL -0.96, AMZN -0.67, GOOG -21.44 and BIDU -8.56 are lower and ISRG +24.31 is higher in pre-market trading. The Euro is up 49 pips in overnight trading creating a short term reversal in the dollar. Oil is down 25 in electronic trading. XLE is down 31 cents in pre-market trading. SPY is down 34 cents in pre-market trading. XLF is down 2 cents in pre-market trading. Continue to watch XLF as a key to sustain the breakout in the SPX which it is not doing this morning. There is still a 1,234 chart target for the end of January. Without a strong positive reaction to earnings this week and next we don’t see this target being achieved by the end of January as we stated in Friday’s post. Remember direction and price target are more important than time. Follow your rules in any trading actions today. Be logical. Watch for a potential support bounce or an inside day this morning and the R1 level of Thursday’s large black candle. If support breaks look for price to fall to the next support level. SPX Support = 1,106 - 1,117 Resistance = 1,125 – 1,133, 1,145, 1,155, 1,170 Trading Down: WDC, POT, AAPL, AMZN, BUCY, AGU, TSL, EBAY, STX, SBUX, X Trading Up: ISRG, UNH, NTRS At the Open on Friday SPY – QQQQ – FAS – SHLD – CREE – STX – STT – NTRS – BAC – INFY – ZION – X – AAPL – AKAM – AMZN – NVDA – RIMM – SNDK – BUCY – DECK – FWLT – ISRG – PCLN – UAUA – ACN – AGU – AMD – CAT – DE – DOW – DHR – MA – PCP – POT – UNP – WHR –

SPX Breaks Support....

DJIA 10389.88 -213.27 -2.01% SP500 1,116.48 -21.56 -1.89% COMPQ 2,265.70 -25.55 -1.12% Russell 2000 628.36 - 11.25 -1.76% Exchange NYSE NASD Advancing 651 Declining 2,410 2,015 Oil $76.20 -1.85 – March contract Gold $1,103.00 -10.00 – February contract SOX 347.91 -1.89 VIX 22.27 +3.59 The VIX moved up and did confirm the move down in the SPX on Thursday. The SOX moved down and did confirm the move down in the COMPQ. Strongest Sectors: XLK -1.06%…XLY -1.27%...XLP -1.42% Weakest Sectors: XLB -4.33%...XLF -2.85%...XLI -2.32% All nine sectors moved lower on Thursday as selling continued from Wednesday. Technology, Consumer Discretionary, Consumer Staples and Utilities were stronger than the SPX -1.89%. SPX Chart Signals Target: 1,234 end of January. This is not a subjective forecast; rather it is the chart target price and time based on the mid July breakout at 950. As we stated last week without good earnings reaction we considered unlikely the end of January time target would be reached. That conclusion appears more apparent after Thursday’s trading. Sector Watch Up Trending: XLK, XLB, XLY, XLV, XLP, XLE, XLI, XLU Horizontal Breakout: XLF Sideways: Down Trending: Key Resistance Levels: 1,025 - 1,133 = 1,075 BO chart target - Sep 08 Low 1,145 = 1,133 BO chart target – Dec 31 Low 1,155 = chart target Key Support Levels 1,119 = December High 1,105 - 1,113 = November High 1,101 = October High 1,087 = Nov 10 Channel low 1,082 = Nov 9 S1 level 1,075 = 875 Breakout Chart Target Downward momentum accelerated in the SPX, INDU and RUT on Thursday, while it actually slowed in the COMPQ. The President’s proposal for overhauling banks by limiting the size and complexity to avoid future financial bailouts sent major bank stocks lower including JPM, BAC, GS and MS fell. WFC and smaller banks ZION, RF, KEY and USB rose on Thursday. Better than expected earnings generated increased buying in EBAY, STX, UNP and SBUX. GOOG moved over 26 points lower in after-hours trading after reporting earnings of $6.79 vs. 6.50 estimates. Continue to watch earnings reaction this week and next week. ZION rose another 44 cents or +2.46% in front of earnings on Jan 25. Guidance: The SPX broke 1,130 support and fell to the next support level at 1,115. If 1,115 support breaks the next level of SPX support is 1,105. Stay with your up trending positions. Continue to raise your stops. Stay with trends that have broken above resistance. Continue to focus on and trade setups on the charts of the stocks you watch and follow your rules. AAPL -3.65 QCOM -0.26 GOOG +2.57 BIDU +0.30 NDX 100 stocks stronger than the NDX include: EBAY, STX, XLNX, ALTR, SBUX, PCLN, AMZN, GOOG, MRVL, BRCM, APOL, HOLX, FLIR, VRSN, EXPE, ERTS, EXPD, PPDI, FLEX BIDU, HSIC CHRW, CTXS, ORLY, SRCL, LINTA, CELG, ADP and QCOM. Stocks to Watch on Friday Leading Stocks Holding Above 30 DMA MA, DLB, DE, ALGT, SYNA, TDG, X, UAUA, CBST, SNDK, AMED, GMCR, HANS, ESI, JEC, VAR, UYG, BUCY, ACN, DECK, DOW, FAS, WFC, BA, BYI, CEDC, CHL, ZION, FLS, HLF, K, MHS, MCD Moving Above 30 DMA = 1 UNP Moving Below 30 DMA = 15 ATW, CAM, HDB, MHS, MOS, PCP, GR, URE, GS, HEAT, WHR, CAT, FCX, BAC, DHR Staying Below 30 DMA AGU, FUQI, ICE, IPI, SWN, USO, WLT, WMT, UNG, BKC, WAB, USD, PWRD, AMD, AMX, CGA, GES, MON, POT, TSL, BDX, MYGN, WCG, SPG, VPRT, GME, MELI, PCLN, FAZ, NFLX Intermediate Term Market Trend: Up Short Term Market Trend: Down

Futures Point to a Flat Opening...

BMO – ES +0.50 and NQ +1.25 futures are lower in pre-market trading pointing to a lower open. AAPL +0.42, AMZN +1.07, GOOG +2.60 and BIDU +1.33 are lower in pre-market trading. The Euro is down 33 pips in overnight trading creating a short term reversal in the dollar. Oil is up 17 in electronic trading. XLE is up 10 cents in pre-market trading. SPY is up 5 cents in pre-market trading. XLF is up 4 cents in pre-market trading. Continue to watch XLF as a key to sustain the breakout in the SPX which it is not doing this morning. There is still a 1,234 chart target for the end of January. Without a strong positive reaction to earnings this week and next we don’t see this target being achieved by the end of January as we stated in Friday’s post. Remember direction and price target are more important than time. Follow your rules in any trading actions today. Be logical. Watch for support bounce this morning and the R1 level of Wednesday’s large black candle. Financials are up. EBAY is up 2.02 or 9.09% in pre-market trading after reporting better than expected earnings and raising guidance. STX rose 1.91 or 10.75% in pre-market after reporting earnings of $1.03 vs. 65 cents estimate. SBUX rose 61 cents or 2.71% after better than expected earnings. Thursday Key Earnings to Watch: AMD, AXP, BNI, FCX, GOOG, ISRG, ESI, KEY, PNC, PCP, LUV, SYNA, UNP, UNH, WDC SPX Support = 1,125 – 1,133, 1,106 - 1,117 Resistance = 1,145, 1,155, 1,170 Trading Down: Trading Up: UNH, WDC, POT, AAPL, AMZN, BUCY, AGU, TSL, EBAY, STX, SBUX Look at these Charts… (click image to enlarge) At the Open on Thursday SPY – QQQQ – FAS – SHLD – CREE – STX – STT – NTRS – BAC – INFY – ZION – X – AAPL – AKAM – AMZN – NVDA – RIMM – SNDK – BUCY – DECK – FWLT – ISRG – PCLN – UAUA – ACN – AGU – AMD – CAT – DE – DOW – DHR – MA – PCP – POT – UNP – WHR –

IBM Leads SPX Down to Support...

DJIA 10,603.15 -122.15 -1.14% SP500 1,138.04 -12.19 -1.06% COMPQ 2,291.25 -29.15 -1.26% Russell 2000 639.61 - 9.54 -1.47% Exchange NYSE NASD Advancing 789 749 Declining 2,260 1,972 Oil $78.05 -1.27 – March contract Gold $1,113.00 -27.00 – February contract SOX 349.80 -1.04 VIX 18.68 +1.10 The VIX moved up and did confirm the move down in the SPX on Wednesday. The SOX moved down and did confirm the move down in the COMPQ. Strongest Sectors: XLF -0.26%…XLP -0.74%...XLV -0.85% Weakest Sectors: XLB -1.78%...XLK -1.61%...XLE -1.56% All nine sectors moved lower on Wednesday as selling reversed Tuesday’s buying with the SPX closing just two points above Friday’s close. Financials, Consumer Staples, Healthcare and Utilities were stronger than the SPX -1.06%. SPX Chart Signals Target: 1,234 end of January. This is not a subjective forecast; rather it is the chart target price and time based on the mid July breakout at 950. Continue to watch earnings reaction this week and next week. Sector Watch Up Trending: XLK, XLB, XLY, XLV, XLP, XLE, XLI, XLU Horizontal Breakout: XLF Sideways: Down Trending: Key Resistance Levels: 1,145 = 1,133 BO chart target – Dec 31 Low 1,155 = chart target Key Support Levels 1,025 - 1,133 = 1,075 BO chart target - Sep 08 Low 1,119 = December High 1,105 - 1,113 = November High 1,101 = October High 1,087 = Nov 10 Channel low 1,082 = Nov 9 S1 level 1,075 = 875 Breakout Chart Target All four broad indexes reversed Tuesday’s gains closing near Friday’s low above recent horizontal support. IBM fell on selling in reaction to earnings released after the close on even though they reported after better than expected earnings and raised its 2010 guidance. Apparently it wasn’t good enough to counter profit taking. CREE rose $9.38 or +17.30% on Wednesday after reporting better than expected earnings and raised fiscal Q3 guidance by 13 to 16 cents. STT, NTRS, BAC, USB and AMR rose while WFC, MS and COH fell after reporting earnings. In After-hours trading: EBAY climbed 1.80 or +8.10% after reported better than expected earnings and raising guidance. STX rose 1.84 or +10.36% reporting earnings of $1.03 vs. 65 cents estimate. SBUX rose 64 cents or +2.75% on better than expected earnings. Thursday Key Earnings to Watch: AMD, AXP, BNI, FCX, GOOG, ISRG, ESI, KEY, PNC, PCP, LUV, SYNA, UNP, UNH, WDC ZION rose another 81 cents or +4.73% in front of earnings on Jan 25. Guidance: The SPX has been in a narrow trading range between 1,130 and 1,150 since January 4 presumably waiting for earnings season. Earnings reaction is more important over earnings than the current technicals on the chart. Follow your strategies as a stock moves into its earnings release. Watch for support bounce or support break after Wednesday's pull back to support. Stay with your up trending positions. Continue to raise your stops. Stay with trends that have broken above resistance. Continue to focus on and trade setups on the charts of the stocks you watch and follow your rules. AAPL -3.31 QCOM -0.97 GOOG -7.21 BIDU -1.17 NDX 100 stocks stronger than the NDX include: LBTYA, NIHD, CEPH, IACI, LOGI, GENZ, TEVA, XLNX, ERTS, MXIM, INTC, PAYX, LRCX, ATVI, ADSK, JBHT, BIDU, EXPD, HANS, ALTR and NVDA. Stocks to Watch on Thursday Leading Stocks Holding Above 30 DMA MA, DLB, DE, ALGT, GR, SYNA, PCP, TDG, X, UAUA, WHR, URE, DHR, CBST, SNDK, AMED, CAM, GMCR, HANS, ESI, JEC, VAR, UYG, MOS, BUCY, ACN, DECK, DOW, FAS, WFC, ATW, BA, BAC, BYI, CAT, CEDC, CHL, FCX, HEAT, ZION, FLS, HLF, K, MHS, MCD, HDB, Moving Above 30 DMA = 2 GS, CREE Moving Below 30 DMA = 9 AGU, FUQI, ICE, IPI, SWN, UNP, USO, WLT, WMT Staying Below 30 DMA UNG, BKC, WAB, USD, PWRD, AMD, AMX, CGA, GES, MON, POT, TSL, BDX, MYGN, WCG, SPG, VPRT, GME, MELI, PCLN, FAZ, NFLX Intermediate Term Market Trend: Up Short Term Market Trend: Neutral

Futures Point to a Lower Open...Watch Tuesday's S1 Level...

BMO – ES -3.25 and NQ -4.50 futures are lower in pre-market trading pointing to a lower open. AAPL -0.16, AMZN -0.00, GOOG -1.32 and BIDU -5.84 are lower in pre-market trading. The Euro is down 145 pips in overnight trading creating a short term reversal in the dollar. Oil is down 1.00 in electronic trading. XLE is down 45 cents in pre-market trading. SPY is down 36 cents in pre-market trading. XLF is up 7 cents in pre-market trading. Continue to watch XLF as a key to sustain the breakout in the SPX which it is not doing this morning. There is still a 1,234 chart target for the end of January. Without a strong positive reaction to earnings this week and next we don’t see this target being achieved by the end of January as we stated in Friday’s post. Remember direction and price target are more important than time. We may be seeing those signals for a potential pull back this morning. Follow your rules in any trading actions today. Be logical. Watch for consolidation this morning and the S1 level of Tuesday’s large white candle. Financials are up. IBM is -$1.85 in pre-market trading less than Tuesday’s gain and CREE is +$6.89 or +12.71% in pre-market trading. Wednesday Key Earnings to Watch: AMR, BAC, COH, EBAY, LOGI, MS, NTRS, STX, SBUX, STT, USB, WFC, XLNX SPX Support = 1,125 – 1,133, 1,106 - 1,117 Resistance = 1,145, 1,155, 1,170 Trading Down: INFY, AMZN, CAT, TSL Trading Up: X, POT, AAPL, BUCY, AGU Look at these Charts… (click image to enlarge) At the Open on Wednesday SPY – QQQQ – FAS – AA – SHLD – X – AAPL – AKAM – AMZN – CREE – NVDA – RIMM – SNDK – BUCY – DECK – FWLT – ISRG – PCLN – UAUA – ACN – AGU – AMD – CAT – DE – DOW – MA – PCP – POT – UNP – WHR –

SPX 1,150 New High Close...

DJIA 10,725.43 +115.78 +1.09% SP500 1,150.23 +14.20 +1.25% COMPQ 2,320.40 +32.41 +1.42% Russell 2000 649.15 +11.19 +1.75% Exchange NYSE NASD Advancing 2,398 1,909 Declining 691 833 Oil $78.75 +0.38 – March contract Gold $1,140.50 +10.00 – February contract SOX 350.84 +6.17 VIX 17.58 -0.33 The VIX moved down and did confirm the move up in the SPX on Tuesday. The SOX moved up and did confirm the move up in the COMPQ. Strongest Sectors: XLV +2.42%…XLK +1.72%...XLB +1.60% Weakest Sectors: XLP +0.60%...XLE +0.91%...XLE +1.10% All nine sectors moved higher on Tuesday as buying was stronger than Friday’s selling. Healthcare, Technology, Materials, Consumer Discretionary and Financials were stronger than the SPX +1.25%. SPX Chart Signals Target: 1,234 end of January. This is not a subjective forecast; rather it is the chart target price and time based on the mid July breakout at 950. Continue to watch earnings reaction this week and next week. Sector Watch Up Trending: XLK, XLB, XLY, XLV, XLP, XLE, XLI, XLU Horizontal Breakout: XLF Sideways: Down Trending: Key Resistance Levels: 1,145 = 1,133 BO chart target – Dec 31 Low 1,155 = chart target Key Support Levels 1,025 - 1,133 = 1,075 BO chart target - Sep 08 Low 1,119 = December High 1,105 - 1,113 = November High 1,101 = October High 1,087 = Nov 10 Channel low 1,082 = Nov 9 S1 level 1,075 = 875 Breakout Chart Target All four broad indexes closed at new 52-week closing highs on Tuesday. The COMPQ wasled by strong moves from GRMN, AAPL, MRVL, EBAY and SHLD. The INDU was led by pharmaceutical stocks MRK and PFE. DD also broke of a narrow horizontal trading range of the past two weeks. IBM rose on Tuesday in anticipation of good earnings and reported after the close better than expected earnings and raised its 2010 guidance. After-hours trading gave back Tuesday pre-announcement gains. Watch Wednesday morning to see how traders react in a regular trading hours. As both an INDU and SPX component it will have impact on the broad indexes. CREE which sold off big on Friday rose $5.91 or 10.90% in after-hours trading after reporting better than expected earnings by e cents and raised fiscal Q3 guidance by 13 to 16 cents. CSX reported earnings one cent better than expected, but it included a tax benefit of 4 cents. Shares were down -$1.65 in after-hours trading. During the day C rose as they reported that Q4 loss narrowed and loans appear to have stabilized. FAST, this morning, reported earnings that missed estimates by one cent. FAST gapped lower and rose from its open but finished lower for the day. HDB released positive earnings over the holiday and rose $9.96 or +7.74% on Tuesday. Wednesday Key Earnings to Watch: AMR, BAC, COH, EBAY, LOGI, MS, NTRS, STX, SBUX, STT, USB, WFC, XLNX Reactions to earnings from financial stocks C, BAC, MS, NTRS, STT, USB and WFC will be important and hold the key to whether the SPX can move above this past week’s high. With C up and forming a bullish engulfing pattern on Tuesday, we will look to more reports on Thursday a big day for financials. XLF and FAS both rose, with FAS forming a strong piercing line pattern that was almost a bullish engulfing pattern. ZION rose over 5% in front of earnings on Jan 25. Dave’s Insight: The principles of Great Trading remain the same from week to week. Markets may changes but correct principles remain the same. Guidance: Earnings reaction is more important over earnings than the current technicals on the chart. Follow your strategies as a stock moves into its earnings release. Watch for support bounce and breakout follow through after many support bounces and breakouts on Tuesday. Stay with your up trending positions. Continue to raise your stops. Stay with trends that have broken above resistance. Continue to focus on and trade setups on the charts of the stocks you watch and follow your rules. AAPL +9.11 QCOM +0.79 GOOG +7.62 BIDU -26.84 NDX 100 stocks stronger than the NDX include: GRMN, AAPL, LBTYA, MRVL, HOLX, VRTX, EBAY, SHLD, WCRX, ADBE, MICC, CEPH, DELL, PPDI, FLEX, JOYG, SRCL, AMGN, AKAM, RYAAY, ST, GENZ, CERN, CELG, ROST, CA, BIIB and NVDA. Stocks to Watch on Wednesday Leading Stocks Holding Above 30 DMA MA, DLB, DE, ALGT, GR, SYNA, PCP, TDG, X, UAUA, WHR, URE, DHR, CBST, SNDK, AMED, CAM, GMCR, HANS, SWN, ESI, JEC, VAR, UYG, MOS, BUCY, ACN, DECK, DOW, FAS, USO, WFC, ATW, BA, BAC, BYI, CAT, CEDC, CHL, FCX, HEAT, UNP, ZION, FLS, FUQI, HLF, K, MHS, MCD Moving Above 30 DMA = 6 AGU, HDB, ICE, IPI, WLT, WMT Moving Below 30 DMA = 1 UNG Staying Below 30 DMA BKC, WAB, USD, PWRD, GS, CREE, AMD, AMX, CGA, GES, MON, POT, TSL, BDX, MYGN, WCG, SPG, VPRT, GME, MELI, PCLN, FAZ, NFLX Intermediate Term Market Trend: Up Short Term Market Trend: Up

Futures Point to a Flat Opening...NQ Futures Higher...

BMO – ES -1.50 and NQ +4.50 futures are mixed in pre-market trading pointing to a flat open. AAPL +1.84, AMZN -0.81, GOOG +1.00 and BIDU -9.18 are mixed in pre-market trading. The Euro is down 107 pips in overnight trading creating a short term reversal in the dollar. Oil is down 45 cents in electronic trading. XLE is down 11 cents in pre-market trading. SPY is down 11 cents in pre-market trading. XLF is down 6 cents in pre-market trading. Continue to watch XLF as a key to sustain the breakout in the SPX which it is not doing this morning. There is still a 1,234 chart target for the end of January. Without a strong positive reaction to earnings this week and next we don’t see this target being achieved by the end of January as we stated in Friday’s post. Remember direction and price target are more important than time. Follow your rules in any trading actions today. Be logical. Watch for potential support bounces today. Key earnings today include: C, CREE, CSX, FAST, IBM SPX Support = 1,125 – 1,133, 1,106 - 1,117 Resistance = 1,145, 1,155, 1,170 Trading Down: INFY, AMZN, CAT, TSL Trading Up: X, POT, AAPL, BUCY, AGU Look at these Charts… (click image to enlarge) At the Open on Tuesday SPY – QQQQ – FAS – AA – SHLD – X – AAPL – AKAM – AMZN – CREE – NVDA – RIMM – BUCY – DECK – FWLT – ISRG – PCLN – STLD – UAUA – ACN – AGU – AMD – CAT – DE – DOW – MA – PCP – POT – UNP – WHR –

SPX Pulls Back From Resistance...Holds at Support

You might remember when I shared a link on Susan Boyle…well have you heard of Sundiata Gaines? Click here to see this extraordinary performance… http://www.youtube.com/watch?v=tMWO7t0b7d8 Here’s the rest of the story…At the time this shot was made, Gaines had been in the NBA 10 days…had played in four prior games for a total of 38 minutes and scored only 12 points, had taken only four 3-point shots and missed all four. This was his fifth game in which he played 9 minutes and scored 9 points including this game winner. Yes, people can accomplish something they have never done before! DJIA 10,609.65 -100.90 -0.94% SP500 1,136.03 -12.43 -1.08% COMPQ 2,287.99 -28.75 -1.24% Russell 2000 637.96 - 8.47 -1.31% Exchange NYSE NASD Advancing 939 716 Declining 2,119 1,999 Oil $78.00 -1.39 Gold $1,130.10 -12.50 SOX 344.67 -12.29 VIX 17.91 +0.28 The VIX moved up and did confirm the move down in the SPX on Friday. The SOX moved down and did confirm the move down in the COMPQ. Strongest Sectors: XLP -0.48%…XLU -0.64%...XLV -0.68% Weakest Sectors: XLF -2.03%...XLK -1.39%...XLI -1.29% All nine sectors moved lower on Friday as selling was broad. Consumer Staples, Utilities, Healthcare, Materials, Energy and Consumer Discretionary were stronger than the SPX -1.08%. SPX Chart Signals Target: 1,234 end of January. This is not a subjective forecast; rather it is the chart target price and time based on the mid July breakout at 950. After seeing the early market reaction to the earnings announcements on AA, INTC and JPM, we conclude that unless stocks rise in reaction to up coming earnings from AXP, BAC, IBM, GOOG the January target date will NOT be achieved. This appears similar to the 1,075 price target for mid-August that was not achieved until mid-September. Stay tuned for earnings reactions next week... Sector Watch Up Trending: XLK, XLB, XLY, XLV, XLP, XLE, XLI, XLU Horizontal Breakout: XLF Sideways: Down Trending: Key Resistance Levels: 1,145 = 1,133 BO chart target – Dec 31 Low 1,155 = chart target Key Support Levels 1,025 - 1,133 = 1,075 BO chart target - Sep 08 Low 1,119 = December High 1,105 - 1,113 = November High 1,101 = October High 1,087 = Nov 10 Channel low 1,082 = Nov 9 S1 level 1,075 = 875 Breakout Chart Target Monday is a holiday and markets will be closed. On Friday the broad indexes pulled back from resistance on above average volume, though there was a late rally that created a lower shadown on many candles. As stated above a major portion of the sell off seemed in reaction to earnings on INTC and JPM. In both cases sellers seemed to find a reason to sell even though the earnings numbers were better than expected. When the markets open on Tuesday, earnings will be the key factor for market direction next week. HDB released positive earnings and look for movement to the upside on Tuesday. Tuesday Key Earning to Watch: C, CREE, CSX, FAST, IBM Wednesday Key Earnings to Watch: AMR, BAC, COH, EBAY, LOGI, MS, NTRS, STX, SBUX, STT, USB, WFC, XLNX Reactions to earnings from financial stocks C, BAC, MS, NTRS, STT, USB and WFC will be important and hold the key to whether the SPX can move above this past week’s high. Guidance: Earnings reaction is more important in the short term than the current technicals on the chart. Follow your trading strategies as a stock moves into its earnings release. Watch for potential support bounce or support break entry opportunities. Stay with your up trending positions. Continue to raise your stops. Stay with trends that have broken above resistance. Continue to focus on and trade setups on the charts of the stocks you watch and follow your rules. AAPL -3.50 QCOM +0.16 GOOG -9.85 BIDU +3.45 NDX 100 stocks stronger than the NDX include: CHKP, BIDU, SHLD, SPLS, HOLX, SYMC, CTXS, QCOM, ATVI, APOL, ISRG, CHRW, AMGN, GILD, COST, PCLN, ILMN, ADBE, LOGI, AMZN, GRMN, HANS, SIAL, CMCSA and MSFT. Stocks to Watch on Tuesday Leading Stocks Holding Above 30 DMA MA, DLB, DE, ALGT, GR, SYNA, PCP, TDG, X, UAUA, WHR, URE, DHR, CBST, SNDK, AMED, CAM, GMCR, HANS, SWN, ESI, JEC, VAR, UYG, MOS, BUCY, ACN, DECK, DOW, FAS, USO, WFC, ATW, BA, BAC, BYI, CAT, CEDC, CHL, FCX, HEAT, UNP, ZION, FLS, FUQI, HLF, K, MHS, MCD, UNG Moving Above 30 DMA = 0 Moving Below 30 DMA = 11 BKC, ICE, WAB, WMT, USD, PWRD, IPI, GS, AGU, CREE, WLT Staying Below 30 DMA AMD, AMX, CGA, GES, MON, POT, TSL, BDX, HDB, MYGN, WCG, SPG, VPRT, GME, MELI, PCLN, FAZ, NFLX Intermediate Term Market Trend: Up Short Term Market Trend: Neutral