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