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…
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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…
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Among stocks giving back initial gains include AAPL, AMZN, MSFT, CHKP, XLNX and STT.
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
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
6 comments:
Aloha Dave
I've been trying to work on one of your comments in today's post for a while now but would love to hear any more guidance or thoughts of wisdom around the it.
Your comment --> "SPX Support and Resistance levels. We hope you are using them in your trading decisions."
But, when trading the chart of the stock your trading, how or what has more weight and when? (ie. All the support bounces and breakouts that are failing)
As always, thanks for sharing.
Mahalo
john
Dave,
Thank you so much for your in depth commentary of the recent market action. It's always appreciated as well as the weekly market wrap show every Friday.
Thank you,
Peggy
PS) John, I personally give more weight to the chart of the underlying that I'm trading, while constantly being aware of the price action of the ES/SPX. They say a falling tide sinks all ships, so if you are trading anything to the upside, I'd tighten stops or do what you can to lock in profits. Depending on your time frame. Dave nailed it, short term the market direction is down. I'd love to hear Dave's thoughts on this.
John,
Dave reviewed support and resistance in the 1.25.10 Monday Night AT Capstone, support and resistance, with the X trade. Peggy is 100% correct you must look at the ES / SPY, for market direction, where 75% of stocks follows.
Peggy, Jim
Thanks for your comments.
On the X trade, I was very happy with what I got. Sold calls against it 3 times plus with my entry and exits on the long position, I was up over 1000%.
I try to give the appropriate amount of weight to the SPX and not just the charts of what I'm trading. When at support/resistance, I usually tighten stops of adjust accordingly. What usually happens though is many of the leading stocks will break one way or the other before the index itself does and then speed up or pull back hard along with the other 75% as the index moves it's direction.
Maybe the thought around SPX support/resistance this time as I think more about it should take on more relevance as we were at a more significant area of longer support/resistance and maybe my rules need to account for that.
But I always like to ask Dave what else he sees, looks for and why. Trying to be a sponge and suck out 30+ years of his experience to significantly shortem my learning curve.
john
John,
That's a good insight. I've found one of the hardest things to do is judge the movement of the stock chart compared to the overall market movement that will influence 75% of the stocks. I've tried both ways....giving a lot of influence to market direction and taking fewer or more trades because of it, as well as just deciding mostly to take the trade or not due to the stock chart. Haven't found the best balance yet but am working on it. Anyone else?
John:
Nice job.
Can you please tell us about your entry/exit dates on X ?
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