SPX Continues Supports Bounce...

DJIA 10,058.64 +150.25 +1.52% SP500 1,070.52 +13.78 +1.30% COMPQ 2,150.87 +24.82 +1.17% Russell 2000 595.17 +8.68 +1.48% Exchange NYSE NASD Advancing 2,398 1,918 Declining 667 763 Oil $73.75 +1.86 Gold $1,076.70 +11.00 SOX 323.41 +4.55 VIX 26.00 -0.51 Index Direction Confirmation VIX Down Yes – SPX SOX Up Yes – COMPQ Strongest Sectors: XLB +2.43%…XLE +2.10%...XLI +1.93% Weakest Sectors: XLV +0.78%...XLK +0.86%...XLU +1.01% All nine sectors moved higher on Tuesday. Materials, Energy, Industrials and Consumer Discretionary were stronger than the SPX +1.30%. Sector Watch Up Trending: XLK, XLB, XLY, XLV, XLP, XLI, XLU Horizontal Breakout: Sideways: XLF, XLE Down Trending: Key Resistance Levels: 1,075 = 875 Breakout Chart Target 1,082 = Nov 9 S1 level 1,087 = Nov 10 Channel low Key Support Levels 1,044 - 1,050 = Oct 08 High The SPX regained Monday’s losses, formed a higher high and higher low, had it highest closing level since last Wednesday and confirmed Friday’s hammer. In addition to being at horizontal support, forming a hammer on Friday that was confirmed on Tuesday, forming a potential W bottom pattern, all four broad indices are forming a bullish divergence on the MACD histogram. We know this market can’t go up J, but some positive technical evidence is beginning to accumulate. Look at these Charts… (click image to enlarge) The rally was broad based as advancers led decliners by more than 3 to 1 on the NYSE. All nine sectors moved higher with Materials once again leading all sectors. Airline stocks literally took off today with XAL rising 7.74%. UAUA reported unit revenues that were more than double analyst estimates. Look at these Charts… (click image to enlarge) Guidance: The SPX closed higher and did confirm Friday’s hammer on Tuesday. See Friday’s post for a chart and explanation of Friday’s large hammer in comparison with June 2006. Technical evidence is increasing for a support bounce continuation. Stay prepared however for a break of support. The short term trend is neutral. The four-month trend is sideways. The twelve-month trend is up. Continue to focus on and trade setups on the charts of the stocks you watch and follow your rules. There are more bearish setups than bullish at this time, however with the SPX at a strong support level, the 1,044 area; growing bullish technical evidence suggests it would be wise to prepare for a potential support bounce similar to the bounces in July and November of last year. There are a few up trending stocks. If you have not yet been stopped out of your up trending positions, continue to raise your stops. AAPL +2.07 QCOM +0.40 GOOG +2.97 BIDU -8.22 NDX 100 stocks stronger than the NDX include: CTSH, RYAAY, INFY, STLD, MICC, NIHD, SIAL, URBN, SPLS, PCAR, FAST, JOYG, DTV, BRCM, CTXS, XRAY, FLEX, PCLN, BIIB, FWLT, LBYTA, LRCX, EXPE, NWSA, CERN, HSIC, ADSK, PDCO, FSLR, ORLY, DISH, CHKP, ORCL, CSCO, NTAP, KLAC, INTC, ALTR and EXPD. Stocks to Watch on Wednesday Holding Above 30 DMA ALGT, CBST, ZION, FAZ, DLB, NFLX, AMED, CHL Moving Above 30 DMA = 5 BA, GMCR, MCD, UAUA, VPRT Moving Below 30 DMA = 0 Staying Below 30 DMA CEDC, VAR, CREE, K, MYGN, TDG, WFC, WHR, WMT, GR, ESI, SNDK, DECK, HANS, JEC, MA, BYI, ACN, FLS, UNG, BUCY, DE, DOW, FAS, HLF, SYNA, UNP, UYG, X, ATW, CAM, HDB, MHS, MOS, PCP, URE, GS, HEAT, CAT, FCX, BAC, DHR, AGU, FUQI, ICE, IPI, SWN, USO, WLT, BKC, WAB, USD, PWRD, AMD, AMX, CGA, GES, MON, POT, TSL, BDX, WCG, SPG, GME, MELI, PCLN Intermediate Term Market Trend: Neutral = 3 months, Up = 10 month Short Term Market Trend: Neutral