SP500 1,138.70 +15.73 +1.40%
COMPQ 2,326.35 +34.04 +1.48%
Russell 2000 666.02 +13.55 +2.08%
Exchange NYSE NASD
Advancing 2,587 2,165
Declining 483 557
Oil $81.50 +1.29
Gold $1,134.80 +2.20
SOX 351.53 +4.98
VIX 17.42 -1.30
Index Direction Confirmation
VIX Down Yes – SPX
SOX Up Yes – COMPQ
Strongest Sectors: XLF +1.94%…XLE +1.87%...XLY +1.86%
Weakest Sectors: XLP +0.62%...XLU +1.01%...XLK +1.23%
All nine sectors moved higher on Friday. Financials, Energy, Consumer Discretionary and Industrials were stronger than the SPX +1.40%.
Sector Watch
Up Trending: XLY, XLI, XLP
Horizontal Breakout:
Sideways: XLF, XLE, XLU, XLB, XLK, XLV
Down Trending:
Key Resistance Levels:
1,145 = 1,133 BO chart target – Dec 31 Low
1,155 = 1,119 BO chart target – Dec 23
Key Support Levels
1,125 - 1,133 = 1,075 BO chart target - Sep 08 Low
1,119 = December High
1,105 - 1,113 = November High
The SPX rose to its 1,112 breakout target, that we pointed out earlier in the week, of 1,138 on the point! Once again a definite reinforcement of why I have taught this technique more emphatically over the past several years that anyone else I know. It works over and over and over again. 100% of the time? No, nothing works 100% of the time.
Dave's Insight: Technical analysis is about probabilities, not certainties.
Look at these Charts...
(click image to enlarge)
The SPX have reached it's 1,138 chart target puts it right back in the 1,130 to 1,150 area of resistance that it reached in January. At resistance price can bounce down or breakout. If a trader interprets the current trend as sideways, then the greater probability is for it to bounce down from resistance. A bounce down does not have to occur in one day. Just look at January to prove that point. If this is like the bounce off the July bullish divergence low then don't be surprised to see a breakout to occur. Either way traders should be prepared for either outcome. The case for a breakout includes the RUT which is already above resistance and the COMPQ at resistance and hitting a new high close of 2,326.35 on Friday.
Economically the Unemployment report on Friday was better than expected which could be a reason why big money may decide to continue to buy at these levels this time around. A little discussed hiring index that measures the strength of hiring across 269 industries reached 48 in February, up from 44.2 in January and at 16.5 in March 2009. A reading above 50 indicates more industries are hiring than laying off workers. Perhaps another reason big money may choose not to sell. Either way watch the chart for the bounce down or breakout.
(click image to enlarge)
The support bounce rally over the past four weeks following the bullish divergence in February has been sector led by XLY, which includes retail stocks, XLI, which includes airlines and other transportation stocks and XLP. The swing sector looks once again to be XLF, financial stocks which have had a strong rally moving all the way from support to resistance. If XLF breaks out of horizontal resistance then expect the SPX to have a higher probability of breaking out. Remember back it July it was the lead and breakout of its sideways trading range by XLF that gave the strength to the SPX breakout.
(click image to enlarge)
The rally and breakout in AAPL and other leading NASDAQ stocks like AKAM, SNDK and XLNX has been another major factor in the rally of the past four weeks. Many stocks have broken out of horizontal resistance, while others have had strong moves towards resistance and still others are mid-way between support and resistance.
(click image to enlarge)
Guidance:
The SPX made a new high close at 1,138.70.
The SPX made a new high close at 1,138.70.
Friday is now the high day. The SPX has risen to the area of horizontal resistance and will either bounce down or breakout. A bounce down will be indicated by a break of the low of the high day.
While we may see a consolidation of several days in the 1,130 to 1,150 area stay prepared for either a bounce down or a breakout.
The short term 3-week trend is up.
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 trade with the trend and follow your rules.
Adjust your stops according to your rules for up and down trending trades.
AAPL +8.24
QCOM -0.49
GOOG +9.62
BIDU -3.03
NDX 100 stocks stronger than the NDX include AAPL, NWSA, LINTA, WCRX, FWLT, EBAY, ADP, AKAM, LOGI, NVDA, DISH, WYNN, JOYG, SHLD, PAYX, GRMN,SIDAL, INFY, PPDI, NTAP, LIFE,IACI, CTSH, CERN, STLD, PCAR, APOL, JBHT, SBUX, LBTYA, XLNX, URBN, LLTC, ERTS, HOLX, GOOG, ALTR, YHOO and DELL.
Stocks to Watch on Monday
Holding Above 30 DMA
ALGT, CBST, DLB, NFLX, AMED, BA, UAUA, AGU, CAM, CREE, VPRT, WHR, WLT, BDX, CAT, GR, ICE, PCLN, PCP, SPG, SWK, UNP, USO, V, BAC, DE, DHR, ESI, URE, HANS, JEC, WMT, FAS, GES, GMCR, SNDK, TDG, USD, UYG, X, DECK, FUQI, MELI, POT, FLS, HDB, HLF, MHS, MYGN, VAR, CGA, IPI, FCX, ATI, MOS, WAB, GS, DOW, AMD, AMX, WFC, ATW, HEAT, TSL, ACN
Moving Above 30 DMA = 6
CEDC, K, MA, PWRD, SYNA, ZION
Moving Below 30 DMA = 0
Staying Below 30 DMA
BKC, BYI, CHL, MCD, FAZ, UNG, SWN, MON, WCG, GME
Intermediate Term Market Trend: Neutral = 4 months, Up = 11 month
Short Term Market Trend: Up
3 comments:
Absolutely Amazing! What a Technician! Thank you Dave for your Market Analysis.
Michael V.
Another random, uncorrelated, complete coincidence . . . or maybe it's technical analysis! Great analysis Dave. Even when I'm traveling like last week and can't listen to your ATA and AIT discussions, I try to ask myself: "What would Dave say?" Stayed calm and had a great week thanks to that approach. Thanks!
Brian
1138? never heard of it!! No, I had it written in purple (with all my price targets) right on my chart. Helped me get an idea later on in the day as to where I thought we would stop. It's a wonderful thing to have the exact number written down days ahead of time and then be able to use it to your advantage on days like Friday. Thank you Dave. It's very clear and like Brain said, I also ask myself "what would Dave's target be? what advise would we give. after a while it's not so hard as Dave does say the same principles in a consistent way. (OK the jokes and the occasional songs in the trading rooms may change slightly..but that's cool) It's a very helpful teaching method and gives us confidence to do the measuring technique whenever we are looking for price targets. Thank you Dave (and Leo).
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