SPX Closes Below 1,200...

DJIA                            11,018.66 -125.91 -1.13%
SP500                           1,192.13   -19.54 -1.61%
COMPQ                         2,481.26  -34.43 -1.37%
Russell 2000                    714.62     -9.59 -1.32%

Exchange                   NYSE              NASD
Advancing                     571                 729
Declining                    2,478              2,149

Oil         $82.95          -2.56
Gold    $1,159.70      +0.70
SOX      393.75          -5.11
VIX          18.36        +2.47

Index  Direction       Confirmation
VIX      Up                   Yes – SPX
SOX    Down               Yes – COMPQ

Strongest Sectors: XLP-0.43%…XLV -0.60%...XLU -1.16%
Weakest Sectors: XLF -3.65%...XLB -1.72%...XLE -1.69%

All nine sectors moved lower on Friday. Consumer Staples, Healthcare, Utilities, Consumer Discretionary and Technology were stronger than the SPX -1.61%.

Sector Watch
Up Trending: XLY, XLI, XLP, XLF, XLK
Horizontal Breakout:
Sideways: XLB, XLE, XLV, XLU
Down Trending:

Key Resistance Levels
1,200 = Jul 2008 support
1,216 = Fib extension
1,220 = Sep 25, 2008 resistance
Key Support Levels
1,178 = Fib extension
1,155 = 1,119 BO chart target – Dec 23

After the close on Thursday GOOG,ISRG and AMD all reported better than expected earnings but failed to generate a positive reaction to the stock price. GOOG with the questions surrounding China and ISRG which had already moved $60 in the six trading days before earnings may certainly have been buy the rumor, sell the news situations. AMD which netted the smaller loss of the three perhaps was a result of the general market moving lower.

Before the open GE -2.72%, reported continuing operations 21 cents vs 16 cents estimates but sales and orders were below estimates. BAC -5.49%, reported diluted 28 cents vs 9 cents estimates.

The SEC (we're not talking college athletics here) announced a suit against GS -12.79% for alleged activities in mortgage derivatives. The announcement sent GS financial stocks and the broad market lower.

The SPX did recover from its lows but not before breaking below its 1,200 support level.

Look at these Charts

(click image to enlarge)

It appears that the key driver of stock prices next week will be big money reaction to the earnings announcements. If companies beat estimates and raise guidance those stocks will have a chance to move higher. If stocks miss estimates or fail to raise guidance those stocks may be set up for negative reaction and lower stock prices.

Key Earnings to Watch:

Monday – AKS, BNI, BIIB, KO, FUQI, GS, IBM, RF, STT, STLD, ZION

Tuesday – ALGT, AAPL, BK, CREE, DAL, FCX, GILD, JNJ, MCD, MICC, MS, PCAR, UTS, WFC, YHOO

Wednesday – ABT, ALK, AMGN, T, BA, CTXS, DHR, EBAY, GENZ, GR, ESI, KEY, LRCX, NFLX, BTU, QCOM, SNDK, SBUX, TER, VZ, VRTX

Thursday – AMZN, AXP, BUCY, CAL, DECK, HON, MSFT, NUE, PEP, TRV, UNP

Friday – FLIR, SLB

Postives Reactions this Past Week:

Look at these Charts

(click image to enlarge)

Guidance:
The SPX broke 1,200 support and closed at 1,192 forming a large black candle and an evening star pattern that we alerted you to in Thursday's post.

Our Yellow Alert turned Red on Friday for short term traders.

Continue to trade with the trend. Be mentally flexible and be willing to trade when your entry and exit signals appear.

The intermediate term chart target is still 1,255 in approximately nine weeks after the 1,150 breakout on March 16.

The VIX rose +2.47 and did confirm the lower close on Friday.

The short term trend is up.

The four-month trend is up.

The twelve-month trend is neutral.

Continue to focus on and trade setups on the charts of the stocks you watch trade with the trend and follow your rules.

If you had been adjusting your stops according to your rules you may have been stopped out on Friday. Continue to adjust stops.

AAPL -1.52

QCOM +0.04

GOOG -45.15

BIDU -16.59

NDX 100 stocks stronger than the NDX include: ESRX, FLIR, GENZ, PPDI, ATVI, APOL, GILD, VRTX,LRCX, PDCO, ERTS, KLAC, CERN, CELG, INTU, COST, AMAT, AMGN, QCOM, NIHD, LIFE, LLTC, SRCL, NWSA, HSIC, ILMN, CTXS, ROST, MCHP, HANS, LINTA, ORLY, TEVA, DELL, AAPL, MSFT, SBUX, HOLX, CSCO and CTAS.

Stocks to Watch on   Monday

Holding Above 30 DMA

CBST, DLB, NFLX, UAUA, CREE, WHR, WLT, PCLN, PCP, GR, BUCY, UNP, CAT, V, CLF, ESI, DE, UNP, V, BAC, DE, DHR, URE, JEC, GES, TDG, FAS, UYG, X, USD, SNDK, MELI, FLS, HDB, HLF, VAR, DOW, AMD, AMX, WFC, CEDC, MA, ZION, BKC, MCD, GME, TSL, BYI, USO, CAM, SYNA, ATW, STT, CHL, SWK, ACN, WAB, ALGT, AMED, ESI, K

Moving Above 30 DMA = 0

Moving Below 30 DMA = 9

DECK, GMCR, ICE, SWN, GS, BA, FCX, SPG, ATI

Staying Below 30 DMA

X, BDX, WMT, HANS, MHS, WCG, PWRD, AGU, MYGN, IPI, POT, MOS, HEAT, VPRT, CGA, FUQI, FAZ, UNG, MON

Intermediate Term Market Trend: Up

Short Term Market Trend: Neutral