SPX Breaks Short Term Resistance...It Really was Up, Up and Away in a Beutiful Bounce Today...

DJIA                           10,258.99  +284.54 +2.85%
SP500                           1,103.06    +35.11 +3.29%
COMPQ                        2,277.68  +81.80 +3.73%
Russell 2000                    670.51  +27.89 +4.34%

Exchange                  NYSE              NASD
Advancing                  2,898               2,401
Declining                       221               349

Key Resistance Levels
1,101 = October High
1,105 - 1,113 = November High
1,125 - 1,133 = 1,075 BO chart target - Sep 08 Low
Key Support Levels

1,087 = Nov 10 Channel low
1,075 = 875 Breakout Chart Target
1,044 - 1,050 = Feb 8 low, Oct 08 High

A trader called me today and said that everyone he had heard recently was looking for the market to go down and that I was the only one who had been saying look for the market to rise. Why? Because I focus on the charts. I don't get subjective about the trading action, I look at what the chart is indicating every single day. I don't really care what the market is doing, I just want to observe what it is doing like a weatherman observes the weather.

I put what I observe on the line in writing and live in front of hundreds of traders every single trading day.  It's not that I'm good, it's that are the technicals are the technicals only because they are the high probability outcome based on decades of observation.  Most others just want to give into to their feelings until the herd moves and I just observe.

Another individual I know who in the last five trading days told me the market could drop to 900 was a born again bull after the 35 point rise. My point is not that people can change, rather it is that people won't look at the chart objectively until the herd moves first.

Dave's Insight:  In the long run traders who can't think accurately several moves in advance are sooner or later destined to get trampled by the herd.

I hope you were objective about the MACD bullish divergence and the other positive technicals and took advantage of rising stocks at the right time.  Did you notice that today's action was almost the exact inverse of last Thursday's action?

The SPX trader higher over night and US traders just kept buying all day long. NTAP reported stronger than expected earnings and raised their guidance, led the NASDAQ with a gain of +17.70%.

Dave's Insight: Continue to Follow Your Rules.

Guidance:
The SPX formed an large white shaven bottom candle that broke through the May 20 R1 level and closed above 1,100 and near the May 20 R2 level. The SPX closed 1,103 after rising 35 points.

Our Yellow Alert on the buy side turned green on Thursday. If you adjusted your stops according to your rules for down trending trades you may have been stopped out on Thursday.

Trade strong stocks up.

Trade weak stocks down.

The VIX fell -5.34 and closed at 29.68.

The short term trend is up.
The six-month trend is neutral.
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 of the chart and follow your rules.

AAPL +9.24
QCOM +0.68
GOOG +14.99
BIDU +5.91
NDX 100 stocks stronger than the NDX include: NTAP, BIDU, WYNN, STLD, LINTA, MICC, BRCM, NIHD, NVDA, LBTYA, LOGI, KLAC, STX, JOYG, FLEX, SBUX, SHLD, MCHP, INTC, FSLR, COST, NWSA, RYAAY, MRVL, FWLT, XLNX, BBBY, AMAT, CERN, WCRX,PCAR, ILMN,INFY, LLTC, ISRG, GILD, ADBE, ALTR, RIMM, SIAL, GRMN and IACI.

Stocks weaker than the NDX: VRTX, APOL, HOLX, GENZ, DELL, YHOO, PAYX, DISH and EXPE.

Stocks to Watch on Friday
Holding Above 30 DMA
EXBD, NTRI, FAZ, NFLX, SNDK, OSTK, AZO, WFMI
Moving Above 30 DMA = 12
ATI, CRM, DE, DECK, HAS, ICE, LVS, LXK, SYNA, UAUA, UNG, WHR
Moving Below 30 DMA = 0


Staying Below 30 DMA
ESI, BYI, DHR, GR, MCD, WMT, ZION, STI, PNC, AIV, HLF, AMD, CAT, CREE, SPG, SWK, UNP, URE, WFC, BA, JEC, CHL, GME, HANS, ACN, MYGN, AMX, DOW, FAS, FLS, PCLN, PCP, TSL, USD, USO, UYG, ATW, BAC, GES, MA, V, CAM, SWN, BUCY, WLT, CLF, MHS, WCG, GMCR, GS, FCX, X, PWRD, AGU, IPI, POT, MOS

Intermediate Term Market Trend: Neutral
Short Term Market Trend: Up