SPX Support Bounce...All 100 NDX Stock Move Higher...

DJIA             10,269.47 +254.75     +2.54%
SP500            1,080.96   +30.96     +2.95%
COMPQ          2,176.81   +62.81     +2.97%
Russell 2000      624.99   +22.93    +3.81%

Exchange     NYSE     NASD
Advancing    2,663      2,204
Declining         426        480

Oil              $74.04 +2.12
Gold       $1,245.70 -4.60
SOX           316.75 +9.26
VIX              23.89  -2.16

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

Leading stocks on Wednesday included FAS, CRUS, BUCY, NFLX, WLT, ATI, SWK, URE, CLF, BAC, PCP, CRM, FCX, CMG, USD, DECK, FLS, PCLN, UCO, TSL, DE, WHR, SNDK, STI, DOW, A, NYX, ATW, UNP, LXK, TIE, ZION, CAT, DHR, X, AKS, GR, PNC, SINA, FDX, AMX, AIV, CAM, VMW, ICE, JEC, FFIV, BYI, UPS, LVS, SPG, UAUA, VECO, CREE, HAS, NDAQ, USO, RMBS, RVBD

If you have been listening, reading or paying attention to anything I have said, written or shown lately you know that I have been emphasizing that the intermediate term trend has been sideways for months and that it was currently at support.

What do sideways trends do? They bounce up from support and bounce down from resistance.

I have gone as far to point out that recent support bottoms took several days to bounce and to be prepared for when it did bounce.

Well today the market bounced and what a bounce it was. All 100 stocks in the NDX 100, all 30 stocks in the Dow 30 and 494 of the 500 stocks in the SPX moved higher. You have to go back to July 7 to find a large white candle as large as today’s.

July 7? That happened to be a bounce at support in the same sideways trend.

Why is Dave always repeating the basic principles of technical analysis?

Because the principles continue to be work again and again.

What are those principles?

1. History repeats itself.
2. Prices move in trends.
3. Market action prices in everything.

All four broad indexes had a major rally breaking through last Friday’s short term resistance. The RUT was the largest gainer. The SPX, INDU, RUT and COMPQ closed just below their 30 DMA and could break through on Thursday.


Wednesday’s rally was broad as all sectors moved higher with the largest gains in Industrials, Financials and Energy. Advancers led decliners 6 to 1 on the NYSE. Monday’s pullback was on low volume. Today’s breakout was on a 59% volume increase of Monday’s volume in the SPY.

INDU - large white candle breakout short term target 10, 383
SPX - large white candle breakout short term target 1,091
COMPQ - large white candle breakout short term target 2,210
RUT - large white candle breakout short term target 638

Twenty two of the twenty Support Bounce Setups bounced higher on Wednesday – CLF, NFLX, CRM, VMW, LXK, CMG, HANS, HLF, PCLN, RVBD, AGU, MCD, FFIV, LVS, NTES, AKAM, NTAP, BIDU, MRVL, INTU, CAM, QCOM

Bounce Setups – GMCR, MOS, POT, CSTR

Stay focused on and trade according to the chart on Thursday.
Guidance:
SPX
Resistance: 1,086, 1,100, 1,115
Support: 1,071, 1,056, 1,041

Expect volume to lighten up late Thursday and on Friday as traders begin to wind down for the three day Labor Day weekend. That doesn’t mean the market won’t go up however. Last year the SPX rose 20 points on Thursday and Friday before the three day weekend. Markets are closed on Monday.

Look at Wednesday’s S1 level as key short term support.

Look to enter bullish trades with a breakout of horizontal resistance or a bounce off support and a break above the high of the low day.

Wait to enter bearish setups with a new bounce down from resistance; bounce down from the 30 DMA or break of support

The VIX fell -2.16 to 23.89 falling below the benchmark 25 level and increasing the probability of continuation of the support bounce.

The short term 3 day trend is up.
The three-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 +7.23 – large white candle, breakaway gap
QCOM +1.29 – white candle rise to horizontal resistance
GOOG +10.31 – white candle confirms doji
BIDU +3.41 – white candle confirms piercing line, breakaway gap

NDX 100 stocks stronger than the NDX include: EXPE, LINTA, JOYG, AMZN, PCAR, STX, ERTS, PCLN, FLEX, STLD, CEPH, CMCSA, VRTX, JBHT and BIDU.

Stocks weaker than the NDX: GENZ, DTV, NVDA and TEVA.

Stocks to Watch on Thursday
Holding Above 30 DMA
TLT, HANS, HLF, PCLN, RVBD, AGU, MCD, POT, FFIV, LVS, NFLX, FAZ, VMW, CMG, NTES, CRM, TSL, CLF, FCX, SINA, SPG, VOD
Moving Above 30 DMA = 16
AIV, BUCY, CAM, DE, DHR, DLR, DOW, HSY, NYX, PCP, SWK, UNP, UPS, URE, WLT, WMT
Moving Below 30 DMA = 0

Staying Below 30 DMA
A, BYI, JEC, CHL, GES, GMCR,CSTR, FDX, HAS, LXK, NDAQ, GR, IPI, RMBS, X, AKS, AMX, FLS, GME, GS, MA, SNDK, BA, CRUS, ACN, ATI, CREE, DECK, FAS, STI, TIE, UCO, USO, V, ICE, USD, PNC, SWN, ZION, UNG, WFMI, NETL, SKX, AMD, NTRI, ESI, MHS, WHR, BAC, CAT, VECO
Intermediate Term Market Trend: Neutral
Short Term Market Trend: Up