SPX and COMPQ Another New High Close...Financials Lead Again...

The SPX closed up +4.79 or +0.39% on Friday its highest close, 1,225 since September 19, 2008.  Volume was strong as the SPX finished its largest weekly trading range, 49 points, since the first week of September.  The COMPQ also made a new high close…

(click image to enlarge)

Financials XLF were the strongest sector for the third straight day on heavy volume a clear sign of money rotating into this sector…CRUS gained +7.18% after announcing a share repurchase program…Breadth was positive but down from Thursday as advancers led decliners by 1.41 to 1 on the NYSE and 1.25 to 1 on the NASDAQ…

Exchange     NYSE    NASDAQ
Advancers    1,755      1,481
Decliners      1,244      1,180

(click image to enlarge)

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

Leading stocks on Friday included CRUS, DECK, FAS, FLS, PNC, CMG, JEC, TBT, ZION, GS, NTES, ESI, X, USD, AIV, SNDK, ICE, AKS, PCLN, GES, ATW, RMBS, GMCR, URE, BAC, SPG, BUCY, FFIV, NYX, CLF, TSL, NDAQ, FDX, UNG, PCP, CAM, SINA, A, CF, AMX, FCX, HANS, WLT, UCO, DHR, INFA

Losing stocks included FAZ, WFMI, TLT, LXK, MHS, SWN, IPI, DOW, HSY, CRM, ARUN, BYI, POT, NETL, UNP, CREE, NTRI, SOHU, MOS, V, CAKE, VECO

Interest rates rose, bonds moved lower, the Euro fell and the SOX moved up +0.58%. The VIX moved down -0.26 to close at 18.26, its lowest close since April 26.

Five of nine sectors moved higher on Friday with Financials XLF +2.29% and Industrials XLI +0.60% leading all sectors. Utilities, Technology, Consumer Staples and Healthcare moved lower, which appears to be rotation to currently stronger sectors.

Four weeks ago I alerted you to be prepared for a grinding index as institutions became more selective and bought stocks with strong earnings and sold stocks with weak earnings or guidance. Two weeks ago I alerted you to be prepared for rotation into financials. A week ago I said with earnings season about over that the SPX would have a hard time breaking horizontal resistance without rotation into financials and to stay focused in preparation for that potential.

This week we saw rotation into Financials, Semiconductors, Energy and small cap stocks in a big way.  It was also clear on many charts that at least some profits were coming out of other stocks and sectors.

What does rotation out look like? Look at the weekly chart on BIDU, NFLX, XLU and XLV to see.

(click image to enlarge)

What does rotation in look like? Look at the weekly chart on XLF, SMH, XLE and IWM to see.

(click image to enlarge)

Charts to Watch – Rotation Breakouts WFC, X, SNDK, ZION, GS, C, F, AMD, BUCY, CAT, SINA

(click image to enlarge)

Charts to Watch
Flag Setups – NFLX, STX, UAL, UNP, CRM, WFMI, MOS, IPI, AGU, SOHU
Breakouts and Setups – DE, VECO, MAR, INFY, ISRG, LZ, ILMN, URE, AKAM
Potential Bearish Setups – CREE, TIE, TLT, FSLR, APOL, EAT

Continue to trade with the trend and simultaneously be prepared for any break of support.

SPX
Resistance: 1,220, 1,234, 1,250
Support: 1,209, 1,200, 1,190

Enter bullish trades with a bounce off support and a break above the high of the low day or a break out of horizontal resistance.

Wait to enter a bearish signal for a close below of the low of the high day.

The short term 3 day trend is up.
The two-month trend is up.
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 -1.14 – potential bearish harami at horizontal resistance
QCOM -0.01 – white candle after earnings gap on Thursday
GOOG +0.81 – spinning top
BIDU -1.26 – black spinning top, still test of support

NDX 100 stocks stronger than the NDX include FWLT, SYMC, SBUX, ERTS, STX, EBAY, PCLN, URBN, IACI, LINTA, FSLR, NVDA, JOYG, MRVL and INTC.

Stocks weaker than the NDX: ATVI, RIMM, GRMN, MXIM, LBTYA, CELG, GILD, NIHD, NWSA, WCRX, SHLD, BIDU, HOLX, CEPH and ADBE.

Stocks to Watch on Monday
Holding Above 30 DMA
HLF, PCLN, AGU, MCD, LVS, CMG, FCX, SINA, VOD, AIV, CAKE, CAM, DE, DHR, DOW, UNP, URE, WLT, A, HAS, IPI, ICE, ATW, SLB, ACN, AMX, NDAQ, UAL, USD, MA, AMD, V, ATI, BA, DECK, GR, UCO, CF, GS, SPG, HANS, MOS, VECO, CSTR, RVBD, TBT, WFMI, NYX, NFLX, NTES, PCP, PNC, BYI, INFA, MHS, NETL, CRM, FFIV, GMCR, ARUN, SWN, CAT, CLF, POT, JEC, FAS, GME, NTRI, SWK, X, FDX, SNDK, BUCY, CHL, CREE, RMBS, STI, TSL, ZION
Moving Above 30 DMA = 2
GES, AKS
Moving Below 30 DMA = 0

Staying Below 30 DMA
HSY, POT, ESI, FLS, SKX, WHR, LXK, TIE, FAZ, BAC, CRUS, TLT, DLR, VMW, UNG

Intermediate Term Market Trend: Up – 2 months
Short Term Market Trend: Up