SPX Bounces From Low...Closes Slightly Lower...

On Monday the SPX sold off to near its Nov 16 low where buyers once again stepped up sending the SPX back near last Friday’s close.  The SPX closed at 1,187, down -1.64 or -0.14%, the COMPQ moved down -9.34, the INDU fell -39.51.  The RUT closed -0.78 on Monday closing above last Wednesday’s S1 level.

Breadth strengthened on Monday but remained negative as decliners led advancers 1.36 to 1 on the NYSE and 1.21 to 1 on the NASDAQ…

Exchange     NYSE     NASDAQ

Advancers    1,255       1,204
Decliners       1,719       1,456

Index     Direction     Confirmation
VIX          Down             No – SPX
SOX        Down             Yes – COMPQ

Leading stocks on Monday included SINA, FDX, UCO, NFLX, VECO, FCX, CREE, CAM, DLR, ATW, FAS, ESI, BAC, SLB, ATI, HLF, X, AKS, TIE, LVS, TLT, STI, GS, AKAM, UNP, DECK, SNDK, SKX, CMG, MHS, POT, SWN, MCD, PNC, VMW

Losing stocks included GES, UNG, ARUN, HANS, UAL, AMD, MOS, A, GME, TSL, TBT, CSTR, V, RVBD, FAZ, GMCR, PCLN, HAS, DHR, CRM, ZION, HSY, PCP, DE, SOHU, FLS, NTES, INFA, BA, FFIV, GR, CF, IPI

Interest rates moved lower, bonds moved up, the Euro moved lower and the SOX closed slightly lower -0.88% closing above its horizontal breakout on Wednesday. The SOX is a leading group at this time. The VIX moved down -0.69 to close at 21.53.

SPY jumped to a more normal volume of 223.5 million shares up from 76 million shares on Friday.

Three of nine sectors moved higher on Monday with Materials XLB +0.86% and Financials XLF +0.83% leading all sectors. XLB and XLF reversed being the weakest sectors on Friday.

The SPX continued its consolidation of the past three weeks falling to its Nov 16 support before rising to form a hammer by the end of the day. Over the past two weeks the SPX has traded in a tight 27 point trading range.

Consolidation is generally a trend continuation pattern. So if the support low of Nov 16 is NOT broken look for this consolidation to ultimately resolve to the upside.

During the consolidation of the past two weeks the market has become more selective with the small cap RUT, semiconductors SOX and Consumer Discretionary XLY performing relatively stronger. Individual stocks from our watch list like CMG, DECK, CSTR, RVBD, CRM, CAKE NFLX, FFIV, AMZN, SNDK WLT, GES, SLB, GR, VECO, INFA, ALTR, NVDA, BRCM, USD, JOYG, CTXS, ROST, URBN, SPLS and MAT have also been relatively stronger.

To trade an up trend focus on those stocks that institutions are buying and causing to be relatively stronger.

The big seven were again mixed on Monday AAPL, AMZN and NFLX moved higher, BIDU, GOOG and PCLN moved lower. QCOM was down slightly. GOOG is at its horizontal at support with BIDU and PCLN well above support. Continue to watch the support levels on these stocks as a key for the COMPQ staying above support.

NFLX and AMZN made another new high close.

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

SPX
Resistance: 1,200, 1,209, 1,220
Support: 1,190, 1,182, 1,170

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. Thursday was an entry signal for many stocks.

Look for break of short term support for bearish entry signals or a bounce down from the 30 DMA.

The short term 3 day trend is neutral.
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 +1.87 – potential hanging man close above 30 DMA
AMZN +2.29 – spinning top
QCOM -0.42 – hammer in consolidation
GOOG -7.89 – black candle in consolidation at horizontal support
BIDU -1.99 – black candle close below 30 DMA

NDX 100 stocks stronger than the NDX include EXPE, AMZN, ERTS, FWLT, MXIM, NVDA, YHOO, SRCL, ADSK, LINTA, SNDK, AAPL, ESRX, VMED and TEVA.

Stocks weaker than the NDX: WCRX, FSLR, EBAY, VOD, ROST, CELG, CTXS, VRSN, MICC, SYMC, BIDU, LOGI, FLEX, PCLN and MYL.

Stocks to Watch on Tuesday
Holding Above 30 DMA
HLF, PCLN, LVS, CMG, SINA, CAKE, CAM, UNP, WLT, A, ATW, SLB, NDAQ, USD, DECK, GR, VECO, CSTR, RVBD, TBT, WFMI, NFLX, BYI, MHS, NETL, FFIV, SWN, CAT, GME, NTRI, X, CREE, BUCY, GES, HAS, MCD, UNG, ARUN, CLF, CRM, INFA, UAL, VMW, HANS, RMBS, SNDK, CRUS, FAZ, GMCR, CF, AIV, AKAM, ATI, DOW, PCP, POT, SKX
Moving Above 30 DMA = 3
FCX, FDX, UCO
Moving Below 30 DMA = 4
AMD, DHR, MOS, SPG
Staying Below 30 DMA
AMX, FLS, AKS, DE, ESI, MA, PNC, GS, ICE, JEC, NTES, FAS, IPI, LDK, ZION, AGU, BAC, URE, V, ACN, CHL, NYX, STI, SWK, TSL, BA, HSY, WHR, LXK, TIE, TLT, DLR

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