SPX Bounces...Bull Flags Waving...CSCO Lower After Earnings...

The SPX closed up +5.31 or +0.44%, the COMPQ rose +15.80, the INDU rose +10.29 and the RUT rose +8.89 on Wednesday.

Breadth was positive on Wednesday as advancers led decliners 1.53 to 1 on the NYSE and 2.01 to 1 on the NASDAQ…

After the close CSCO -3.09, -12.62% reported EPS of 42 cents vs. 40 cents consensus and revenues that met expectations.  CSCO lowered expectations for Q2 to 32 to 35 cents vs. consensus of 42 cents and said that challenges in business environment will be short-term.

Exchange       NYSE          NASDAQ

Advancers      1,823            1,790

Decliners        1,184               890

Index Direction      Confirmation

VIX       Down          Yes – SPX

SOX     Up               Yes – COMPQ

Leading stocks on Wednesday included UCO, ARUN, CMG, NFLX, FAS, ZION, WLT, VMW, CRM, RVBD, CSTR, BAC, DLR, URE, SOHU, FFIV, SPG, PNC, CLF, ATW, FCX, CAKE, WHR, FLS, DE, WFMI, NYX, NETL, RMBS, V, UNP, AIV, AKS, NTRI, CAM, SNDK, SLB, X

Losing stocks included LVS, FAZ, UNG, BA, TSL, AMD, DECK, VECO, PCP, GMCR, TIE, ESI, HANS, BYI, CF, LXK, CREE, GR, SKX, A, HSY, AGU, PCLN, DOW, CRUS, USD, HAS, GME, MOS

Interest rates fell, bonds inched higher, the Euro rose and the SOX closed near unchanged +0.01%.  The VIX moved down -0.61 to close at 18.47.

Five of nine sectors moved higher on Wednesday with Energy XLE +1.29% and Financials XLF +1.12% leading all sectors.  Healthcare, Consumer Staples and Utilities were the weakest sectors.

The SPX bounced off of Thursday’s S1 support and rose to close near the low of its Nov 5 high day.  All four indexes and numerous stocks have formed bull flags and many of those bull flags formed hammer candle patterns on Wednesday.

Flag Entries on Wednesday – NFLX, BIDU, CRM, CTXS

Charts to Watch

(click image to enlarge)

Flag Setups – DOW, JOYG, HUM, SINA, X, WYNN, FCX, FAS, USD, BYI, CSTR, GR, IPI, PCP, SLB, UAL, UNP, AMD, DECK, AGU, SOHU, VECO, MAR, INFY, ARUN, AIV, AKAM, CAKE, CLF, ILMN, NYX, PCLN, PNC, RMBS, SNDK, SPG, URE, V,  WLT, LVS

Breakouts and Setups – DE, ISRG, VMW, LZ, ZION, AAPL, AMZN, CHKP, ORLY

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.

Wednesday rallied after Tuesday a close below the low of the high day which wasa potential exit signal for some bullish short term traders.

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

The short term 5 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 +1.95 – spinning top in horizontal flag at resistance

QCOM -0.24 – spinning top gap support

GOOG -1.94 – doji

BIDU +2.50 – white candle, bounce support in narrow price channel

NDX 100 stocks stronger than the NDX include RIMM, CTXS, FWLT, BIIB, BIDU, ROST, AMZN, CHKP, STLD, FLIR, ADSK, JBHT, ORLY, PPDI and INFY.

 

Stocks weaker than the NDX: LOGI, WCRX, LRCX, FLEX, STX, VRSN, RYAAY, ERTS, HANS, MRVL, GENZ, CHRW, IACI, APOL and INTC.

Stocks to Watch on Thursday
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, DECK, GR, UCO, CF, GS, SPG, MOS, VECO, CSTR, RVBD, TBT, WFMI, NFLX, NTES, PCP, PNC, BYI, INFA, MHS, NETL, CRM, FFIV, GMCR, ARUN, SWN, CAT, CLF, POT, JEC, FAS, GME, NTRI, X, SNDK, CHL, CREE, RMBS, STI, GES, UNG, VMW
Moving Above 30 DMA = 6

BAC, BUCY, FDX, NYX, SWK, ZION

Moving Below 30 DMA = 2
HANS, TSL

Staying Below 30 DMA
AKS, BA, HSY, POT, ESI, FLS, SKX, WHR, LXK, TIE, FAZ, CRUS, TLT, DLR

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