SPX Pulls Back Closes at 1,199.21...

The SPX closed down -14.33 or -1.18%, the COMPQ fell -37.31, the INDU fell -90.52 and the RUT fell -12.31 on Friday.  Stocks opened lower following a drop in the Chinese market on concerns of inflation and a potential rise in China’s interest rates.  DIS and NVDA closed higher for the day.

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Breadth weakened on Friday as decliners led advancers 4.79 to 1 on the NYSE and 4.13 to 1 on the NASDAQ…

Exchange       NYSE          NASDAQ

Advancers         519               519

Decliners        2,488            2,144

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Index Direction      Confirmation

VIX       Up                 Yes – SPX

SOX     Up                 No – COMPQ

Leading stocks on Friday included FAZ, A, NTES, TBT, HANS, USD, FFIV, DIS

Losing stocks included TSL, UCO, CF, MOS, FAS, AGU, LVS, WLT, CAM, VECO, FCX, GMCR, ATW, CLF, SKX, TIE, MA, BA, CRUS, BUCY, IPI, SINA, V, UNG, VMW, ATI, WHR, ZION, DE, ESI, AKS, STI, DECK, GES, SHOU, ICE, SNDK, BAC, BYI, PNC, ACN, LXK, MSH, URE, JEC, UAL, F, FLS, INFA, ARUN, CAT, SWK, DOW

Interest rates moved lower, bonds continued down, the Euro moved up slightly and the SOX closed near unchanged up +0.03%.  The VIX moved up +1.97 to close at 20.61.

All nine sectors moved lower on Friday with Materials XLB -2.23% and Financials XLF -1.65% the weakest sectors.

The SPX after falling to 1,194 closed at 1,199.21, the S2 level of its Nov 4 candle.  All four indexes and numerous stocks moved lower in their bull flag patterns and Friday’s low was still higher than the previous swing low.

AAPL, GOOG, AMZN, MSFT, GILD and BIDU accounted for more than half of the -35 points the NDX fell on Friday.  Recently strong stocks CTXS, NTAP, WYNN and JOYG had above average pull backs on Friday with 92 of the NDX 100 moving lower.

AAPL sold off on 150% volume and GOOG, AMZN and BIDU moved lower on average volume.  With the indexes and many stocks currently in bull flag patterns, watch the short term support levels marked in these charts for a bounce or break.  Whichever occurs on these four charts will likely happen on the broad index.

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NVDA and DIS up in after hours trading after reporting earnings.

Charts to Watch

Wednesday’s Flag Entries NFLX, BIDU, CRM and CTXS did not stop out and BIDU, CRM and CTXS moved back into the setup zone for potential entry signals on Monday.

Thursday’s Flag Entries FCX, CSTR, SLB, PNC, WLT, CAKE did not stop out and SLB, PNC, WLT, CAKE also moved back into the setup zone for potential entry signals on Monday.

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Flag Setups – DOW, JOYG, HUM, SINA, X, WYNN, FAS, USD, BYI, GR, IPI, UAL, UNP,  AMD, DECK, SOHU, VECO, MAR, ARUN, AIV, AKAM, CLF, ILMN, PCLN, RMBS, SNDK, SPG, URE, V,  LVS, ISRG, DE, ZION, AAPL, AMZN

Breakouts and Setups –VMW, CHKP, ORLY

Bearish Entries on Friday – SHLD, TIE, NYX, WHR and LZ

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

SPX

Resistance: 1,209, 1,220, 1,234

Support: 1,200, 1,190, 1,182

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.

Many stocks pulled back on Friday and closed below the low of the high day which is a potential exit signal on short term bullish trades for some traders.

On Friday some down trending stocks broke the low of the high day and gave a bearish entry signal.  Look for a close below of the low of the high day.

The short term 3 day trend is down.
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 -8.62 – black candle in flag pullback to 30 DMA

QCOM -0.45 – hammer in bull flag at gap support

GOOG -13.90 – black candle in bull flag

BIDU -3.46 – black candle pull back to horizontal support

NDX 100 stocks stronger than the NDX include NVDA, INTC, GRMN, SYMC, XLNX, QGEN, LLTC, VOD, BRCM, MCHP, PAYX, LRCX, COST, MICC and AMGN.

 

Stocks weaker than the NDX: FWLT, DELL, VRTX, JOYG, ATVI, SHLD, WYNN, BIDU, GILD, CTXS, ADSK, AMZN, AAPL, NIHD and EXPE.

Stocks to Watch on Monday
Holding Above 30 DMA
HLF, PCLN,  MCD, LVS, CMG, FCX, SINA, AIV, CAKE, CAM, DE, DHR, DOW, UNP, WLT, A, HAS, IPI, ATW, SLB, AMX, NDAQ, UAL, USD, MA, AMD, ATI, DECK, GR, UCO, CF, GS, SPG, MOS, VECO, CSTR, RVBD, TBT, WFMI, NFLX, NTES, PNC, BYI, INFA, MHS, NETL, AKAM, CRM, FFIV, GMCR, ARUN, SWN, CAT, CLF, POT, JEC, FAS, GME, NTRI, X, SNDK, CREE, RMBS, VMW, HANS
Moving Above 30 DMA = 0

Moving Below 30 DMA = 8

AGU, BAC, BUCY, GES, ICE, URE, V, ZION

Staying Below 30 DMA
ACN, CHL, FDX, NYX, PCP, STI, SWK, UNG, TSL, 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: Down