Stocks SPX Rally on Thanksgiving Eve...Let Us Be Grateful...

Happy Thanksgiving Everyone!

Christine shared this with me and I thought, you like me, would enjoy it too!

My New Parrot....Recently I received a parrot as a gift.

The parrot had a bad attitude and an even worse vocabulary.
Every word out of the bird's mouth was rude, obnoxious and laced with
profanity.

I tried and tried to change the bird's attitude by consistently
saying only polite words, playing soft music and anything else I could
think of to "clean up" the bird's vocabulary.

Finally, I was fed up and I yelled at the parrot.
The parrot yelled back.
I shook the parrot and the parrot got angrier and even ruder.

So, in desperation, I threw up my hands, grabbed the bird and
put him in the freezer.

For a few minutes the parrot squawked and kicked and screamed.
Then suddenly there was total quiet.

Not a peep was heard for over a minute.

Fearing that I'd hurt the parrot,
I quickly opened the door to the freezer.

The parrot calmly stepped out onto my outstretched arms and said
"I believe I may have offended you with my rude language and
actions.
I'm sincerely remorseful for my inappropriate transgressions and
I fully intend to do everything I can to correct my rude and
unforgivable behavior."

I was stunned at the change in the bird's attitude.

As I was about to ask the parrot what had made such a dramatic
change in his behavior, the bird continued,

"May I ask what the turkey did?"

HAPPY THANKSGIVING!!!!!

On Wednesday the SPX formed a large white candle that moved above Tuesday’s high.  The SPX closed at 1,198, up +17.62 or +1.49%, the COMPQ moved up +48.17, the INDU rose +150.91 and the RUT closed +16.60 on Wednesday just 0.24 point below its closing high on Nov 8.

 (click image to enlarge)

So how many of you actually paid attention to this technical observation from Tuesday’s post?  “A sell off day and the small caps and semiconductors are relatively stronger…two interesting clues…”

                                    

Breadth strengthened from Tuesday as advancers led decliners 4.87 to 1 on the NYSE and 3.77 to 1 on the NASDAQ…

Exchange       NYSE          NASDAQ

Advancers      2,505              2,108

Decliners           514                 558

(click image to enlarge)

Index Direction      Confirmation

VIX       Up                   Yes – SPX

SOX     Up                   Yes – COMPQ

Leading stocks on Wednesday included GES, CREE, VECO, UCO, SKX, SNDK, UAL, CSTR, AKAM, FAS, USD, NETL, AMD, LDK, URE, LVS, TSL, SWK, SINA, RVBD, PCP, DECK, TBT, INFA, VMW, AIV, WLT, HANS, TIE, BA, SPG, DHR, DOW, FDX, ATI, FFIV, GR, CLF, GMCR, CF, CMG, AMX, A, STI, CAT, FLS, CAM, ARUN, POT, DLR, SLB, ICE, FCX, IPI, MOS, UNP, WHR, LXK, CRM, CAKE, BAC, NTES

Losing stocks included FAZ, TLT, ZION, DE, CRUS

Let us be grateful…not because the market rose on Wednesday…rather because we have many blessings of life, family, health, freedom, opportunity, growth, learning and improvement.  I hope everyone is having a Wonderful Thanksgiving Day weekend.

Interest rates moved higher, bonds broke below the low of the high day giving a bearish entry signal on a bear flag pattern.  The Euro moved lower and the SOX closed higher +2.69% and broke out of horizontal resistance to a new high close.  The SOX is leading the market higher.  The VIX moved down -1.07 to close at 19.56.

All nine sectors moved higher on Wednesday reversing Tuesday’s sell off with Industrials XLI +2.26% and Consumer Discretionary XLY +2.06% leading all sectors higher. 

The SPX, INDU and COMPQ closed above their 30 DMA and the RUT already above its 30 DMA moved near its horizontal resistance.  The RUT continues to relatively stronger.

Half day of trading on Friday, generally the lightest volume day of the year.  2009 was the exception with the Dubai news causing a flurry of selling volume that was reversed the following week.

The big seven AAPL, AMZN, BIDU, GOOG, NFLX, PCLN and QCOM all rose on Wednesday and stayed above the Nov 16 support low.  AMZN and NFLX both made a new high close.

(click image to enlarge)

Dave’s Insight:  If price action stays above support in an up trend, it is price fluctuation not trend change.

Dave’s Insight:  The trend is your friend ONLY if you trade with the trend.

Once again the news which said Korea, euro debt and the Fed’s downgrade in growth for 2010 and 2011 was the cause for Tuesday’s selloff…had a one day impact and did not reverse the trend.

Did this question get your attention from Tuesday’s post?  “Maybe so, but if these fears were really wide spread among big money, why were semiconductor and small caps stocks relatively stronger?”

Dave’s Insight:  A news event generally impacts price action only for a day or two.

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 +6.06 – white candle close above 30 DMA

AMZN +9.05 – large white candle horizontal breakout, all-time high

QCOM +0.97– large white candle

GOOG +11.96 – large white candle close above horizontal support

BIDU +2.69 – white candle above 30 DMA

NDX 100 stocks stronger than the NDX include AMZN, ALTR, SNDK, PCAR, PDCO, FWLT, FLIR, JOYG, WCRX, BBBY, EXPD, NIHD, SBUX, CTXS and SPLS.

Stocks weaker than the NDX: VMED, MRVL, APOL, ESRX, DELL, AMGN and VOD.

Stocks to Watch on Friday
Holding Above 30 DMA
HLF, PCLN,  LVS, CMG, SINA, AIV, CAKE, CAM, DHR, UNP, WLT, A, ATW, SLB, NDAQ, USD, AMD, DECK, GR, VECO, CSTR, RVBD, TBT, WFMI, NFLX, BYI, INFA, MHS, NETL, CRM, FFIV, ARUN, SWN, CAT, POT, GME, NTRI, X, CREE, BUCY, GES, HAS, MCD, UNG, ARUN, CLF, CRM, INFA, UAL, VMW, HANS, RMBS, SNDK, CRUS, FAZ, GMCR, CF
Moving Above 30 DMA = 15

AIV, AKAM, AMD, AMX, ATI, DHR, DOW, FCX, FDX, FLS, MOS, PCP, POT, SKX, SPG
Moving Below 30 DMA = 0

Staying Below 30 DMA
AKS, DE, ESI, MA, PNC, GS, ICE, JEC, NTES, FAS, IPI, LDK, UCO, 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