RUT Leads Again...SPX New High Close...NDX Announces Additions...

On Friday the SPX closed at 1,240 another new high close, up +7.40 or +0.60%.  The COMPQ moved up +20.87, the INDU rose +40.26.  The RUT rose +9.20.  All four indexes gained momentum on Friday, each having their strongest daily move for the week.

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Breadth strengthened again on Friday as advancers led decliners 1.81 to 1 on the NYSE and 2.18 to 1 on the NASDAQ…

Exchange       NYSE          NASDAQ

Advancers      1,955              1,824

Decliners        1,078                 834

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Index Direction      Confirmation

VIX       Up                 No – SPX

SOX     Up                 Yes – COMPQ

Leading stocks on Friday included VECO, DECK, SNDK, CLF, CSTR, RVBD, FFIV, GME, ESI, FAS, ACN, SKX, IPI, STI, CREE, NTRI, FCX, DE, TSL, FLS, NFLX, WLT, AIV, INFA, DLR, URE, GES, AMD, JEC, WFMI, AKS, MA, V, A, X, GS, BAC, PCLN, AMX, CMG, VMW, CF, TBT, NTES, NYX, NDAQ, ZION, AGU, SWK, DHR, CRUS, POT, HSY, BYI

Losing stocks included GMCR, LVS, FAZ, SINA, AKAM, LDK, NETL, HANS, PNC, SOHU, SWN, UCO, RMBS, BA, TLT

Interest rates moved higher, bonds moved lower continuing their 3 month down trend, the Euro closed near unchanged forming an inside day and the SOX rose +0.07% closing at 416.69 on Friday.  The SOX is a leading group at this time.  The VIX moved up +0.36 to close at 17.61.

All nine sectors moved higher on Friday with Healthcare XLV +0.97% and Industrials XLI +0.89% leading all sectors. The SPX stayed above its horizontal resistance on the strength of Financials XLF +0.89%.

The RUT, SOX, SPX, COMPQ and TRAN along with XLB, XLI and XLY made a new high close on Friday.  The RUT and SOX reached their measuring distance target from their Nov low.  The TRAN hit its 1.618 Fib extension.  XLE, XLB, XLI and XLY started to bounce in their bull flag pattern.

The Euro formed an inside day on Friday.  If it breaks through Thursday’s high we see a chart target of 1.3732.  If it breaks through Thursday’s low looks for a move towards its recent bottom at 1.2966.

Next week is triple witching expiration.  Recent quarterly expiration cycles have exhibited a tendency for the SPX to rise on Monday and/or Tuesday.  With a new high close on Friday we see the probability of a follow through continuation move up on Monday morning.

On Friday

Continuation – A, CRM, CRUS, DHR, DOW, FDX, NTRI, NUE, NYX, ZION

Horizontal Resistance Breakout – BAC, GME, RVBD, SWK

Bull Flag Bounce – AKS, CF, FCX, PCLN, RIMM, SKX, SNDK

MACD Divergence Bounce -

Setup Charts to Watch

Bull Flag Setups – CMG, ICE, RMBS, X, VECO, AIV, UCO, F, AKAM, ATI, PCP, STLD, UNG, PNC

Horizontal Breakout – WLT, HSY, VECO, AKS, NFLX, TSL, VMW, ATW, CSTR, GR, AMD, TBT, WHR, SOHU, ESI, GS

Bear Flag Setups – GOOG

NASDAQ Additions/Deletions

The NASDAQ on Friday announced their annual changes to the NDX 100 which will take effect on Monday, December 20 following options expiration at the end of this week.  As I have said over the last few weeks it would likely add NFLX because of its gain in market cap this year.  Joining NFLX in the NDX 100 will be AKAM, CTRP, DLTR, FFIV, MU and WFMI.

These seven stocks will be deleted from the NDX: CTAS, DISH, FWLT, HOLX, JBHT LOGI and PDCO.

I have already made the changes in these stocks in my NDX watch list even thought they won’t be officially added/deleted until a week from Monday 

Continue to trade with the up trend and look for a potential break of horizontal resistance next week.

SPX

Resistance: 1,241, 1,256

Support: 1,220, 1,209, 1,200

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.

Wait to enter bearish trades for break of short term support or a bounce down from the 30 DMA.

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 +0.80 – spinning top in pennant at resistance

AMZN +0.77 – hammer at support

NFLX +3.58 – black spinning top at Dec 7 short term resistance

QCOM +0.39 – white candle breakout of Nov 4 resistance

GOOG +0.71 – spinning top at old support consolidation

BIDU -0.21 – spinning top no confirmation of bullish harami

NDX 100 stocks stronger than the NDX include SNDK, FSLR, FFIV, VRTX, APOL, ADSK, ORCL, TEVA, CMCSA, NWSA, VRSN, NFLX, VOD, DELL and DLTR.

Stocks weaker than the NDX: AKAM, URBN, ALTR, KLAC, NTAP, ROST, MCHP, CERN, MXIM, CTSH, WYNN, SPLS, GENZ, BMC and BIDU.

Stocks to Watch on Monday
Holding Above 30 DMA
HLF, PCLN,  CMG, SINA, CAKE, CAM, UNP, WLT, ATW, SLB, NDAQ, USD, DECK, GR, VECO, CSTR, RVBD, WFMI, NFLX, BYI, MHS, NETL, FFIV, CAT, X, CREE, GES, HAS, UNG, CLF, CRM, INFA, VMW, RMBS, SNDK, CRUS, AIV, ATI, PCP, SKX, FCX, FDX, AKS, A, AMD, DHR, DOW, FLS, GME, ICE, MA, PNC, TBT, UCO, DE, FAS, JEC, STI, SWK, WHR, ZION, SOHU, ACN, ARUN, BAC, GS, NYX, V, CF
Moving Above 30 DMA = 4

ESI, HSY, IPI, NTRI
Moving Below 30 DMA = 2

AKAM, GMCR

Staying Below 30 DMA
MCD, SPG, HANS, SWN, URE, AGU, AMX, LVS, POT, TIE, UAL, FAZ, TLT, MOS, NTES, LDK, CHL, TSL, BA, LXK, DLR

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