SPX up 12%, INDU +11%, NDX +19% and RUT +25%...A Great Year...

Happy New Year!     Let's Make 2011 our Best Trading Year Ever!

The SPX closed flat at 1,257.68, down -0.24 or -0.02%.  The broad indexes again traded in a very narrow range on light volume although SPY and QQQQ volume rose while DIA and IWM volume was lighter.   The RUT and COMPQ were lower on Friday setting up a possible pull back in the other indexes. The SPX did close above the short term support level of the last six trading days.  Watch for a potential break of short term support.

(click image to enlarge)

2010 Returns

SPX +12.78%

INDU +11.02%

COMPQ +16.91%

RUT +25.31%

Breadth strengthened on the NYSE and weakened on the NASDAQ on Friday and as advancers led decliners 1.18 to 1 on the NYSE and decliners led advancers 1.37 to 1 on the NASDAQ…

Exchange       NYSE          NASDAQ

Advancers      1,594              1,125

Decliners        1,345              1,545

(click image to enlarge)

Index Direction     Confirmation

VIX      Up                 Yes – SPX

SOX    Down           Yes – COMPQ

Leading stocks on Friday included UCO, LVS, DISH, UNG, AKS, POT, IPI, TLT, TSL, AMX, FCX, MOS, UNP, F, SWN, FWLT, GR

Losing stocks included RVBD, ESI, CMG, HAS, TBT, DECK, ARUN, SINA, PCX, NTES, NTRI, SOHU, WLT, GES, ATI, CF, WHR, CAKE, X, SNDK, VMW, HANS, HOLX, INFA, UAL, MHS, VECO, NETL, HLF  

Interest rates pulled back on Friday and bonds moved higher.  The Euro moved up 85 pips to 1.3374 at 5 pm ET. 

The SOX fell -0.48, closing at 411.82 on Friday and the VIX rose +0.23 and closed at 17.75.

Five of nine sectors moved higher on Friday with Energy XLE +0.15% and one was neutral Financials XLF +0.13% leading all sectors. 

Continue to trade with the trend of the chart you are trading.

SPX

Resistance: 1,256, 1,281

Support: 1, 241, 1,220, 1,209

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.

Enter bearish trades on a break of short term support or a bounce down from the 30 DMA.

The short term 3 day trend is neutral.
The six-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 -1.10 – spinning top in bull flag

AMZN -2.75 – black candle makes new low in bull flag

NFLX -4.10 – black candle closes at support and MACD bullish divergence

QCOM -0.24 – hammer day in bull flag

GOOG -4.89 – black candle

BIDU -1.68 – black candle at support and MACD bullish divergence

NDX 100 stocks stronger than the NDX include NVDA, WYNN, VOD, MU, MRVL, WCRX, LINTA, NIHD, ADBE, CHKP, VMED, QGEN, NWSA, TEVA and BIID.

Stocks weaker than the NDX: NFLX, CTRP, BIDU, FFIV, URBN, ADSK, AMZN, ERTS, KLAC, AKAM, LRCX, PCLN, FISV, HSIC and AMGN.

Stocks to Watch on Monday
Holding Above 30 DMA
SINA, CAM, WLT, ATW, SLB, NDAQ, USD, DECK, GR, RVBD, BYI, CAT, X, GES, CLF, INFA, VMW, SNDK, CRUS, FCX, FDX, AKS, A, AMD, DHR, DOW, FLS, GME, ICE, PNC, UCO, DE, FAS, JEC, STI, SWK, WHR, ZION, ACN, BAC, NYX, ESI, IPI, HSY, NTRI, ATI, CF, AIV, GS, URE, AGU, MOS, POT, UNP, BA, SPG, RMBS, SWN, DLR, UNG
Moving Above 30 DMA = 2

AMX, TSL, TLT

Moving Below 30 DMA = 4

CREE, HANS, PCP, TBT

Staying Below 30 DMA
HAS, HLF, CRM, MHS, NETL, CAKE, TIE, MA, SKX, V, CSTR, VECO, ARUN, CMG, SOHU, GMCR, MCD, LVS, UAL, FAZ, NTES, LDK, CHL, LXK

Intermediate Term Market Trend: Up
Short Term Market Trend: Neutral