SPX Highest Close since Sep 3, 2008...

Read the January 1 Post and send your email, if you have not yet taken the first simple step to making 2011 your best year yet!  Don’t be left out…

The SPX closed up at 1,271.89, up +14.25 or +1.13%.  It is now just 10 points away from its 1,281 December breakout price target.  The broad indexes all exploded to the upside on a wide range day with increased volume indicating that institutions were back from the holidays.

All four broad indexes and the TRAN all made new high close.  Both the INDU and TRAN made a new high close confirming the primary uptrend under Dow Theory.

Today was the first trading day of the third year of the Presidential Term Cycle which has the largest average annual gain of the four years.  Since 1945 the third year of the PTC produced a positive gain 100% of the time.

(click image to enlarge)

Breadth strengthened on Monday as advancers led decliners 2.85 to 1 on the NYSE and 3.15 to 1 on the NASDAQ…

Exchange       NYSE          NASDAQ

Advancers      2,256              2,059

Decliners           789                 652

(click image to enlarge)

Index Direction     Confirmation

VIX      Down            Yes – SPX

SOX    Up                 Yes – COMPQ

Leading stocks > 1% on Monday included ARUN, RVBD, BAC, FAS, LDK, UAL, UNG, CMG, CLF, GMCR, PCX, VMW, ATI, ZION, SINA, NETL,AMD, CRM, INFA, CRUS, URE, X, GS, SKX, SNDK, F, STI, JEC, DOW, HANS, FWLT, CAKE, CREE, WLT, BYI, AKS, DECK, WHR, ESI, SWK, NYX, BA, SWN, AIV, VECO, NTRI, NDAQ, HOLX, TSL, SPG, NTES, TBT, PNC, PCP, UNP, DLR, A, AMX, GR, LXK

Losing stocks < -1% included FAZ, IPI, ATW, MA, HAS 

Interest rates rose on Monday and bonds moved lower.  The Euro moved down 14 pips to 1.3360 at 5 pm ET. 

The SOX rose +3.23, closing at 415.05 on Monday and the VIX moved lower -0.14 and closed at 17.61.

All nine sectors moved higher on Monday with Financials XLF +2.19% and Consumer Discretionary XLY +1.18% leading all sectors. 

Moves on Monday

Continuation –WLT, AGU, MOS SPG, BYI, URE, CF, GME, FAS, FLS, FCX, NUE, STLD, A, DHR

Resistance Breakout – CLF, WYNN, AMD, X, AIV, DOW

Bull Flag Bounce – WFMI, WYNN, AMD, ATI, NDAQ, F, SINA, CLF, ILMN, NTAP, ZION, STI, WFC, BAC, XLF, VMW, SNDK, GS, SWK, NETL, USD, CRUS, UNP, AKS, GR, FFIV, AMZN, CAT, DE, GOOG, ACN, JEC

MACD Divergence Bounce –

Support Bounce – CMG, TSL, JASO, RMBS

Bear Flag Break – TLT

Break of Support –

Setup Charts to Watch

Bull Flag Setups – AZO, IPI, GES, ICE, LVS, NTRI, ATW, DECK, HSY

Horizontal Breakout – C, UNG, X, PNC, NYX, WHR, SLB

MACD Divergence – CREE, CAKE, NFLX, CSTR, AKAM, BIDU, LDK

Bear Flag Setups – HAS, V, SKX

Horizontal Support Breakout – TBT

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

SPX

Resistance: 1,281

Support: 1,256, 1, 241, 1,220

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.  Monday 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 up.
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 +7.01 – large white in bull flag bounce and breakout, new high

AMZN +4.22 – white candle bull flag bounce

NFLX +2.71 – piercing line at support and MACD bullish divergence

QCOM +0.69 – spinning top in bull flag bounce

GOOG +10.38 – white candle in bull flag bounce

BIDU +3.20 – white candle bounce and MACD bullish divergence

NDX 100 stocks stronger than the NDX include WYNN, NTAP, ISRG, ESRX, PCLN, SBUX, BIDU, FFIV, MU, EBAY, CTRP, CTSH, ADSK, SNDK and VRTX.

Stocks weaker than the NDX: LRCX, NIHD, EXPE, URBN, INTC, VMED, CTXS, STX, FLIR, VOD and MRVL.

Stocks to Watch on Tuesday
Holding Above 30 DMA
SINA, CAM, WLT, SLB, NDAQ, USD, DECK, GR, RVBD, BYI, CAT, X, 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, NTRI, ATI, CF, AIV, GS, URE, AGU, MOS, POT, UNP, BA, SPG, RMBS, SWN, DLR, UNG, AMX, TSL
Moving Above 30 DMA = 9

ARUN, CHL, CREE, GMCR, HANS, LDK, NETL, PCP, TBT

Moving Below 30 DMA = 4

ATW, GES, HSY, TLT

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

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