The SPX on Wednesday formed a spinning top which can be viewed as a potential bearish harami while closing down -3.56 at 1,304.03. A close look at the SPX chart reveals that this spinning top by itself may be more bullish than bearish. Why? Look at the green support line or S1 of Tuesday’s candle. The spinning top stayed well above the S1 level which often is a sign that sellers are relatively weak and that today’s price action may simply be more a function of buyers pausing, after two days of strong buying, to see how much profit taking exist at the 1,300 level.
(click image to enlarge)
Another important factor to observe is that even though the SPX sold off 23 points on Friday, big money bought up 32 points over Monday and Tuesday. There are now two breakout price targets on the chart. The Jan 26 breakout target is 1,321 and the Feb breakout target is 1,330.
SPX spinning top potential bearish harami
INDU spinning top, new high close
COMPQ potential shooting star
RUT potential shooting star
Breadth weakened on Wednesday as decliners led advancers 1.13 to 1 on the NYSE and 1.27 to 1 on the NASDAQ …
Exchange NYSE NASDAQ
Advancers 1,397 1,160
Decliners 1,581 1,478
Index Chg. Close Direction Confirmation
VIX -0.33 17.30 Down No – SPX
SOX +2.08 453.91 Up No – COMPQ
Leading stocks > +2% on Wednesday included MCP, TSL, CRUS, LDK, CF, NDAQ, NVDA, CAM, ARUN, SNDK, CMG, HSY, SOHU, SINA, CRM, VMW, VECO
Leading stocks > +2% on Wednesday included MCP, TSL, CRUS, LDK, CF, NDAQ, NVDA, CAM, ARUN, SNDK, CMG, HSY, SOHU, SINA, CRM, VMW, VECO
Losing stocks < -2.0% included LCC, GME, F, WHR, FDX
Positives – VIX, SOX, TNX, SPX stays above S1, INDU new high close, AMZN, GOOG, GMCR
Negatives – breadth weakened, sector weakness
Interest rates rose on Wednesday and bond ETF TLT closed near unchanged up 2 cents. The Euro moved down 17 pips to 1.3808 at 5 pm ET.
Eight of nine sectors moved lower on Wednesday with Technology XLK +0.18% and Energy XLE -0.08% leading all sectors. Financials XLF -0.78% was the weakest sector.
In the Minneapolis AO Workshop on Monday at 11:22 am MT, we sold, in our real time virtual trade account, 5 CRM Feb 120 puts at 2.00 each with 19 days to expiration. At the close today the mark on the puts was 73 cents. That is a gain of 1.27 or $635 in less than three full days. The reserve to do the 5 contracts was approximately 9,927. That equates to a +6.3% return in three days. The trade is still open.
SPX
Resistance: 1,300, 1,311, 1,321
Support: 1,281, 1,271, 1,256
The short term 3 day trend is up.
The six-month trend is up.
The twelve-month trend is up.
The six-month trend is up.
The twelve-month trend is up.
Trade with the trend of the chart you are trading.
Bullish entry signal is a bounce off support and a break above the high of the low day or a break out of horizontal resistance.
Bearish entry signal is a break of short term support or a bounce down from the 30 DMA or other resistance.
AAPL -0.71 – doji, potential bearish harami at resistance
AMZN +1.42 – white candle bouncing up from support
NFLX -1.64 – white spinning top above gap support
QCOM -1.09 – black candle above gap support
GOOG +0.96 – spinning top bouncing up from support
BIDU -0.71 – potential shooting star above S1 and gap support
NDX 100 stocks stronger than the NDX include ERTS, FSLR, NVDA, FFIV, SNDK, ADSK, NWSA, GILD, STX, DELL and CELG.
Stocks weaker than the NDX: CHRW, BRCM, EXPD, DLTR, PCAR, CTRP, WFMI, ORLY
Stocks to Watch on Thursday
Holding Above 30 DMA
SINA, NDAQ, SMH, NVDA, FWLT, PCX, CLF, CRUS, HOLX, DE, FAS, GLW, JEC, ACN, NYX, ATI, URE, DISH, BA, POT, SWN, TSL, DLR, HANS, HUM, LDK, NTES, CAM, SLB, TIE, MA, SPG, ESI, STI, CAT, DOW, MOS, NETL, SOHU, SWKS, ATW, SWK, TBT, AIV, AKS, ICE, JNPR, PCP, WLT, X, AGU, AMD, BAC, CF, DHR, IPI, LVS, LXK, PNC, SKX, V, ZION
Holding Above 30 DMA
SINA, NDAQ, SMH, NVDA, FWLT, PCX, CLF, CRUS, HOLX, DE, FAS, GLW, JEC, ACN, NYX, ATI, URE, DISH, BA, POT, SWN, TSL, DLR, HANS, HUM, LDK, NTES, CAM, SLB, TIE, MA, SPG, ESI, STI, CAT, DOW, MOS, NETL, SOHU, SWKS, ATW, SWK, TBT, AIV, AKS, ICE, JNPR, PCP, WLT, X, AGU, AMD, BAC, CF, DHR, IPI, LVS, LXK, PNC, SKX, V, ZION
Moving Above 30 DMA = 4
ARUN, CMG, HSY, MCP
Moving Below 30 DMA = 3
A, UAL, UNP
Staying Below 30 DMA
UCO, UNG, SKX, WHR, F, FDX, GMCR, MHS, SNDK, VECO, TLT, CHL, CRM, RVBD, VMW, DECK, FCX, GS, HLF, CREE, GME, SLW, GES, HAS, CSTR, MCD, FAZ
UCO, UNG, SKX, WHR, F, FDX, GMCR, MHS, SNDK, VECO, TLT, CHL, CRM, RVBD, VMW, DECK, FCX, GS, HLF, CREE, GME, SLW, GES, HAS, CSTR, MCD, FAZ
Intermediate Term Market Trend: Up
Short Term Market Trend: Up
Short Term Market Trend: Up
4 comments:
Thank you Dave for your continued attention - I look forward to seeing you at Seattle BO workshop Feb 15/16
Dave, neither my trading partner nor I could see an entry for your CRM trade. The stock wasn't exactly in a recent uptrend as it made somewhat of a lower high and lower low. Yet your trade was excellent and profitable. Were you thinking of it as a bull flag? Did the high VIX have something to do with it that day? Would love to see what you (or others) see that I don't.
Thanks much.
I'm with Scott...somewhat perplexed on the CRM trade?
Ron M
Dave, I'm with Scott and others. I cannot see the entry sign for the CRM trade on that day. Would love to see it as you do! Thanks.
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