SPX Down Stays in Consolidation Above Support...Day 10...

Counter trend trading?...read this morning's post...

The SPX opened higher but reversed shortly after the open closing down -11.02 at 1,310.13 on Monday.  The SPX continues its short term consolidation or sideways pattern.  As I mentioned in the Weekly Wrap on Friday this consolidation is looking more like the November consolidation which lasted 16 days from its peak before buying pressure lifted the SPX out of its consolidation.  Monday is the tenth day since the SPX peak on Feb 18.

SPX black candle, breaks Friday’s low

INDU black candle, closes just above Friday’s low

COMPQ black candle, breaks Friday’s low

RUT black candle, breaks Friday’s low

Breadth weakened on Monday as decliners led advancers 3.29 to 1 on the NYSE and 3.36 to 1 on the NASDAQ …

Exchange       NYSE          NASDAQ

Advancers         702                 610

Decliners        2,315              2,050

Index              Chg.    Close    Direction      Confirmation

VIX                +1.60       20.66     Up                 Yes – SPX

SOX             -12.47     447.35     Down            Yes – COMPQ

The Semiconductor group was downgraded to “market weight” from “overweight” by Wells Fargo Securities.  TER, MU, AMAT, AD, NVLS, KLAC, WFR, BRCM, ALTR, NSM, XLNX, TXN and LLTC all fell more than -2%.

Leading stocks > +2% on Monday included WDC, UAL, ICE, UNG 

Losing stocks < -2.0% included CIEN, JDSU, CRUS, RVBD, SOHU, AMD, FWLT, CF, TSL, PCX, VMW, CLF, LVS, MOS, POT, LDK, MCP, IPI, AKS, FCX, NETL, JEC, VLO, F, SMH, ATI, AGU, GES, X, MHS, HUM, DE, HLF

Positives – Bonds lower, interest rates steady

Negatives – SPX, VIX, COMPQ, RUT, breadth weakened, eight sectors moved lower, SOX, AAPL, BIDU, GOOG, NFLX

Interest rates opened higher but reversed and closed near unchanged on Monday.  Bond ETF TLT fell 58 cents.

Eight of nine sectors fell on Monday with Materials XLB -1.72% and Technology XLK -1.27%, the weakest of all sectors.  Only Utilities XLU +0.39% was higher.

Setups

Stocks with a pull back -  ICE, IL, A, ARUN, RVBD, PCLN, WYNN, CRUS, DTV, NETL, QCOM, SLW, CAM, VRTX, DLR, CHK, HLF, JNPR, JDSU, CLF, GLW, ATW, SWK, AAPL, SMH, TIF and NTES.

Gaps – WDC, STX

SPX

Resistance: 1,321, 1,330, 1,344

Support: 1,311, 1,300, 1,281

The short term 3 day trend is neutral.
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 -4.64 – bearish engulfing pattern

AMZN -2.59 – hammer like at horizontal support

NFLX -3.32 – black candle after gap up closes near Friday’s S1

QCOM -0.69 – black candle, bull flag support holds

GOOG -8.96 – large black candle falls to 3 month support

BIDU -2.16 – bearish engulfing pattern

NDX 100 stocks stronger than the NDX include STX, SBUX, EXPE, SYMC, GILD, VMED, XRAY, GENZ, VOD, BIIB, FLIR and DTV.

Stocks weaker than the NDX include MU, AMAT, FFIV, KLAC, NIHD, WYNN, ATVI, BRCM, JOYG, VRTX, MXIM, FSLR, LRCX, ESRX and SIAL.

Stocks to Watch on Tuesday
Holding Above 30 DMA
NDAQ, VLO, CLF, JDSU, CRUS, GLW, NYX, DLR, HUM, NTES, CAM, CAT, NETL, ATW, SWK, IL, ICE, JNPR, AMD, DHR,  ARUN, DECK, GMCR, RVBD, SLW, ESI, HLF, UCO, SWKS, AGU, CMG, HAS, V, VECO, A, ACN, CSTR, DOW, TIF, WLT, FAZ, TLT

Moving Above 30 DMA = 1

WDC

Moving Below 30 DMA = 14

CIEN, DE. GES, IPI, MCP, MHS, MOS, PCX, POT, SLB, SMH, SOHU, UNP, URE

Staying Below 30 DMA

ATI, CF, FAS, AKS, SWN, CRM, LDK, SNDK, STI, TSL, BAC, FWLT, GS, JEC, LVS, NVDA, TBT, UAL, X, SINA, ZION, VMW, UNG, F, CHL, FCX

Added:  IL, WDC

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