SPX Falls to Support...New Low Close on Heavy Selling...

The SPX formed a large black candle closing down -24.91 at 1,295.11.  The SPX fell to its horizontal support of Feb 24 and made a new low close at that support.   Thursday is the fourteenth day since the SPX peak on Feb 18.

We alerted you to prepare for a break of support  and many stocks did break below support today with the 18 NDX stocks moving below their 30 DMA.  Only COMPQ and NDX closed below horizontal support.  The SPX, INDU and RUT closed at or above support.

  

SPX large black candle, new low close at support, -1.85%

INDU large black candle, new low close at support, -1.87%

COMPQ large black candle, new low close below support, -1.84%

RUT large black candle, new low close above support, -2.64%

Breadth weakened on Thursday as decliners led advancers 5.37 to 1 on the NYSE and 5.85 to 1 on the NASDAQ …

Exchange       NYSE          NASDAQ

Advancers         472                 390

Decliners        2,537              2,283

Index              Chg.    Close    Direction      Confirmation

VIX                +1.66       21.88     Up                 Yes – SPX

SOX             -10.62     423.73     Down            Yes – COMPQ

Among the SOX only STM fell more than -5%.  MU, KLAC, BRCM, TSM, AMD, TER, SNDK, AMAT and NSM each fell more than -2%.

Leading stocks > +2% on Thursday included GMCR, FAZ, UAL, SINA 

Losing stocks < -2.0% included CLF, NVDA, SLW, FAS, LDK, LVS, PCX, VLO, TSL, ATW, IPI, MOS, JNPR, CAM, SLB, CAT, FWLT, GLW, POT, IL, UCO, WLT, WDC, SWN, TBT, ARUN, V, URE, AGU, JEC, TIF, DOW, CIEN, AMD, DECK, STI, NDAQ, SNDK, ICE, DE, VMW, DHR, A, UNG, AKS, BAC, X, CF, RVBD

Positives – NFLX,

Negatives – SPX, VIX, INDU, COMPQ, RUT, TNX, TLT, breadth weakened, Euro, AAPL, AMZN, BIDU, GOOG, PCLN, QCOM

Interest rates moved lower on Thursday and bond ETF TLT was up $1.52.  The Euro fell 110 pips to 1.3796 at 5 pm ET closing below its Feb 1 resistance, now new support.

Eight of nine sectors rose on Thursday with Energy XLE -3.64% and Materials XLB -2.19% leading all sectors down.

Here are some potential short term reversal patterns.

Movers and Setups

Potential M Tops & Continuations – CRUS, SWKS, CLF, IPI, NETL, CIEN, POT, AMD, SMH, LDK, JNPR, ATI

Lower Highs – PCX, WLT, MOS, MCP, NDAQ, DECK, UNP, TBT, WHR, UAL

SPX

Resistance: 1,300, 1,311, 1,321,

Support: 1,281, 1,271, 1,256

The short term 3 day trend is down.
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 -5.80 – large black candle closes below 30 DMA

AMZN -2.91 – piercing line hammer at horizontal support

NFLX +7.03 – black spinning top, new low close near bottom earnings gap

QCOM -0.96 – large black candle closes below 30 DMA

GOOG -11.47 – white spinning top does not confirm bullish harami

BIDU +1.12 – inside day, hammer

NDX 100 stocks stronger than the NDX include SBUX, NFLX, FFIV, URBN, BIDU, DLTR, EXPE and ALTR.

Stocks weaker than the NDX include NVDA, NTAP, VRTX, JOYG, WYNN, LRCX, MU, KLAC, INTU, RIMM, BRCM, YHOO, CTXS, CELG and ILMN.

Stocks to Watch on Friday

Holding Above 30 DMA
DLR, HUM, NTES, SWK, IL, ICE, DHR, ARUN, GMCR, RVBD, SLW, ESI, HLF, UCO, CMG, HAS, A, TIF, WDC, SINA, TLT

Moving Above 30 DMA = 2

FAZ, MCP

Moving Below 30 DMA = 15

AMD, ATW, BAC, CAM, CAT, CHL, DECK, DOW, JNPR, NDAQ, UNP, URE, V, VECO, VLO

Staying Below 30 DMA

CLF, FAS, GLW, JDSU, NETL, PCX, TBT, ACN, AGU, CRUS, CSTR, NYX, SWKS, WLT, CIEN, DE, GES, IPI, MHS, MOS, POT, SLB, SMH, SOHU, ATI, CF, AKS, SWN, CRM, LDK, SNDK, STI, TSL, FWLT, GS, JEC, LVS, NVDA, UAL, X, ZION, VMW, UNG, F, FCX

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