SPX Breaks Out as XLF Rises...NFLX Gaps Lower After Earnings...

The SPX formed a hanging man and closed +11.99 at 1,347.24. Financials XLF +0.62% moved higher giving support to the SPX horizontal breakout on Tuesday.

SPX hanging man, at horizontal resistance +0.90%
INDU hanging man, just above horizontal resistance, +0.93%
COMPQ white spinning top, at horizontal resistance, +0.77%
RUT hanging man, +1.04%

Breadth weakened on Monday as advancers led decliners 2.60 to 1 on the NYSE and 1.74 to 1 on the NASDAQ …

Exchange     NYSE     NASDAQ
Advancers    2,204        1,666
Decliners          845           956

Index     Chg.     Close     Direction     Confirmation
VIX        -0.15      15.62        Down           Yes – SPX
SOX     +7.07    450.48       Up                 Yes – COMPQ

Leading stocks > +2% on Tuesday included AKS, HUM, CRUS, VECO, DHR, LDK, UNP, CAT, NETL, HLF, NVDA, A, UAL, DE, AMD

Losing stocks < -2.0% included SLW, X, VLO, JEC, SOHU, CMG, SINA, VMW, ARUN, PCX, RVBD, FWLT

As I stated last week if the SPY broke through horizontal resistance, I would place a new real time virtual trade. Conditional order entered to buy 50 May 135 calls at or above 134.25. Order filled at 7:53:51 at 1.30 per contract. Call finished Tuesday at 1.54 for an unrealized gain of 24 cents or +18.4%.

Positives – SPX, INDU, COMPQ, NDX, RUT, XLF, SOX, TLT, breadth and sectors strengthened, Euro

Negatives –TNX

Interest rates TNX -0.43 moved down and bond ETF TLT moved up 90cents. Financial stocks XLF moved up 10 cents. The Euro moved up 66 pips to 1.4577 at 5 pm on Monday.

All nine sectors moved higher on Tuesday. Industrials XLI +1.92% and Healthcare XLV +1.17% were the strongest sectors.

Key Earnings this week:
Tuesday – AKS, AMZN, BRCM, ILMN, X, F
Wednesday – CTXS, AKAM, EBAY, SBUX, FISV, QGEN, ORLY, BA
Thursday – POT, CSTR, CERN, EXPE, FSLR, KLAC, MSFT, NIHD, VRSN, CROX

Look for selectivity and rotation to occur with positive earnings attracting big money buying and negative earnings attracting big money selling.

SPX
Resistance: 1,344, 1,352, 1,367
Support: 1,330, 1,321, 1,311

The short term 3 day 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 -2.59 – black spinning top
AMZN -3.12 – bearish engulfing
BIDU +0.41 – spinning top
GOOG +7.77 – white candle
NFLX -0.55 – earnings gap down, black candle
PCLN -6.62 – bearish engulfing
QCOM +0.40 – white spinning top

NDX 100 stocks stronger than the NDX include VRTX, SIAL, RIMM, SHLD, SPLS, KLAC, AMGN, PCAR, NVDA, MU, CSCO, INTC, JOYG, DELL and CELG.

Stocks weaker than the NDX include NFLX, ESRX, ALXN, AMZN, FFIV, ERTS, ADSK, PCLN, CTRP, CTXS, SRCL, AKAM, AAPL, SBUX and WYNN.

Stocks to Watch on Wednesday
Holding Above 30 DMA
HUM, GMCR, HLF, SINA, UCO, CSTR, WDC, DHR, NTES, MCP, A, WLT, ACN, SOHU, ANF, DECK, DLR, CRM, LVS, TIF, V, NDAQ, NYX, SNDK, CIEN, IL, VMW, SWK, URE, ATI, TLT, CF, AGU, AKS, ARUN, CHL, CLF, DOW, MHS, POT, UNG, ZION, AMD, CAT, DE, F, FCX, GES, IPI, NETL, NVDA, SMH, ESI, JDSU, PCX, UNP
Moving Above 30 DMA = 7
ATW, FAS, GLW,SLB, SWN, UAL, VECO
Moving Below 30 DMA = 5
CMG, FAZ, FWLT, JEC, VLO
Staying Below 30 DMA
JNPR, SLW, TSL, IAG, GS, CDE, STI, TBT, HAS, MOS, X, ICE, CAM, RVBD, BAC, CRUS, SWKS, LDK

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