SPX Closes Lower and Above 30 DMA...XLP, XLU, XLV, XLY Sectors Strong...

The SPX reversed Thursday’s one day gains, formed a large black candle, and closed -10.88 at 1,337.77 near horizontal support.  The SPX, INDU and COMPQ closed above their 30 DMA and the RUT broke and closed below its 30 DMA.

(click image to enlarge)

SPX large black candle, at support and 30 DMA -0.81%

INDU large black candle, at support, above 30 DMA -0.79%

COMPQ large black candle, above support and 30 DMA -1.21%

RUT large black candle, above support, close below 30 DMA -1.39%

Each of the broad indexes is now in a complex consolidation, meaning it is not a simple pull back.  It is a pull back that bounced and pulled back a second time forming a symmetrical triangle pattern.  Traders should be alert for a potential break of support.  If a break of support occurs the SPX chart suggests a move to its 1,310 support level.  Expect such a move to be confirmed by a rising VIX.

The sectors XLP, XLU, XLV and XLY are strong, while XLI and XLK are neutral and XLF, XLB and XLE are down near support.

(click image to enlarge)

While the SPX will likely continue to consolidate with a weak financial sector, a break of support will likely be accompanied with XLP, XLU, XLV and XLY rolling over from their recent highs.  In other words without a pull back in the strong sectors a SPX break of support is a small probability.

While leading NDX stocks AAPL, BIDU, GOOG and PCLN were weak Friday there are still a large number of NDX stocks including AMZN, ILMN and NFLX that are at or near recent highs.  NVDA gapped lower and moved down -10.93% on an analyst downgrade.

Breadth weakened on Friday as decliners led advancers 2.56 to 1 on the NYSE and 3.16 to 1 on the NASDAQ …

Exchange       NYSE        NASDAQ

Advancers         848               630

Decliners        2,173            1,997

Index              Chg.    Close   Direction    Confirmation

VIX                +1.04     17.07      Up              Yes – SPX

SOX               -6.18   440.95      Down          Yes – COMPQ

Leading stocks > +2% on Thursday included A, IL, FAZ, GES

Losing stocks < -2.0% included NVDA, SINA, LDK, MCP, PCX, FAS, TSL, ESI, CLF, AKS, DE, JDSU, WDC, WLT, ATI, STI, BAC, FWLT, CAT, X, IPI

Key Earnings this week:  ADSK, CRM, DE, DELL, HPQ, LDK, TSL, JCP, LOW, WMT, HD, GME, ANF, SHLD, TGT

Positives – SPX, INDU, COMPQ and RUT stayed above May 5 low of short term horizontal support, SPX, INDU and COMPQ closed above 30 DMA

Negatives – SPX, VIX, INDU, COMPQ, RUT, Euro, TNX, AAPL, BIDU, GOOG, PCLN

Interest rates TNX -0.43 moved down and bond ETF TLT moved up 84 cents.  Financial stocks XLF fell -23 cents. The Euro fell -169 pips to 1.4073 at 5 pm on Friday.

All nine sectors moved lower on Friday.  Consumer Staples XLP -0.12% and Healthcare XLV -0.30% were the strongest sectors.

Friday, Monday, Tuesday Bull Flag Entry Signals

Friday's Movement

Continued to Rise – EXPE, ILMN, ESRX, A, GES, NYX,

Pulled Back – HUM, CY, AMZN, CROX, CTRP, XRAY, MICC, CHKP, VECO, ACN, GLW, V, ISRG, EXPD, FFIV, ARUN, GMCR, VMW, AMD, ATI, CSTR, DHR, DLR, TIF, WDC, CTXS, BBBY, DTV, TUP, CAT, CIEN, DOW, UNP, URE, WYNN

Bull Flag Setups – F, SMH, SNDK, SWKS, SWN, UNG, ALTR, LLTC, QCOM, PCLN, CELG

No longer flag patterns: NVDA, MCP, SINA, BIDU, SOHU

SPX

Resistance: 1,344, 1,352, 1,367

Support: 1,330, 1321, 1310

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 -6.07 – large black candle break below 30 DMA

AMZN -3.51 – bearish engulfing

BIDU -6.92 – large black candle break support, below 30DMA

GOOG -5.50 – black candle, continue below 30 DMA

NFLX +0.75 – white spinning top

PCLN -3.35 – inverted hammer at support, below 30 DMA

QCOM -0.22 – potential bearish harami

NDX 100 stocks stronger than the NDX include ERTS, ILMN, AMGN, WCRX, BRCM, NFLX, ROST, ESRX, EXPE, GENZ, MYL, NTAP, WFMI, LRCX and EBAY.

Stocks weaker than the NDX include NVDA, CA, BIDU, FSLR, YHOO, PCAR, MU, MRVL, EXPD, HSIC, CTRP, AMAT, SNDK, SIAL and SYMC.

Stocks to Watch on Monday

Holding Above 30 DMA

HUM, HLF, CSTR, DHR, A, ANF, DLR, TIF, V, NYX, CIEN, VMW, URE, ATI, TLT, MHS, AMD, GES, SMH, JDSU, UNP, VECO, HAS, UAL, GMCR, GLW, RVBD, ESI, CMG, FAZ, CRM, JNPR

Moving Above 30 DMA = 0

Moving Below 30 DMA = 6

ACN, CHL, DOW, F, NVDA, SWN

Staying Below 30 DMA

CF, FWLT, ICE, ZION, CAT, IL, NDAQ, SNDK, STI, SWK, SWKS, VLO, WDC, ARUN, MCP, SINA, WLT, FAS, LVS, SOHU, UNG, UCO, DE, NETL, NGLS, PCX, AGU, AKS, ATW, FCX, IPI, LDK, SLB, TSL, CLF, DECK, NTES, POT, JEC, SLW, IAG, GS, CDE, TBT, MOS, X, CAM, BAC, CRUS

Intermediate Term Market Trend: Up

Short Term Market Trend: Neutral


As some of you may have discovered on your own, Blogger had system wide technical difficulties since sometime on Thursday.  I was able to post Thursday morning but not Thursday evening or Friday until 4:16 pm PDT.  Apparently, to correct whatever their techincal issues were, Blogger had to remove all posts after a certain time on Wednesday and then restore those posts on all blogs.  While I have seen glitches over the past two years for a few minutes or an hour or so, this is the first day plus glitch that I have seen.

While it had nothing to do with Chart Signals as the cause, I apologize to any of you that accessed Chart Signals over the past two days and wondered why there was no new post Thursday evening and Friday morning.  I was not even able to log in a post a note about not being able to post.