Wednesday, May 25, 2011

SPX Bounces at Support...Forms Bullish Engulfing...


The SPX formed a small bullish engulfing outside day and closed +4.19 at 1,320.47, with price reaching an intraday low at 1,311 near its price channel support and one point below Monday’s low.  The SPX continues in a three week consolidation downward sloping price channel or complex flag and did reach the area of its potential price target around 1,310.  If Tuesday’s slowing momentum and Wednesday upward momentum holds, the price channel indicates a support bounce price target of 1,334 the channel resistance line.

The SPY price channel support also held.  Potential support bounce entry would be above 132.46 with a potential price target of 133.75.   The VIX closed lower confirming Wednesday’s bounce.
(click image to enlarge)

SPX small bullish engulfing, close below 30 DMA +0.32%
INDU small bullish engulfing, close below 30 DMA +0.31%
COMPQ piercing line, close below 30 DMA +0.55%
RUT bullish engulfing, below 30 DMA +1.30%

Breadth strengthened as advancers led decliners 1.90 to 1 on the NYSE and 1.96 to 1 on the NASDAQ

Exchange       NYSE        NASDAQ
Advancers      1,979            1,728
Decliners        1,037               881

Index              Chg.    Close    Direction    Confirmation
VIX                 -0.75     17.07      Down           Yes – SPX
SOX              +4.00   424.21      Up              Yes – COMPQ

Leading stocks > +2% on Wednesday included FWLT, ARUN, ANR, PCX, UCO, CIEN, AGU, CF, SLW, POT, SOHU, RVBD, GES, VMW, IPI, FCX, VECO, IL, LVS, SINA, ATW, CRUS, DOW

Losing stocks < -2.0% included LDK, MCP, UAL

Positives – RUT, SPX, VIX, INDU, COMPQ, breadth and sectors strengthened, AAPL, NFLX, PCLN, QCOM

Negatives – TLT, AMZN

Interest rates TNX +0.06 rose slightly.  Bond ETF TLT moved down 45 cents.  The Euro moved down 14 pips to 1.4084 at 5 pm on Wednesday.

Seven of nine sectors moved higher on Wednesday.  Energy XLE +1.69% and Materials XLB +1.41% were the strongest sectors.

SPX
Resistance: 1,321, 1,330, 1,344
Support: 1,310, 1,300, 1,288

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 +4.59 – large white, below 30DMA
AMZN -1.01 – spinning top, close below 30 DMA
BIDU +0.28 – inverted hammer, below 30 DMA
GOOG +1.41 – inverted hammer, below 30 DMA
NFLX +11.87 – large white candle breakout, close above 30 DMA
PCLN +7.89 – piercing line, bullish MACD divergence, below 30 DMA
QCOM +0.89 – white candle confirm hammer, above 30 DMA

(click image to enlarge)
NDX 100 stocks stronger than the NDX include NFLX, FLEX, ERTS, ROST, FAST, FFIV, LLTC, PCLN, QCOM, JOYG, CTSH, ALTR, ILMN,EXPD and AAPL.

Stocks weaker than the NDX include FSLR, APOL, URBN, SPLS, WCRX, MYL, COST, BIIB, VRTX, CELG, STX, INFY, CTRP, GRMN and AMZN.

Stocks to Watch on Thursday
Holding Above 30 DMA
HUM, HLF, CSTR, ANF, DLR, TIF, TLT, MHS, UNP, VECO, HAS, UAL, GMCR, KKD, RVBD, FAZ, ACN, ICE, CMG, SWN, VMW, CF, CREE, CRM, IAG
Moving Above 30 DMA = 4
ATW, NGLS, UNG, V
Moving Below 30 DMA = 0

Staying Below 30 DMA
A, DHR, GES, JDSU, JNPR, SMH, SWK, URE, ARUN, STI, AMD, ESI, GLW, SNDK, ATI, CIEN, NYX, CHL, DOW, F, NVDA, FWLT, ZION, CAT, IL, NDAQ, SWKS, VLO, WDC, MCP, SINA, WLT, FAS, LVS, SOHU, UCO, ANR, DE, NETL, PCX, AGU, AKS, FCX, IPI, LDK, SLB, TSL, CLF, DECK, NTES, POT, JEC, SLW, GS, CDE, TBT, MOS, X, CAM, BAC, CRUS

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

2 comments:

Paula said...

Dave,
I like your drawings on the charts. Your blog posts are very informative. Thank you
Paula

Anonymous said...

Thanks Dave for the great pictures of price targets and MACD bullish divergences. They are very helpful and confirmed what I was seeing.
Your grateful student,
Deborah