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.

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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

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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