SPX Reaches 1,334 Price Target as Expected...Have a Great & Safe Memorial Day Weekend...

The SPX formed a white candle and closed +5.41 at 1,331.10 continuing the support bounce that began on Wednesday.  The SPX continues in a four week consolidation downward sloping price channel and reached its short-term support bounce price target of 1,334 at the channel resistance line, exactly in line with our expectation.  You can view that highlighted expectation in Wednesday’s post.

The SPX is at diagonal resistance.  On Tuesday watch for either a break of the resistance line or the break of the low on Friday, which is 1,325 on the SPX.  Watch for a similar move in the INDU, COMPQ, NDX and RUT. 

Remember consolidation patterns like the last four weeks are generally trend continuation patterns and it is most probable that price will ultimately break out of resistance and continue the prior up trend.  We will watch on Tuesday to see if there is more consolidation or a breakout in the making.

The SPY also reached its price channel resistance target of 133.75, before closing at 133.51.  Watch for a break of resistance or the break of the low of Friday at 132.96.

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SPX white candle, below 30 DMA +0.41%

INDU spinning top, below 30 DMA +0.31%

COMPQ white candle, below 30 DMA +0.50%

RUT white candle, at 30 DMA +0.65%

Breadth strengthened slightly as advancers led decliners 2.82 to 1 on the NYSE and weakened slightly as advancers led decliners 1.75 to 1 on the NASDAQ …

Exchange       NYSE        NASDAQ

Advancers      2,224            1,652

Decliners           786               939

Index              Chg.    Close    Direction    Confirmation

VIX                 -0.11     15.98      Down           Yes – SPX

SOX              +4.85    433.09      Up               Yes – COMPQ

Leading stocks > +2% on Friday included LDK, FFIV, CDE, NDAQ, CY, NVDA, MCP, UNG, CF, INFA, FCX, ZION, AGU, FAS, FWLT, CIEN, GS, BAC

Losing stocks < -2.0% included MHS, WTW, SWKS, FAZ

Positives – SPX, RUT, COMPQ, breadth and sectors continued strong, XLF, AAPL, BIDU, GOOG, NFLX, Euro

Negatives – TNX, TLT, AMZN, PCLN

Interest rates TNX +0.03 inched higher.  Bond ETF TLT moved down 4 cents.  The Euro moved up 169 pips to 1.4313 at 5 pm on Friday.

Eight of nine sectors moved higher on Friday and XLU was unchanged.  Materials XLB +1.08% and Financials XLF +0.71% were the strongest sectors.

Thursday's charts on Friday...

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Charts to watch on Tuesday...

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SPX

Resistance: 1,330, 1,344, 1,352

Support: 1,321, 1,310, 1,300

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 +2.41 – white candle, close above 10 DMA, below 30DMA

AMZN -0.87 – spinning top, close below 30 DMA

BIDU +3.98 – large white candle following hammer, below 30 DMA

GOOG +2.77 – spinning top confirms bullish harami, below 30 DMA

NFLX +0.76 – doji, above 30 DMA

PCLN -3.67 – spinning top, below 30 DMA

QCOM +0.18 – doji, above 30 DMA

NDX 100 stocks stronger than the NDX include MRVL, BRCM, FFIV, MICC, NVDA, BIDU, FSLR, CTRP, LINTA, MU, NWSA, TEVA, MYL, MXIM and NIHD.

Stocks weaker than the NDX include VRSN, ESRX, VRTX, STX, INTC, AMAT, SRCL, PCAR, ILMN, EXPD, PCLN, ADBE, AMGN, BBBY and CTSH.

Stocks to Watch on Tuesday

Holding Above 30 DMA

HUM, TPX, HLF, CSTR, ANF, DLR, TIF, COH, TLT, CY, FFIV, UNP, VECO, UAL, GMCR, KKD, RVBD, FAZ, ACN, CMG, SWN, VMW, CF, CREE, INFA, CRM, IAG, ATW, ENTR, NGLS, V, DECK, GES, NVDA, POT, URE

Moving Above 30 DMA = 9

AGU, AKS, ANR, CHL, CRUS, DHR, FCX, STI, UNG

Moving Below 30 DMA = 4

ESI, ICE, MHS, WTW

Staying Below 30 DMA

HAS, A, JDSU, JNPR, SMH, SWK, ARUN, GLW, SNDK, ATI, CIEN,  DOW, F, FWLT, ZION, CAT, IL, NDAQ, SWKS, WDC, MCP, SINA, WLT, FAS, LVS, SOHU, UCO, DE, NETL, PCX, LDK, SLB, TSL, CLF, NTES, SLW, GS, CDE, TBT, MOS, X, CAM, BAC

Intermediate Term Market Trend: Up

Short Term Market Trend: Up

Deleted – AMD, NYX, JEC, IPI, VLO

Added – CY, COH, ENTR, FFIV, INFA, KKD, TPX, WTW