Rolly Polly Support Bounce Rumbles Up the Chart on the First Day of Summer...Are You Surprised?

The SPX opened higher and closed up +17.16 to close at 1,295.36.  The SPX support bounce that started on Friday gained broad and strong upward momentum on Tuesday and closed above last week’s high.  It is a close above the high of the low week.  Once again the bullish divergence on the SPX/SPY MACD histogram gives us the right signal.

The COMPQ, NDX and RUT each gained more than two percent…a monster day for a broad index.  The INDU, RUT and COMPQ each closed above last week’s high.

Some say stocks don’t crash up…Is it true?  I guess it depends on how large a move it takes to be a crash.  On Tuesday SINA +18.55%, RIMM +10.27%, ARUN +9.10%, BIDU +7.97%, PCX +7.51%, CRUS +6.75%, RVBD +6.64%, PCLN +6.28%, SOHU +6.20%, WFM +6.17%, SLW +5.94%, CF +5.92%, ENTR +5.89%, MOS +5.53% and FFIV +4.91% led our watch list and the NDX 100 higher.

Ninety four of the NDX 100 rose and ten rose above their 30 DMA on Tuesday following eight that crossed above the 30 DMA on Monday.  Eighty eight of the ninety four stocks in our watch list stocks rose, while fourteen stocks crossed above their 30 DMA following the eight that crossed above on Monday.

So you tell me, did stocks crash up on Tuesday?

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SPX large white candle, below 30 DMA +1.34%

INDU large white candle, below 30 DMA +0.91%

COMPQ large white candle, below 30 DMA +2.19%

RUT large white candle, below 30 DMA +2.27%

Breadth strengthened as advancers led decliners 5.86 to 1 on the NYSE and 3.87 to 1 on the NASDAQ …

Exchange       NYSE        NASDAQ

Advancers      2,612            2,101

Decliners          445               542

Index              Chg.    Close    Direction    Confirmation

VIX                 -1.13     18.86      Down         Yes – SPX

SOX               +9.88   398.61      Up              Yes – COMPQ

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Leading stocks > +2% on Tuesday included SINA, ARUN, PCX, CRUS, RVBD, SOHU, SLW, CF, ENTR, MOS, FFIV, IAG, NTES, ANR, CDE, POT, JDSU, DECK, WLT, GES, NETL, WDC, FCX, SWKS, VMW, FAS, ATW, CIEN, GMCR, VECO, LVS, WTW, CMG, CAT, CRM, DOW, CSTR, IL, CLF, HLF, A, F, AGU, KKD, TSL, FWLT, CAM, DE, SNDK, JNPR, TIF, ATI, ANF, UNG, TPX, CY, SWN, SMH, NVDA, BAC, DHR, INFA, CVLT, TIBX, MNTA, LULU, TSCO, FOSL, HS, ULTA

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Losing stocks < -2.0% included FAZ

Positives – SPX, VIX, INDU, COMPQ, RUT, Euro, TNX, breadth and sectors strengthened, AAPL, AMZN, BIDU, GOOG, NFLX, PCLN, QCOM

Negatives TLT

Eight of nine sectors moved higher on Tuesday.  Materials XLB +2.57% and Consumer Discretionary XLY +2.04% were the strongest sectors.

Bond ETF TLT moved down 43 cents.  Financials XLF moved up 21 cents.  The Euro moved up 112 pips to close at 1.4413 at 5 pm on Monday.

SPX

Resistance: 1,300, 1,310, 1,321

Support: 1,288, 1,278, 1,267

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 +9.98– morning star, below 30 DMA

AMZN +6.51 – large white candle, close above 30 DMA

BIDU +9.43 – large white candle confirmed inverted hammer, below 30 DMA

GOOG +8.42 – white candle confirmed dragonfly doji, below 30 DMA

NFLX +8.02 – morning star, close below 30 DMA

PCLN +28.83 – large white candle, below 30 DMA

QCOM +0.95 – large white candle confirmed piercing line, below 30 DMA

NDX 100 stocks stronger than the NDX include RIMM, BIDU, PCLN, WFM, FFIV, VMED, MRVL, JOYG, ADSK, GMCR, AMZN, ADBE, EBAY, EXPE and NFLX.

Stocks weaker than the NDX include SHLD, GILD, AMGN, FSLR, FLIR, GENZ, ISRG and BIIB.

Stocks to Watch on Wednesday

Holding Above 30 DMA

TIF, KKD, FAZ, ESI, CROX, GMCR, TLT, ZION, COH, DLR, HUM, ICE, INFA, NKE, TPX, UAL, UNP

Moving Above 30 DMA = 14

A, AGU, CAM, CF, CHL, CMG, CRM, FCX, GES, HLF, NETL, POT, SLB, VMW

Moving Below 30 DMA = 0

Staying Below 30 DMA

AKS, NGLS, UNG, ACN, FFIV, IAG, TBT, SWN, CY, V, VECO, ATW, CREE, RVBD, ANF, NVDA, SINA, ANR, WTW, CLF, CRUS, CSTR, DECK, DHR, ENTR, FWLT, SMH, SNDK, STI, URE, MHS, HAS, JDSU, JNPR, SWK, ARUN, GLW, ATI, CIEN,  DOW, F, CAT, IL, NDAQ, SWKS, WDC, MCP, WLT, FAS, LVS, SOHU, UCO, DE, PCX, LDK, TSL, NTES, SLW, GS, CDE, MOS, X, BAC

Intermediate Term Market Trend: Neutral

Short Term Market Trend: Up