SPX Reverses, Closes Lower and Above Recent Support...

After regaining on Thursday, most of the gap down in the ES on Wednesday night, the SPX sold off on Friday down -15.05 to close at 1,268.45.  The sell off followed a weak earnings report from Micron MU after the close on Thursday.  MU -14.47% on Friday was the weakest stock in the NDX 100. Semiconductors SOX -2.50% led the NDX -1.68% lower.

On Friday the Euro, interest rates and financial stocks were down and the dollar was up.

Perhaps the most intriguing part of Friday’s action was that the RUT -0.61% was the strongest broad index.  Another factor to consider is that NDX leaders AAPL, AMZN, BIDU, GOOG, NFLX, PCLN and QCOM were relatively stronger compared to Thursday's price action and stayed above Thursday’s S1 level.  NFLX +1.24 was up.

Next week is the last week of the quarter so expect end of quarter portfolio dressing.  While earnings season starts on July 11, reports next come from NKE on Monday, FDO, GIS and MON on Wednesday, APOL, STZ, DRI and MKC on Thursday.

Technically the SPX is holding above its 1,257 support area.  After falling 102 points in six weeks, the SPX has traded in a 40 point range between 1,258 and 1,298 the past two weeks.  While big money has shown they are buyers at the 1,260 area, good technical traders will expect support to hold and stay alert and prepared for a potential break of support.

Look at the bullish weekly candles on the SPX, RUT, INDU and COMPQ and the price in relationship to its 6 week moving average which is equivalent to the 30 DMA.

(click image to enlarge)

SPX large black candle, below 30 DMA -1.17%

INDU large black candle, below 30 DMA -0.96%

COMPQ black candle, below 30 DMA -1.26%

RUT black candle, below 30 DMA -0.61%

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      1,086            1,092

Decliners        1,913            1,538

Index              Chg.    Close    Direction    Confirmation

VIX                 +1.81     21.10      Up              Yes – SPX

SOX              -10.06   392.50     Down         Yes – COMPQ

Leading stocks > +2% on Friday included ENTR, MCP, CAN, FAZ, HANS

Losing stocks < -2.0% included SNDK, UAL, IAG, WDC, ZAGG, CIEN, SLW, JDSU, COH, ANF, CDE, X, NVDA, CRUS, SLB, LDK, V, SWK, ARUN, DECK, SMH, FAS, DE, VECO, NAR, MHS

Positives – NFLX, TBT, XLF and BIDU were less weak

Negatives – TNX, TLT, SPX, VIX, INDU, COMPQ, Euro, breadth and sectors weakened, AAPL, GOOG, PCLN, QCOM

Eight of nine sectors moved lower on Friday.  Utilities XLU +0.31% and Financials XLF -0.61% were the strongest sectors.

Bond ETF TLT moved down 41 cents.  Financials XLF moved down 9 cents.  The Euro moved down 69 pips to close at 1.4186 at 5 pm on Friday.

SPX

Resistance: 1,278, 1,288, 1,300

Support: 1,267, 1,257, 1,244

The short term 3 day trend is down.

The six-month trend is neutral.

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.

Look at the bullish weekly candles on the leading NDX stocks and last week's price action relative to their 6 week MA which is equivalent to the 30 DMA.

(click image to enlarge)

AAPL -4.88– black candle above Thursday’s S1, below 30 DMA

AMZN -1.61 – spinning top above Thursday’s S1, above 30 DMA

BIDU -0.54 – spinning top above Thursday’s S1, above 30 DMA

GOOG -5.34 – black candle, below 30 DMA

NFLX +1.24 – doji above Thursday's S1, above 30 DMA

PCLN -7.03 – black candle above Thursday’s S1, below 30 DMA

QCOM -0.77 – black candle above Thursday’s S1, below 30 DMA

NDX 100 stocks stronger than the NDX include BIIB, VRTX, FLEX, MYL, NWSA, NFLX, INFY and SPLS.

Stocks weaker than the NDX include MU, SNDK, FSLR, ORCL, RIMM, NTAP, CTRP, CSCO, EBAY, NVDA, URBN, AMAT, SHLD, MRVL and BMC.

Stocks to Watch on Monday

Holding Above 30 DMA

TIF, KKD, FAZ, CROX, GMCR, TLT, HUM, INFA, TPX, AGU, CMG, CRM, HLF, NETL, VMW, ATW, NGLS, CHL, CLF, ENTR, ESI

Moving Above 30 DMA = 2

ACN, CSTR

Moving Below 30 DMA = 10

A, COH, FFIV, GES, ICE, NTES, SWK, UAL, UNP, WDC

Staying Below 30 DMA

CAM, DLR, DOW, SLB, ZION, CF, FCX, NKE, POT, AKS, UNG, IAG, TBT, SWN, CY, V, VECO, CREE, RVBD, ANF, NVDA, SINA, ANR, WTW, CRUS, DECK, DHR, FWLT, SMH, SNDK, STI, URE, MHS, HAS, JDSU, JNPR, ARUN, GLW, ATI, CIEN,  F, CAT, IL, NDAQ, SWKS, MCP, WLT, FAS, LVS, SOHU, UCO, DE, PCX, LDK, TSL, SLW, GS, CDE, MOS, X, BAC

Intermediate Term Market Trend: Neutral

Short Term Market Trend: Neutral