SPX Forms Bullish Harami as GOOG Rises 68 to Close at 597...

Dave is teaching Advanced Technical Analysis and Trading to almost 300 traders in Washington D.C. on Monday and Tuesday...


Many of you know that I have been teaching for years that trading is a decision making process.  Decision making has to do with a person's thinking.  As a result the better we can think the better the decisions we can make.

Different groups including marketers, financial participants and policy makers like to adopt slogans.  Sometimes the slogans or cliches that sound plausible are either incomplete or an oversimplification.

Locally there was a slogan "we give 110%" which was used by a local bank for years.  One day may son said, "it's actually not possible to give a 110%, we can only give everything we have which is 100%."  Technically my son is correct, most us of can not give something we don't have.  For example we can not give someone else 26.6 hours in one day.  Why? We only have 24 hours and 24 is the maximum we can give in one day.

In the trading business we hear many people us the cliche "cut your losses short and let your profits run."  Sounds plausible, but let our profits run where?  For most traders that I have observed the cliche seems to mean let their profits run...away.

In contrast, I teach a rule instead of a cliche, which is let your profits run to your target and then sell.

In public policy discussion there is a currently a slogan that the rich should pay their fair share.  Sounds totally plausible, except it is incomplete like most slogans and cliches.  The reality is that everyone...rich, middle class and poor should pay their fair share.

However, the idea that doesn't seem to get any coverage in that slogan is the question, is the amount being spent fair or unfair?  Can anyone including the rich actually pay their fair share of unfair expenditures? 

Conceptually we can pose the question, is there actually a fair share of an unfair amount?

Just like trading, public policy is a decision making process.  What we need is good thinking and then good performance from all public servants.

We have all heard that the best definition of insanity is doing the same thing over and over again and expecting different results.

To get different results in the economy, we need to have different policies that achieve those different results.

Unfortunately right now we are getting a whole lot of spin from every side and absolutely no new results.

For you and I as traders we need to face the reality that there are too many slogans and cliches, too few real changes for the better in the public arena and in spite of that we need to make good trading decisions.  If the trend is up, trade up.  If the trend is down, trade down.

GOOG reported better than expected earnings after the close on Thursday and rose more than $68 on Friday. AAPL hit a new all time high close on Friday.

Earnings season picks up this week with more than 400 companies reporting this week including:
Monday - HAL, HAS, IBM, MOS, STLD, SWK, WYNN, ZION
Tuesday – AAPL, ALTR, BAC, BTU, CMG, CSX, HOG, ISRG, JNJ, KEY, KO, RVBD, STT, STX, UNH, VMW, WFC, YHOO
Wednesday - AMLN, AMR, AMX, AXP, BIDU, CA, EBAY, EMC, FCX, FFIV, LCC, QCOM, STJ, UTX, WDC, XLNX

SINA, SOHU, CRUS, SLW, IAG, ENTR, NTES and X moved up on Friday and all except X are above their 30 DMA. X closed just under its 30 DMA.

Momentum turned up slightly on Friday and the SPX formed an inside day and bullish harami. The SPX stayed below Monday’s R1 and closed up +7.27 at 1,316.14.

(click image to enlarge)

SPX bullish harami, above 30 DMA +0.56%

INDU bullish harami, above 30 DMA +0.34%

COMPQ hammer bullish harami, above 30 DMA +0.98%

RUT bullish harami, above 30 DMA +0.66%

Breadth strengthened as advancers led decliners 1.56 to 1 on the NYSE and 1.44 to 1 on the NASDAQ …

Exchange       NYSE        NASDAQ

Advancers      1,810           1,524  

Decliners        1,159           1,057

Index              Chg.     Close    Direction     Confirmation

VIX                 -1.27       20.80     Down           Yes – SPX

SOX              +2.31      390.07     Up               Yes – COMPQ

Leading stocks > +2% on Friday included ATI, SWN, PCX, CDE, ATW, UNG, CAM, UCO, CF, CRUS, ANR, ARUN, CRM, KKD, SLB, AKS, SINA, SLW, VMW, CIEN, URE, FCX, POT

Losing stocks < -2.0% included INFA

Seven of nine sectors moved higher on Friday.  Energy XLE +2.69% and Technology XLK +1.09% were the strongest sectors. 

Interest rates TNX fell -0.36, bond ETF TLT rose 16 cents and Financials XLF was down 3 cents.  The Euro moved rose 14 pips to close at 1.4154 at 5 pm on Friday.

SPX

Resistance: 1,321, 1,330, 1,344

Support: 1,310, 1300, 1,288

The short term 3 day trend is neutral.

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.

(click image to enlarge)

AAPL +7.15 – white candle breakout, new high close, above 30 DMA

AMZN +2.49 –dragon fly doji bullish harami, bull flag setup, above 30 DMA

BIDU +6.11 – white candle, bull flag entry, above 30 DMA

GOOG +68.68 – gap up doji, above 30 DMA

NFLX +0.31 – hammer bullish harami, bull flag setup, above 30 DMA

PCLN +2.78 – doji bullish harami, bull flag setup, above 30 DMA

QCOM +0.04 –bullish harami, flag setup, above 30 DMA

NDX 100 stocks stronger than the NDX include GOOG, BIDU, CTXS, FFIV, VRSN, WYNN, ALXN, NTAP, AAPL, JOYG, GMCR and EBAY.

Stocks weaker than the NDX include FLIR, FLEX, PAYX, MYL, CMCSA, ILMN, AMGN, FISV, CTRP and ESRX.

Stocks to Watch on Monday

Holding Above 30 DMA

TIF, KKD, CROX, GMCR, TPX, AGU, CMG, CRM, HLF, VMW, ATW, NGLS, CHL, CLF, ENTR, ESI, ACN, CSTR, FFIV, ICE, POT, RVBD, AKS, CAM, CAT, COH, CRUS, DECK, DLR, FCX, LVS, NKE, NTES, PCX, SLB, WDC, SWN, URE, V, SINA, SOHU, WTW, ANF, CDE, SLW, TLT, CF, HUM, IAG, FAZ

Moving Above 30 DMA = 8

ANR, ARUN, ATI, DHR, MOS, UCO, UNG, ZION

Moving Below 30 DMA = 0

Staying Below 30 DMA

DE, INFA, NETL, SWK, X, DLR, CY, SMH, SWKS, A, DOW, F, FAS, GES, HAS, JNPR, MCP, NDAQ, SNDK, TBT, WLT, GS, STI, LDK, BAC, TSL, TLT, UAL, UNG, VECO, CREE, NVDA, FWLT, MHS, JDSU, GLW, CIEN, IL

Intermediate Term Market Trend: Neutral

Short Term Market Trend: Neutral