SPX Inches Higher as Selloff Fails to Break Friday's S1...

On Wednesday the SPX overcame the impact Moody’s downgrade of Portugal’s credit rating, an interest rate increase in China, falling financial stocks, interest rates and Euro and after falling in the morning finished in positive territory by the end of the day.  The COMPQ with a smaller weighting of financial stocks had a slightly larger increase. 

The SPX was up +1.34 to close at 1,339.22.  The positive side is that after two days of pause, the SPX has remained above Friday’s S1 at 1,330.  This indicates that profit-takers didn’t have a lot of selling pressure and in the end the buying pressure is stronger as it absorbed all the selling and then moved higher.

 AAPL, AMZN, GOOG, NFLX, PCLN and QCOM all finished higher on Wednesday.

Gold and silver stocks moved higher while agriculture and oil stocks pulled back.  We’re still watching to see if the two day increase in the dollar and the down tick in the Euro and interest rates turns out to be a fake out.

Since the SPY did not break Friday’s S1, stay with the short term trend until it breaks support.  As we wrote last night, traders have different rules for a short term high day and those looking for a move below Tuesday’s low may have exited, however those that look for a close below did not get an exit signal.  There is still another 31 SPX points to horizontal resistance.  

(click image to enlarge)

SPX potential bearish harami, above 30 DMA +0.10%

INDU spinning top, above 30 DMA +0.45%

COMPQ white spinning top, above 30 DMA +0.29%

RUT potential hanging man, above 30 DMA +0.43%

Breadth strengthened slightly as advancers led decliners 1.29 to 1 on the NYSE and 1.31 to 1 on the NASDAQ …

Exchange       NYSE        NASDAQ

Advancers      1,678            1,301

Decliners        1,298            1,273

Index              Chg.    Close    Direction    Confirmation

VIX                 +0.28     16.34     Up               No – SPX

SOX                -4.17    411.79     Down          No – COMPQ

Leading stocks > +2% on Wednesday included SLW, ESI, CDE, VMW, SWKS, FFIV

Losing stocks < -2.0% included VECO, WLT, MCP, TSL, ATI, X, CREE, UNG, LDK, NDAQ, BAC, CIEN, NTES, ANR, PCX

Positives – INDU, COMPQ, RUT, TLT, AAPL, GOOG, NFLX, QCOM

Negatives – XLF, SOX, TNX, Euro, VIX

Six of nine sectors moved higher on Wednesday.  Industrials XLI +0.54% and Consumer Staples XLP +0.54% were the strongest sectors.  Financials XLF -0.52% was the weakest sector for the second straight day.

Interest rates TNX moved down -0.41, bond ETF TLT rose 48 cents and Financials XLF was down 8 cents.  The Euro moved down 103 pips to close at 1.4319 at 5 pm on Wednesday.

SPX

Resistance: 1,344, 1,359, 1,370

Support: 1,330, 1,321, 1,310

The short term 3 day trend is up.

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.

AAPL +2.33– white candle, above 30 DMA

AMZN +1.00 – white candle, above 30 DMA

BIDU -0.03 – spinning top, above 30 DMA

GOOG +2.92 – potential shooting star, pause at resistance, above 30 DMA

NFLX +1.33 – white candle, above 30 DMA

PCLN +0.76 – spinning top, above 30 DMA

QCOM +0.26 – white candle, breakout setup, above 30 DMA

NDX 100 stocks stronger than the NDX include URBN, FFIV, COST, GILD, GMCR, HSIC, YHOO, CTXS, WCRX and WYNN.

Stocks weaker than the NDX include RIMM, VRTX, NWSA, LRCX, MU, KLAC, CMCSA, VMED, NVDA and SBUX.

Stocks to Watch on Thursday

Holding Above 30 DMA

TIF, KKD, CROX, GMCR, HUM, INFA, TPX, AGU, CMG, CRM, HLF, NETL, VMW, ATW, NGLS, CHL, CLF, ENTR, ESI, ACN, CSTR, ARUN, FFIV, ICE, POT, RVBD, TBT, A, AKS, CAM, CAT, COH, CRUS, DECK, DLR, DOW, FCX, LDK, LVS, NKE, NTES, PCX, SLB, UNP, WDC, ZION, DE, FAS, GES, MOS, NDAQ, SWN, URE, V,  X, DHR, SINA, SMH, SWK, CY, F, HAS, SOHU, WTW, ANF, CDE, SLW

Moving Above 30 DMA = 0

Moving Below 30 DMA = 6

ATI, BAC, MCP, SNDK, TSL, WLT

Staying Below 30 DMA

GS, STI, CF, FAZ, TLT, UAL, UNG, IAG, VECO, CREE, NVDA, ANR, FWLT, MHS, JDSU, JNPR, GLW, CIEN,  IL, SWKS, UCO

Intermediate Term Market Trend: Neutral

Short Term Market Trend: Up