SPX...Five Days...+5.5%...71 Points...Sizzling Celebration Heading into July 4

Rising interest rates, falling dollar, rising Euro, rising financial stocks, falling bonds set the back drop as the SPX had it strongest weekly rise in more than a year, rising 71 points or 5.5% for the week.  Last week we showed you the inverted hammer on the weekly chart.  This week the SPX delivered a mega bullish engulfing pattern on the weekly chart. 

The SPX moved up +19.03 to close at 1,339.67, six points shy of its 1,345 resistance level.  The SPX has risen 81 points since its low on June 16, which is 72% of its trading range between 1,370 and 1,258.

(click image to enlarge)

SPX large white candle, above 30 DMA +1.44%

INDU large white candle, above 30 DMA +1.36%

COMPQ large white candle, above 30 DMA +1.53%

RUT large white candle, above 30 DMA +1.52%

The very strong earnings reaction on both NKE and DRI this week suggests institutions are willing to aggressively pay higher prices for stocks with strong earnings.  Earnings season starts a week from Monday on July 11.

Breadth strengthened as advancers led decliners 4.70 to 1 on the NYSE and 2.84 to 1 on the NASDAQ …

Exchange       NYSE        NASDAQ

Advancers      2,479            1,910

Decliners           527               671

Index              Chg.    Close    Direction    Confirmation

VIX                 -0.65     15.87      Down          Yes – SPX

SOX              +8.76    419.11      Up               Yes – COMP

Leading stocks > +2% on Friday included CRUS, NTES, FAS, SINA, WLT, V, SOHU, LVS, ENTR, URE, ESI, NDAQ, COH, HUM, SNDK, HAS, CROX, DHR, ANR, ANF, WTW, GS, FFIV, DE, NETL, CMG, IL, STI, UNP, SWK, GLW, SWN, DEC, JDSU, NKE,, CAT, SMH, SWKS

Losing stocks < -2.0% included FAZ, TSL, MCP

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

Negatives – TLT

All nine sectors moved higher on Friday.  Consumer Discretionary XLY +2.01%, Financials XLF +1.82% and Industrials XLI +1.80% were the strongest sectors.

Interest rates TNX rose +0.39, bond ETF TLT fell 15 cents and Financials XLF rose 28 cents.  The Euro moved up 20 pips to close at 1.4521 at 5 pm on Friday.

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 +7.59– large white candle, above 30 DMA

AMZN +5.00 – large white candle, breakout, above 30 DMA

BIDU +3.21 – white candle breakout continuation, above 30 DMA

GOOG +14.64 – large white candle, breakout, close above 30 DMA

NFLX +5.30 – bullish engulfing, above 30 DMA

PCLN +12.86 – large white candle, breakout, above 30 DMA

QCOM +1.09 – large white candle, above 30 DMA

NDX 100 stocks stronger than the NDX include APOL, MU, WYNN,SNDK, NTAP, GOOG, FLEX, URBN, YHOO, FFIV, ALTR and PCLN.

Stocks weaker than the NDX include VRTX, CHKP, AMGN, ESRX, AKAM and MSFT.

Stocks to Watch on Tuesday

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, TSL, UNP, WDC, ZION, ATI, DE, FAS, GES, MCP, MOS, NDAQ, SWN, URE, V,  X, DHR, SINA, SMH, SWK

Moving Above 30 DMA = 9

BAC, CY, F, GS, HAS, SOHU, STI, WLT, WTW

Moving Below 30 DMA = 0

Staying Below 30 DMA

CF, FAZ, TLT, UAL, UNG, IAG, VECO, CREE, ANF, NVDA, ANR, FWLT, SNDK,  MHS, JDSU, JNPR, GLW, CIEN,  IL, SWKS, UCO, SLW, CDE

Intermediate Term Market Trend: Neutral

Short Term Market Trend: Up