Monday, August 22, 2011

SPX Gaps Higher Closes +0.29 at 1,123, Forms Inverted Hammer...


After gapping higher and finding resistance at 1,144, sellers began to fade the gap and pushed the SPX down to 1,121 before noon.  The SPX closed up +0.29 at 1,123.82.  The SPX is still potentially forming both a double bottom and MACD histogram bullish divergence.  The 1,100 area continues to be an important support level.

In addition to the potential double bottom and bullish divergence are these technical indications:

Advancers increased on the NYSE from 732 to 1,337
Decliners decreased on the NYSE from 2,308 to 1,692
Volume on the SPY dropped 154 million shares from 428 million shares on Friday to 274 million shares on Monday, continuing a classic double bottom decrease
Four sectors rose on Monday compared with zero on Friday

NDX black candle at support, below 30 DMA +0.32%
SPX inverted hammer at support, below 30 DMA +0.03%
INDU inverted hammer at support, below 30 DMA +0.34%
COMPQ black candle at support, below 30 DMA +0.15%
RUT black candle at support, below 30 DMA -0.06%

Breadth strengthened as decliners still led advancers 1.26 to 1 on the NYSE and 1.18 to 1 on the NASDAQ

Exchange       NYSE        NASDAQ
Advancers      1,337           1,185
Decliners        1,692           1,408

Index         Change    Close    Direction    Confirmation
VIX               -0.61       42.44       Down         Yes – SPX
SOX             +2.62     328.94       Up              Yes – COMPQ

Take a look at the charts of CF and MCP for breakout and support bounce setups.


Also look at the option premium on SPY, AAPL, ADBE, BRCM and EBAY to mention just a few stocks near support with a potential double bottom and potential bullish divergence paying nice weekly or Sep premium when looking at Return on Capital.   Potentially attractive setups depending on a trader's rules for an entry at support.

Leading stocks > +2% on Monday CDE, IAG, SLW, GES, CF, UCO, FAZ, TIF, MCP, LDK, COH, ENTR, NETL, ACN, CHL

Losing stocks < -2.0% included BAC, CREE, GS, ZAGG, FAS, PCX, NGLS, ATW, UAL, X, C, DOW, CMG, WLT, ANR

Four of nine sectors moved higher on Monday.  Technology +0.53%, Industrials +0.38%, and Consumer Staples XLP +0.30% were the strongest sectors.

Interest rates TNX closed +0.17 at 20.88, bond ETF TLT fell 28 cents and Financials XLF was down 15 cents.  The Euro moved down 36 pips to close at 1.4358 at 5 pm on Monday.

SPX
Resistance: 1,134, 1,146, 1,158
Support: 1,119, 1,103, 1,080

The short term 3 day trend is down.
The six-month trend is down.
The twelve-month trend is neutral.

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 +0.41 large black candle, below 30 DMA
AMZN -1.39 – large black candle, below 30 DMA
BIDU -0.33 – large black candle, below 30 DMA
GOOG +7.25 – spinning top, below 30 DMA
NFLX -0.00 – large black candle, below 30 DMA
PCLN -2.63 – large black candle, below 30 DMA
QCOM -0.12 – black candle at support, below 30 DMA

NDX 100 stocks stronger than the NDX include URBN, ADSK, ALTR, ATVI, CTXS, MXIM, CTSH, ADBE, BBBY and GRMN.

Stocks weaker than the NDX include SIRI, ISRG, JOYG, VRTX, NIHD, AKAM, CTRP, ILMN, FSLR and WYNN.

Stocks to Watch on Tuesday
Holding Above 30 DMA = 5
FAZ, TLT, CF, CHL, SLW
Moving Above 30 DMA = 2
CDE, IAG
Moving Below 30 DMA = 0

Staying Below 30 DMA
LDK, ZAGG, CREE, GMCR, NGLS, NTES, CROX, MCP, CDE, DECK, LVS, SOHU, HLF, CAM, CMG, IAG, MHS, MOS, SNDK, SWKS, TPX, V, WTW, ESI, ANF, ATW, COH, FCX, GS, POT, SLB, WLT, NKE, SINA, SWN, ACN, AGU, DOW, UCO, UNP, VMW, CLF, ANR, ATI, CAT, CIEN, CRM, CRUS, CY, DLR, FAS, ICE, JNPR, NDAQ, SMH, STI, TIF, URE, WDC, AKS, CSTR, DE, PCX, TBT, X, ZION, KKD, NETL, DHR, FFIV, SWK, UNG, ARUN, RVBD, HUM, ENTR, INFA, A, F, GES, HAS, BAC, TSL, UAL, VECO, NVDA, FWLT, JDSU, GLW, IL

Intermediate Term Market Trend: Down
Short Term Market Trend: Down

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