SPX Closes Above the High of the Inside Day...Take Advantage or Disbelieve?

After a volatile futures ride Sunday night and Monday morning, the SPX formed and intra-day double bottom around 10:30 am EDT closed up +26.52 at 1,162.52. The VIX moved down -2.23 and closed at 39.02.

SPY volume decreased to 260.4 million shares.

The SPX did bounce, and gave a potential entry signal above the high of the inside day, on Monday as did all the broad indexes.

Many of the stocks, ORLY, AMGN, CERN, DLTR, COST, ALXN, BBBY, AMZN, ISRG, ROST, WFM, ATVI, FLIR, YHOO, MRVL, SNDK, MU, INTC, KLAC, BIIB, ORCL, EBAY, ADBE, CMCSA, CTSH and LLTC, in our bull flag setup list gave entry signals on Monday or Friday. Look at the remaining stocks for a potential entry signal on Tuesday: AAPL, CELG, GMCR, FAST, LINTA, MXIM, VRTX, SBUX, ADSK, MCHP, NVDA, PCLN

Seventeen NDX stocks including CA, CSCO, DELL, DTV, ERTS, GILD, GOOG, LRCX, MAT, QCOM, STX and SYMC moved above their 30 DMA making 57 NDX stocks above the 30 DMA. In our 30 DMA Watch List, five more stocks moved above the 30 DMA making 26 stocks above their 30 DMA.

Intermediate Posture based on the MF Green Line is down as the green line lagged today’s SPX move up and moved down to 40. The Green Line is in the process of making a higher low.

Technical indicators strengthened again on Monday including more stocks moving above their 30 DMA.


NDX hammer, above 30 DMA +1.24%
SPX large white candle, below 30 DMA +2.33%
INDU large white candle, below 30 DMA +2.53%
COMPQ hammer, close above 30 DMA +1.35%
RUT white candle, below 30 DMA +2.02%

Breadth strengthened as advancers led decliners 2.73 to 1 on the NYSE and weakened slightly 1.77 to 1 on the NASDAQ …

Exchange     NYSE      NASDAQ
Advancers    2,217        1,669
Decliners        811            939

Index     Change      Close      Direction      Confirmation
VIX          -2.23           41.25         Down            Yes – SPX
SOX         -0.45         359.50         Down            No – COMPQ

Leading stocks > +2% on Monday FAS, ENTR, STI, RVBD, PCX, C, ZION, HAL, GES, SWN, ANF, HLF, CSTR, WDC, ANR, FWLT, UAL, X, BAC, CF, LNKD, FCX, DOW, GS, CAT, FFIV, CDE, CLF, ESI, AKS, ARUN, ATI, WLT, SLB, DLR, TPX, POT, TBT, IBM, VMW, CROX, CMG, URE, IL, SWK, NDAQ, UCO, A, F, KKD, HUM

Losing stocks < -2.0% included FAZ, NTES, SINA, MCP, TSL, ZAGG

All nine sectors moved higher on Monday. Financials XLF +4.45%, Energy XLE +3.65% and Materials XLB +3.21% and were the strongest sectors.

Interest rates TNX closed up +0.96 at 19.04, bond ETF TLT moved down -1.94 and Financials XLF closed up 52 cents. The Euro moved up 37 pips to close at 1.3535 at 5 pm on Monday.

SPX
Resistance: 1,160, 1,177, 1,200
Support: 1,146, 1,134, 1,117

The short term 3 day trend is neutral.
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.

NDX 100 stocks stronger than the NDX include KLAC, WFM, EXPE, CTXS, STX, SIAL, FFIV, SRCL, GRMN and LRCX.

Stocks weaker than the NDX include VRTX, SIRI, AMAT, ALTR, WYNN, NIHD, MCHP, MU, BRCM and BIDU.

Stocks to Watch on Tuesday
Holding Above 30 DMA = 21
TLT, GMCR, V, DECK, ICE, SNDK, CMG, COH, CRUS, HUM, NDAQ, UAL, IBM, FAZ, ARUN, CROX, INFA, NKE, NVDA, SMH, TIF
Moving Above 30 DMA = 5
ANF, ENTR, HLF, TPX, VMW
Moving Below 30 DMA = 1
SWKS
Staying Below 30 DMA
CHL, CRM, DHR, JDSU, LVS, NGLS, SLW, SWN, A, CIEN, CREE, CSTR, DE, FFIV, RCL, STI, URE, ATI, CF, DOW, GES, IL, KKD, LNKD, MOS, RVBD, SINA, UNP, WDC, CDE, CLF, DLR, F, FAS, MCP, POT, UCO, WLT, ZION, AKS, CAT, FWLT, PCX, JNPR, NTES, SOHU, ZAGG, GLW, SWK, TSL, BAC, VECO, LDK, HAL, ESI, FCX, GS, SLB, ANR, C, TBT, X

Seven Week Intermediate Term Market Trend: Neutral
Short Term Market Trend: Up