SPX Forms Large Black Candle Following Fed Announcement...

Wednesday became the day that broke below the low of the high day on Tuesday, as the SPX dropped -35.33 and closed at 1,166.76. The VIX moved up +4.46 and closed at 37.31. 

The battle between buyers and sellers at resistance was won by sellers after the Fed announced they would keep short-term rates low and would move to lower rates on mortgages and other loans.  Although the announcement was essentially in line with expectations selling accelerated as the SPY dropped 3 points during the last 50 minutes of trading and closed down -3.52 at 116.63.

SPY volume increased to of 315.2 million shares. 

The Euro fell and TNX dropped -0.72 to a new low at 18.75 after the Fed announcement.   XLF -0.62, -4.95% was the weakest sector.

Sixteen NDX stocks including AKAM, EXPE, FFIV, SHLD, and STX moved below their 30 DMA leaving 62 NDX stocks above the 30 DMA.  In our 30 DMA Watch List, twelve more stocks moved below the 30 DMA leaving 31 stocks above their 30 DMA.

Intermediate Posture based on the MF Green Line remained bullish today as the green line moved slightly higher.  Today was another example where posture lags real time momentum and short term traders give precedence to bearish entry signal.

Technical indicators weakened further today including more stocks moving below their 30 DMA.  The evidence did tip to the short-term negative.  Chart Signals hopes that traders did protect profits and were prepared to take short-term bearish trades when the SPY moved below the four-day support level of 118.70, as we alerted you last night.

(click image to enlarge)

NDX large black candle confirms dark cloud cover, above30 DMA -1.64%

SPX large black candle confirms shooting star, close below 30 DMA -2.94%

INDU large black candle confirms tombstone doji, close below 30 DMA -2.49%

COMPQ large black candle confirms dark cloud cover, above 30 DMA -2.01%

RUT large black candle follows bearish engulfing, below 30 DMA -1.69%

Breadth weakened and remained negative as decliners led advancers 5.86 to 1 on the NYSE and 4.80 to 1 on the NASDAQ …

Exchange       NYSE        NASDAQ

Advancers         442              444

Decliners        2,594            2,132          

Index         Change    Close    Direction    Confirmation

VIX               +4.46      37.32      Up              Yes – SPX

SOX              -7.39    365.39      Down         Yes – COMPQ

Leading stocks > +2% on Wednesday FAZ, TLT

Losing stocks < -2.0% included ANR, CLF, WLT, FAS, PCX, URE, LDK, A, FCX, HAL, BAC, STI, FWLT, IL, CF, SOHU, DOW, TBT, ZION, ATI, UNP, ENTR, X, SLB, ESI, SWK,CSTR, CIEN, C, CAT, KKD, AKS, GS, JDSU, UAL, GES, COH, F, NKE, DE, VECO, GLW, ARUN, MCP, TIF, RCL, MOS, DLR, POT, TSL, CROX, ANF, DHR, CREE, UCO, SINA, TPX, CHL, LNKD, HUM, WDC, NDAQ, HLF, DECK

All nine sectors moved lower on Wednesday.  Technology XLK -1.49%, Utilities XLU -1.84% and Consumer Staples XLY -2.06% were the strongest sectors.

Interest rates TNX closed down -0.72 at 18.75, bond ETF TLT moved up +3.80  and Financials XLF closed down 62 cents.  The Euro moved down 142 pips to close at 1.3564 at 5 pm on Wednesday.

SPX

Resistance: 1,177, 1,200, 1,225

Support: 1,160, 1,146, 1,134

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 -1.31 – bearish engulfing, above 30 DMA

AMZN -1.38 – shooting star, above 30 DMA                                  

BIDU -1.60 – black candle, below 30 DMA

GOOG -7.42 – black candle confirms shooting star, above 30 DMA

NFLX -1.53 – spinning top, below 30 DMA

PCLN -5.97 – second shooting star in trading range, above 30 DMA

QCOM -0.56 – large black candle, above 30 DMA

NDX 100 stocks stronger than the NDX include LINTA, ORCL, VRTX, NTAP, SIRI, ADSK, ADBE, DLTR, CTXS and GMCR.

Stocks weaker than the NDX include ILMN, FSLR, JOYGM VMED, NIHD, SHLD, RIMM, CTRP, PCAR and LIFE.

Stocks to Watch on Thursday

Holding Above 30 DMA = 30

TLT, CHL, SLW, GMCR, V, JDSU, LVS, DECK, ICE, NGLS, NVDA, SNDK, TIF, CMG, COH, CRUS, HUM, NDAQ, NKE, SMH, UAL, ANF, CRM, DHR, SWKS, TPX, CROX, HLF, SWN, IBM

Moving Above 30 DMA = 1

FAZ

Moving Below 30 DMA = 12

A, ARUN, CIEN, CREE, CSTR, DE, ENTR, FFIV, RCL, STI, URE, VMW

Staying Below 30 DMA

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, INFA

Six Week Intermediate Term Market Trend: Neutral

Short Term Market Trend: Down