SPX Bounces Off Support in Channel, Forms Morning Star as Financials Move Higher...

All nine sectors moved higher on Monday.  XLB +3.76%, XLE +3.74% and XLI +3.37% were the strongest sectors.

The Euro was up 86 pips to 1.3318 at 5pm EDT on Monday.  TNX was down -0.09 to 19.58.  TLT was down 6 cents.  Financials XLF was up 35 cents.

The broad indexes moved higher with the RUT +4.76%, COMPQ +3.52%, NDX +3.41%, SPX +2.92% and INDU +2.59%.  The SPX moved up +33.88 to close at 1,192.55.

Friday’s non-confirmations with the lower Euro and interest rates and financial stocks up and bonds down, were signals suggesting that the current short-term down trend may be weakening.  The lower VIX compared with its Nov 9 level and the current SPX level compared above its early October low which was the last time the Euro was at its current level, were additional non-confirmations.  These combined with seven straight down days set the stage for a potential support bounce.

Record retail sales over the Thanksgiving weekend created the catalyst for futures to jump higher Sunday evening and Monday morning before the open.  The SPX opened higher and held its gains into the close.

Monday became a Short-term Entry signal for many traders with the break above the high of the low day or Friday’s Inverted Hammer.

With the four week up trend coming off the Oct 4 low, followed by a pullback to the 61.8% Fib level at the 50% channel support, an inverted hammer on Friday and a three candle Morning Star on Monday, a break above the diagonal resistance line and a rising MACD histogram created a classic uptrend, support bounce, diagonal resistance breakout, rising momentum setup and entry signal.

(click image to enlarge)

SPY traded 210.2 million shares.

The VIX moved down -2.34 to 32.13.

AAPL, AMZN, BIDU, GOOG, PCLN and QCOM moved higher on Monday. 

Stocks with Support Bounce Setups:  AKAM, FFIV, JOYG, CTXS, ADSK, ANR, DECK, RCL, TSLA, X, RAX and many more…

Breadth strengthened as advancers led decliners 5.24 to 1 on the NYSE and 4.71 to 1 on the NASDAQ.

Exchange         NYSE        NASDAQ

Advancers        2,600           2,130

Decliners             496              452       

Leading stocks > +2% on Monday MCP, LDK, TSL, TPX, FAS, X, ANR, KKD, CROX, DECK, RCL, AKS, JDSU, FFIV, VECO, COH, LVS, FCX, ATI, WDC, C, GES, CRM, GLW, TIF, PCX, CSTR, NVDA, CAT, CLF, ENTR, CIEN, VMW, NKE, ANF, JNPR, V, DOW, SNDK, SWK, ESI, SLW, CF, RVBD, WLT, SLB, UAL, URE, UNP, ARUN, SWN, HUM, A, CRUS, DE, DHR, POT, CREE, CDE, NTES, MOS, ICE, IL, UCO, INFA, HAL, SMH, NGLS, CMG, IBM, TSLA, NDAQ, F, ZION, GS

Losing stocks < -2.0% included GRPN, FAZ, SINA, LNKD

NDX 100 stocks stronger than the NDX included FSLR, NFLX, JOYG, FFIV, WYNN, AMZN, CTXS, ERTS, ADSK and BIDU.

Stocks weaker than the NDX include VMED, SHLD and ILMN.

Ten NDX stocks including AKAM, ALXN, BIIB, GRMN, NVDA, STX, URBN and VRSN closed above the 30 DMA, making 13 NDX stocks above the 30 DMA. 

Stocks to Watch on Tuesday

Holding Above 30 DMA = 6

TSLA, NGLS, UCO, TLT, FAZ, DLR

Moving Above 30 DMA = 10

ATI, CDE, DE, GLW, HUM, NKE, NVDA, UNP, V, WDC

Moving Below 30 DMA = 0

Staying Below 30 DMA

FFIV, CAT, A, AKS, CHL, CLF, IBM, INFA, NDAQ, NTES, RVBD, SWK, TIF, X, CIEN, HAL, JDSU, JNPR, LVS, SLB, SNDK, VMW, ANR, ARUN, CF, COH, CREE, CRM, CRUS, DHR, FCX, KKD, SLW, SMH, SWN, URE, WLT, CMG, DECK, DOW, HLF, ICE, MOS, PCX, TPX, C, GES, LDK, RCL, VECO, ENTR, FAS, GS, SOHU, STI, ZION, MCP, BAC, F, TSL, CSTR, IL, POT, SINA, SWKS, ZAGG, LNKD, ANF, ESI, TBT, UAL, CROX, GRPN

Eight Week Intermediate Term Market Trend: Up
Short Term Market Trend: Up