SPX in Pennant, AA Kicks Off Earnings Season...

Seven of nine sectors moved higher on Monday, XLI, XLF and XLE were the strongest sectors.

Money Flow

Euro     +46 pips    1.2763

TNX      -0.01            19.60

TLT      -0.21          118.52

XLF      +0.07            13.46

SPX      +2.89       1,280.70

VIX        +0.44            21.07

RUT +0.51%

INDU +0.27%

SPX +0.23%

COMPQ +0.09%

NDX -0.23%

Money Flow did follow the Euro slightly higher as bonds fell, TNX was unchanged and XLF and SPX moved slightly higher.  The VIX did NOT confirm the SPX rise today.  The SPX continues in a pennant pattern.  Watch for potential breakout as earnings get underway.

Earnings season started today with AA releasing after the close.  AA was up before earnings and rose another 7 cents in after-hours trading on a forecast of 7% global demand increase in 2012.  AA reported a loss so the after earnings reaction is positive.

The SPX is acting as if institutional buyers want to take the index higher, in our view, in response to improving economic data in the U.S., but are waiting for confirmation of a positive earnings season.  Upcoming key earnings report include INTC, JPM, IBM and AAPL.

We placed a bullish divergence paper trade on IBM both as an at support and support bounce trade.  Also like RVBD and A for breakout setups.

SPY moved up 31 cents on volume of 99.2 million shares.

Breadth strengthened as advancers led decliners 1.75 to 1 on the NYSE and 1.33 to 1 on the NASDAQ.

Exchange        NYSE        NASDAQ

Advancers       1,908          1,433

Decliners         1,088          1,074

AAPL, AMZN, BIDU, GOOG, PCLN and QCOM moved lower. NFLX moved higher. 

Leading stocks > +2% on Monday JNPR, CSTR, TSL, SWKS, RVBD, FFIV, JDSU, CRUS, GRPN, CIEN, KKD, A, DECK, LDK

Losing stocks < -2.0% included PCX, NTES, WLT, CMG, ANR

NDX 100 stocks stronger than the NDX included NFLX, GMCR, AVGO, VRTX, FSLR, WCRX, FFIV, AMAT, NUAN and INFY.

Stocks weaker than the NDX include HANS, GOOG, COST, CTRP, AMZN, EXPE, ISRG, MSFT, EA and BMC.

Five NDX stocks AVGO, FFIV, FLEX, LRCX and RIMM closed above their 30 DMA and four CHRW, GOOG, SYMC and XRAY closed below making 75 NDX stocks above their 30 DMA. 

Stocks to Watch on Tuesday

Holding Above 30 DMA = 49

V, WDC, LDK, DLR, IL, URE, GES, CMG, DE, DOW, ENTR, FAS, HUM, SWK, UNP, F, NKE, UCO, ATI, CIEN, CRUS, SMH, SWKS, ZION, JDSU, NGLS, AKS, BAC, CF, CHL, DHR, STI, HAL, X, A, C, CAT, CLF, FCX, MOS, POT, TPX, COH, ESI, RVBD, NVDA, SNDK, GLW, KKD

Moving Above 30 DMA =7

CREE, FFIV, GS, JNPR, TBT, TIF, VECO

Moving Below 30 DMA = 0

Staying Below 30 DMA

ANR, CROX, RCL, SOHU, CSTR, LVS, PCX, ANF, IBM, NDAQ, TLT, TSL, ICE, GRPN, NTES, FAZ, CDE, SLB, TSLA, INFA, CRM, DECK, HLF, SLW, VMW, ARUN, SWN, WLT, MCP, SINA, ZAGG, LNKD

Fourteen Week Intermediate Term Market Trend: Up

Short Term Market Trend: Neutral