SPY, XLF and Many Stocks Form Small Candle in Bull Flag Pattern Setup...

All nine sectors moved higher on Friday.  XLK, XLV, and XLF were the strongest sectors.

Breadth strengthened as advancers led decliners 4.32 to 1 on the NYSE and 3.82 to 1 on the NASDAQ.

Exchange      NYSE    NASDAQ

Advancers     2,076       1,772

Decliners          939          740

SPY moved up $1.02 on 130 million shares closing above its 30 DMA for the seventh straight day.  The SPX gained +9.51 at 1,335.02. 

The Market Forecast green line is pointed up.

AAPL up 4.43 at 582.10 on 10.1 million shares...

FB up $1.21 at 33.05 on volume of 74.9 million shares...Recent new high on increasing volume…pay attention here!

GRPN -0.09, -0.94%…

Friday’s bounce on a 130 million SPY shares formed the small candle that Chart Signals was looking for and leads to a tradable bull flag formation with potentially better entry and risk parameters than Thursday’s large candle.  Many individual stocks are in the second to fourth day of bull flag patterns.  Watch for the higher low and bounce for potential entry.

Daily Bull Flags: ROST, CRUS, SPY, DIA, ICE, FAS, ALXN, IWM, AAPL, SXCI, ULTA, ORLY, ALGN, MLNX, PCLN, COST, GOLD, DLTR, JDSU, AVGO, CSTR, QQQ, VRSN, MNST, EXPE, C, PNRA, URE, MCHP, NFLX, INFA,

C Pattern Continuation: V, SAVE, FAS, TSLA, AKAM, MSFT, SBUX, CMG, CMG, ISRG, CTXS, AVGO, AAPL, CSTR, INTU, SIAL, FISV, SHLD

C Pattern Pullback: DKS, SWKS, SRCL

C Pattern Reversal:

C Pattern Entry: SWI,

C Pattern Setup: CRM, DXPE, ORLY, HIBB, ODFL, VMI, PIR, A, DHR, FMC

Support Bounce: QCOM VMW, ZAGG, GOOG

At Support:  TPX, MRVL, EXPD, F, ALTR, LVS, RVBD,

 

Breakout Setup: MCP, VMED, VECO, VECO

Bounce: MCP, TFM, BIDU, CROX

Technical Commentary:

Some observed that the SPY and other indexes closed below their 50 DMA on Thursday and that was bearish.  Their reasoning is over simplistic and illustrates no technical context suggesting in their view that movement around a 50 DMA is static and that there is only meaning regardless of market context. 

All technical indicators should be interpreted in market context.  In this case price only crossed above the 50 DMA two days earlier and a move back below is more neutral that bearish, since price had already been below its 50 DMA for 30 trading days.  Also the SPY has been in an intermediate term sideways trading range for weeks and movement above and below a DMA is indicating nothing about trend since it was already sideways and now so is the lagging DMA.

Friday Highlights:

SPY closes up $1.02

The Euro moved up 29 pips, closed at 1.2568

TNX +0.54

VIX fell -1.97 at 18.11

XLF closed +13 cents at 14.33

94 of 100 NDX stocks closed higher on Friday…

Leading NDX 100stocks included FSLR, LIFE, VRTX, FFIV, CELG, NUAN, NFLX, ATVI, STX, GMCR

Lagging NDX stocks included RIMM, MNST, GRMN, CHRW, PNRA, SRCL

Leading stocks > +2% on Friday included AKS, TSLA, V, LNKD, UCO, VMW, FB, ZAGG, CREE, INFA, CRUS, CRM, SWI, FAS, CROX, TBT, MCP

Losing stocks < -2.0% included PCX, LDK, FAZ, NTES, FCX

Stocks to Watch on Monday

Holding Above 30 DMA = 28

TLT, CRUS, SWKS, CIEN, ICE, GES, CSTR, HUM, BAC, DLR, C, HLF, URE, FAS, LNKD, MOS, RCL, SMH, TSL, TSLA, V, CMG, JDSU, SINA, STI, DE, UAL, MCP

Moving Above 30 DMA = 3

CHL, INFA, SWI

Moving Below 30 DMA = 15

NTES

Staying Below 30 DMA

A, CDE, CLF, DHR, F, FCX, GLW, GS, IBM, RVBD, SLB, VECO, GRPN, FAZ, DECK, NKE, ZAGG, CRM, LDK, CREE, WDC, ANF, ATI, VMW, ESI, TIF, UCO, AKS, ANR, JNPR, X, SOHU, CROX, LVS, PCX,  SWK, TPX, ZION, TBT, COH

Five Week Intermediate Term Market Trend: Neutral

Short Term Market Trend: Neutral