Bullish Engulfing Pattern Engulfs the Market on Last Day of 2012...

Do you believe that market action, price action factors in (discounts) everything?

Why did the SPY drop only -3.24% in the seven trading days leading up to Monday and the deadline for the so-called “Fiscal Cliff”?

Why did the market rally with huge bullish engulfing patterns on the broad index ETFs and many stocks on Monday?

The media continued to use a scary metaphor “Fiscal Cliff” and yet the SPY was down just -3.24%, how can that be?

All nine sectors moved higher on Monday… XLE, XLB, and XLI were the strongest sectors.   XLP was the weakest sector.  Many bullish engulfing patterns appeared as SPY volume exploded to 243.7 million shares on Monday as buyers became aggressive. The VIX collapsed -4.70, 20.69% to 18.02.   

Breadth strengthened on Monday as advancers led decliners…6.05 to 1 on the NYSE and 4.18 to 1 on the NASDAQ…

Monday- strengthened, advancers led

Friday – weakened, decliners led

Thursday – strengthened, decliners led

Wednesday – weakened, decliners led

Tuesday - closed

If short-term trades were exited through target or stop, continue to look for re-entry on a valid signal.  Many entry signals occurred on Monday.

SPY up 2.38 at 142.41...volume 243.7 million shares…

VIX down -4.70 at 18.02…
TNX up 0.45 at 17.56…

TLT down -2.13 at 121.18…
XLF up 21 cents at 16.39…volume 32 million shares

AAPL up 22.58 at 532.17…volume 23.5 million shares …

FB up 71 cents at`26.62…on volume of 60.4 million shares…

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2012 Performance – the SPX had its best year since 2009

NDX    +16.82%

RUT    +14.63%

SPX    +13.45%

DJIA     +7.29%

Leading NDX Stocks

EXPE   +115.6%

STX      +93.51%

GILD     +78.88%

EBAY    +68.14%

AMZN   +44.93%

PCLN    +32.70%

AAPL    +32.57%

GOOG    +9.52%

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95 of 100 NDX stocks closed higher and one was unchanged on Monday…

Leading NDX 100 stocks included:  SHLD, AAPL, FOSL, NWSA, SYMC, LINTA, GOLD, FB, SPLS, WYNN

Lagging NDX stocks included:  CTRX, MXIM, FISV, HSIC, SIRI, ADP, VIAB, GRMN

Leading stocks> +2% on Monday included:  HLF, CLF, AKS, CRUS, LDK, URI, DECK, VECO, ANR, ATI, ANF, SINA, TPX, NFLX, TBT, X, FLSR, LVS, FCX, PHM, MCP, CDE, RAX, SSYS, TSL, JDSU, WDC, GMCR, CIEN, CMG, CRM, CREE, COH, DE, BAC, SWKS, STI, SWI

Lagging stocks < -2.0% included:  FAZ, UNG

Stocks to Watch on Wednesday…

Holding Above 30 DMA = 48
YHOO, SBUX, CSCO, NTAP, VMED, SBAC, EXPD, LLTC, PCAR, XLNX, TXN, ADI, SIAL, FISV, ADSK, DELL, FFIV, ORCL, COST, MNST, ADBE, GOOG, GRMN, NWSA, DISCA, AMAT, CTSH, FOSL, KLAC, VIAB, NUAN, STX, LBTYA, WDC, AKAM, ALTR, CHKP, FAST, MCHP, SNDK, EQIX, LMCA, CTXS, CHRW, INTC, SIRI, BIDU, VRSK

Moving Above 30 DMA =22

ADP, AMZN, BRCM, CMCSA, DLTR, DTV, EBAY, ESRX, EXPE, FB, LINTA, MU, MXIM, MYL, NVDA, PRGO, SRCL, SYMC, VRTX, WFM, WYNN, XRAY

Moving Below 30 DMA = 0

Staying Below 30 DMA

INTU, CA, CELG, HSIC, ALXN, BIIB, BMC, CERN, LIFE, MAT, MSFT, REGN, MDLZ, AMGN, ORLY, PAYX, QCOM, SPLS, CTRX, BBBY, GILD, ISRG, ATVI, VOD, AVGO, PCLN, AAPL, SHLD, GOLD, ROST

Fifteen Week Intermediate Term Market Trend: Neutral

Short Term Market Trend: Up

With Budget Deal On The Line...Stock Futures Rise In Pre-Market...Markets Will Close At Regular Time 2:00 EST...

BMO – ES + 12.00 and NQ +15.25…futures point to a higher open  in pre- market…

SPY is…down .20 cents…

XLF is …down .02 cents…

Euro is unchanged…

TLT is …down 20 cents…

Follow your rules for entry and exit…adjust stops to protect profits at this time according to your rules...

Quoting Up: AAPL, GOOG, BIDU, FB, GOLD, INTC, PRGO, NUAN, SINA, HLF, TBT, CLF, RIMM, FAZ, FCX, BAC

Quoting Down:  AMZN, ROST, SYMC, ISRG, NTAP, SNDK, WFM, WDC, V, TPX, CRM,

Inverted Hammers Appear as SPY, IWM, QQQ and Stocks Retreat to Support...

All nine sectors moved lower on Friday… XLF, XLY, and XLV were the strongest sectors.   XLE was the weakest sector for the second day in a row.

Breadth weakened on Friday as decliners led advancers…2.16 to 1 on the NYSE and 1.96 to 1 on the NASDAQ…

Friday – weakened, decliners led

Thursday – strengthened, decliners led

Wednesday – weakened, decliners led

Tuesday - closed

Friday – weakened, decliners led

If short-term trades were exited through target or stop, continue to look for re-entry on a valid bullish or bearish signal.

SPY down -1.53 at 140.03...volume 138.6 million shares…

VIX up 3.25 at 22.72…
TNX down -0.04 at 17.11…

TLT up 70 cents at 123.31…
XLF down 13 cents at 16.18…volume 32 million shares

AAPL down -5.47 at 509.59…volume 12.6 million shares …

FB down 14 cents at`25.91…on volume of 56.5 million shares…

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Technical Commentary:

The SPY closed down 1.53 at 140.03 and formed an inverted hammer like candle near the low of Thursday’s long tailed hammer, closing below its 30 DMA.   IWM and QQQ did form an inverted hammer as did FAS, XLI, XLK and XLY. 

The VIX had its biggest jump in weeks that many attribute to fears over the so-call “Fiscal Cliff.”  This is a cliff which the media acknowledges can be avoided retroactively after the first of the year.  How many cliffs can you drive a car over and then retroactively not go over the cliff?  Chart Signals concludes that “cliff” is an inaccurate metaphor chosen because the media respects the public and does not want to cause undo fear or maybe they had other motivations.

The weight of the evidence continues to suggest that the current 6 week uptrend is likely to continue.  Friday’s close is just below its 38.2% Fib retracement off its Nov 16 low.  The four week trend is neutral.

The Euro closed down 19 pips at 1.3216 on Friday. TNX was slightly lower, TLT, bonds rose 70 cents and XLF was down 13 cents at 16.18.

Disk storage stocks WDC and STX were down slightly on Friday and coal stocks ANR, ACI, BTU and WLT also moved lower.

The Market Forecast Green Line closed below the upper reversal zone and is pointed down.

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Chart Targets:

SPY = 146.82 short-term resistance flagpole target
ES = 1,449 161% Fib extension

1,459 = 200% measuring

EUR/USD = 1.3281 161% Fib extension

Short-term support at
1.3126 = Euro

139.92, 139.15 = SPY

85.18 = SPXL
1,1390.50, 1,376 = ES
2,585, 2,577 = NQ

Setups:

Bull Flag: IWM, FAS, WFC, NFLX, ORCL, FB, GOOG, VMW, MCP, MNST, ZION, STI, SBUX, TRIP, ADI, ALTR, XLNX, ADBE, ADSK, CHKP, CSCO, CTSH, CTXS, FOSL, MU, NVDA, SWK, JNPR, GLW, V, URE, EXPD, SNDK, LLTC, A, CRM, CREE, DHR, LVS, NKE, TPX

At Support: NTAP, IBM, CELG, DELL, SMH, BIIB, INTC, INTU, GRMN, LCC, SPY, DIA, QQQ, ADP, MSFT, AMZN, AAPL, VIAB, TSLA, EBAY, RCL, SLB, TIF, VECO

Moves:

Bull Flag Bounce:  SSYS

Bounce Continuation:  DLR, FAST, RIMM, F,

Pause:  DECK, EXPE, BIDU, AKS, BAC, WDC, STX, AMAT, SIAL, C, ATI, PCAR, LNKD, ALXN, YHOO, GMCR, EXPD, URI, COST, DISCA

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97 of 100 NDX stocks closed lower and one was unchanged on Friday…

Leading NDX 100 stocks included:  SHLD, ROST, VRSK, LINTA, CTRX, PCLN

Lagging NDX stocks included:  GRMN, VRTX, NTAP, INTU, FOSL, ISRG, MYL, EXPE, AKAM, MSFT

Leading stocks> +2% on Friday included:  LDK, HLF, SSYS, SOHU, SINA, FAZ

Lagging stocks < -2.0% included: VECO, X, GMCR, FAS, JNPR

Stocks to Watch on Monday…

Holding Above 30 DMA = 48
YHOO, SBUX, CSCO, NTAP, VMED, SBAC, EXPD, LLTC, PCAR, XLNX, TXN, ADI, SIAL, FISV, ADSK, DELL, FFIV, ORCL, COST, MNST, ADBE, GOOG, GRMN, NWSA, DISCA, AMAT, CTSH, FOSL, KLAC, VIAB, NUAN, STX, LBTYA, WDC, AKAM, ALTR, CHKP, FAST, MCHP, SNDK, EQIX, LMCA, CTXS, CHRW, INTC, SIRI, BIDU, VRSK

Moving Above 30 DMA =0

Moving Below 30 DMA = 14

ADP, AMZN, BRCM, CMCSA, ESRX, EXPE, INTU, MU, MXIM, MYL, NVDA, PRGO, VRTX, WYNN

Staying Below 30 DMA

CA, CELG, FB, HSIC, WFM, XRAY, ALXN, BIIB, BMC, CERN, DTV, EBAY, LIFE, LINTA, MAT, MSFT, REGN, DLTR, SYMC, MDLZ, AMGN, ORLY, PAYX, QCOM, SPLS, CTRX, BBBY, GILD, ISRG, SRCL, ATVI, VOD, AVGO, PCLN, AAPL, SHLD, GOLD, ROST

Fifteen Week Intermediate Term Market Trend: Neutral

Short Term Market Trend: Down

Pre-Market Open Sees Stock Futures Fall...

BMO – ES - 8.50 and NQ - 14.00…futures point to a lower open  in pre- market…

SPY is…up 13 cents…

XLF is …down 15 cents…

Euro is down 32 pips…

TLT is …up 53 cents…

Follow your rules for entry and exit…adjust stops to protect profits at this time according to your rules...

Quoting Up: SBUX, FAZ, HLF, DECK

Quoting Down:  AAPL, GOOG, AMZN, ISRG, WFM, FFIV, MXIM, BIDU, GOLD, FB, EBAY, FAS, GS, NFLX, SLB, ATI, CLF

Hammer Time on IWM, SPY, DIA, QQQ, FAS, Sector Charts and More...

Two of nine sectors moved higher on Thursday… XLP, XLY, and XLK were the strongest sectors.   XLE was the weakest sector.

Breadth strengthened on Thursday as decliners led advancers…1.20 to 1 on the NYSE and 1.30 to 1 on the NASDAQ…

Thursday – strengthened, decliners led

Wednesday – weakened, decliners led

Tuesday - closed

Friday – weakened, decliners led

Thursday – strengthened, advancers led

If short-term trades were exited through target or stop, begin to look for re-entry on a valid signal.

SPY down 19 cents at 141.56...volume 167.9 million shares…

VIX down -.01 at 19.47…
TNX down -0.43 at 17.15…

TLT up 41 cents at 122.61…
XLF down 6 cents at 16.31…volume 44.4 million shares

AAPL up 2.06 at 515.06…volume 16.2 million shares …

FB down 46 cents at`26.05…on volume of 43.5 million shares…

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Technical Commentary:

The SPY closed down 19 cents at 141.56 forming a long tailed hammer as did IWM, DIA, QQQ, FAS, XLB, XLE, XLI, XLK, XLP, XLU, XLV, XLY and many individual stocks.  The VIX closed slightly lower and did not confirm the SPY move down.

The weight of the evidence continues to suggest that the current 5 week uptrend is likely to continue.

The Euro closed up 12 pips at 1.3235 on Thursday. TNX was lower, TLT, bonds rose 41 cents and XLF was down -6 cents at 16.31.

Disk storage stocks WDC and STX paused on Thursday as did coal stocks ANR, ACI, BTU and WLT.

The Market Forecast Green Line is in the upper reversal zone.

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Chart Targets:

SPY = 146.82 short-term resistance flagpole target
ES = 1,449 161% Fib extension

1,459 = 200% measuring

EUR/USD = 1.3281 161% Fib extension

Short-term support at
1.3126 = Euro

140.88 = SPY

85.18 = SPXL
1,419, 1,405 = ES
2,609 = NQ

Setups:

Bull Flag: IWM, FAS, WFC, NFLX, NTAP, ORCL, FB, GOOG, VMW, MCP, MNST, ZION, STI, IBM, SBUX, CELG, DELL, TRIP, SMH, ADI, ALTR, XLNX, ADBE, ADSK, BIIB, CHKP, CSCO, CTSH, CTXS, FOSL, INTC, INTU, MU, NVDA, SWK, JNPR, GLW, V, URE, EXPD, SNDK, LLTC, A, CRM, CREE, DHR, LVS, NKE, SSYS, TPX, LCC,

Hammer at Support: SPY, DIA, QQQ, ADP, MSFT, AMZN, AAPL, VIAB, TSLA, EBAY, RCL, SLB, TIF

Moves:

Bull Flag Bounce:  DECK, EXPE

Bounce Continuation:  DLR, FAST, GRMN

Pause:  RIMM, BIDU, AKS, F, BAC, WDC, STX, AMAT, SIAL, C, ATI, PCAR, LNKD, ALXN, YHOO, GMCR, EXPD, URI, COST, VECO, PCAR, DISCA

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32 of 100 NDX stocks closed higher and one was unchanged on Thursday…

Leading NDX 100 stocks included:  EXPE, AVGO, FOSL, GRMN, ISRG, ROST, PCLN, EQIX, LBTYA, VMED, SRCL, FAST

Lagging NDX stocks included:  BIDU, FB, CTRX, CSCO, BMC, ORCL, MXIM, DISCA, DELL, INTU, AMGN, CMCSA, CA, SNDK, COST

Leading stocks> +2% on Thursday included:  DECK, UCO, HLF, CMG

Lagging stocks < -2.0% included: AKS, MCP, TSL, TPX, SSYS, X, ANR, UAL CIEN

Stocks to Watch on Friday…

Holding Above 30 DMA = 60
YHOO, MYL, SBUX, CSCO, NTAP, VMED, SBAC, EXPD, LLTC, MXIM, PCAR, XLNX, TXN, ADI, SIAL, AMZN, FISV, ADSK, DELL, FFIV, MU, ORCL, BRCM, COST, MNST, ADBE, GOOG, GRMN, NWSA, WYNN, DISCA, AMAT, CTSH, ADP, FOSL, INTU, KLAC, VIAB, NUAN, STX, LBTYA, WDC, AKAM, ALTR, CHKP, FAST, MCHP, SNDK, EQIX, LMCA, CTXS, CHRW, NVDA, ESRX, INTC, SIRI, BIDU, CMCSA, VRTX, VRSK

Moving Above 30 DMA =2

EXPE, PRGO

Moving Below 30 DMA = 6

CA, CELG, HSIC, WFM, XRAY, FB

Staying Below 30 DMA

ALXN, BIIB, BMC, CERN, DTV, EBAY, LIFE, LINTA, MAT, MSFT, REGN, DLTR, SYMC, MDLZ, AMGN, ORLY, PAYX, QCOM, SPLS, CTRX, BBBY, GILD, ISRG, SRCL, ATVI, VOD, AVGO, PCLN, AAPL, SHLD, GOLD, ROST

Fifteen Week Intermediate Term Market Trend: Neutral

Short Term Market Trend: Neutral

Stock Futures Points To A Slightly Higher Open In Pre-Market...

BMO – ES + 2.75 and NQ + 6.50…futures point to a higher open  in pre- market…

SPY is…up 13 cents…

XLF is …down .07 cents…

Euro is up 53 pips…

TLT is …down .49 cents…

Follow your rules for entry and exit…adjust stops to protect profits at this time according to your rules...

Quoting Up: AAPL, GOOG, BIDU, PRGO, VOD, EBAY, FB, MSFT, LNKD, CLF, HLF, TBT, GS, X

Quoting Down:  AMZN, GOLD, NFLX, FAZ

Euro, Bonds Higher...Stocks Lower on Light Volume...

One of nine sectors moved higher on Wednesday… XLB, XLF, and XLI were the strongest sectors.   XLY was the weakest sector.

Breadth weakened on Wednesday as decliners led advancers…1.85 to 1 on the NYSE and 1.76 to 1 on the NASDAQ…

Wednesday – weakened, decliners led

Tuesday - closed

Friday – weakened, decliners led

Thursday – strengthened, advancers led

Wednesday – weakened, decliners led

Tuesday – strengthened, advancers led

 If short-term trades were exited through target or stop, begin to look for re-entry on a valid signal.

SPY down 60 cents at 141.75...volume 106.9 million shares…

VIX up 1.64 at 19.48…
TNX down -0.16 at 17.58…

TLT up 44 cents at 122.20…
XLF unchanged at 16.36…volume 29.7 million shares

AAPL down -7.17 at 513.00…volume 10.8 million shares …

FB down 42 cents at`26.51…on volume of 33.1 million shares…

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Technical Commentary:

The SPY closed down 60 cents at 141.75 on light holiday volume continuing to form a new potential bull flag.  The VIX closed higher and did confirm the SPY move down.

The weight of the evidence continues to suggest that the current 5 week uptrend is likely to continue.

The Euro closed up 41 pips at 1.3223 on Wednesday. TNX was lower, TLT, bonds rose 44 cents and XLF unchanged at 16.37.

Disk storage stocks WDC was up 28 cents and STX up 8 cents.  Coal stocks ANR, ACI, BTU and WLT bounced higher on Wednesday in bull flag patterns.

The Market Forecast Green Line is in the upper reversal zone.

____________________

Chart Targets:

SPY = 146.82 short-term resistance flagpole target
ES = 1,449 161% Fib extension

1,459 = 200% measuring

EUR/USD = 1.3281 161% Fib extension

Short-term support at
1.3126 = Euro

140.88 = SPY

85.18 = SPXL
1,419, 1,405 = ES
2,609 = NQ

Setups:

Bull Flag: X, NFLX, FB, EXPE, GOOG, VMW, MCP, MNST, NTAP, ORCL, FAS, ZION, STI, IBM, SBUX, CELG, DELL, DECK, TRIP, SMH, ADI, SPY, DIA, IWM, XRAY, ALTR, XLNX, ADBE, ADP, ADSK, BIIB, BMC, CHKP, CMCSA, CSCO, CTSH, CTXS, FOSL, INTC, INTU, MSFT, MU, NVDA, AMZN, SWK, VIAB

Moves:

Bull Flag Bounce:  RIMM, BIDU, AKS

Bounce Continuation:  F, BAC, WDC, WDC, STX, AMAT, SIAL, C, ATI, PCAR

Pause:  LNKD, ALXN, YHOO, URE, V, GMCR, DLR, EXPD, TSLA, URI, FAST, SNDK, LLTC, COST, VECO, GRMN, EBAY, PCAR, DISCA

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17 of 100 NDX stocks closed higher and two were unchanged on Wednesday…

Leading NDX 100 stocks included:  BIDU, FFIV, WDC, CSCO, SIAL, DELL, CTXS, STX, PCAR, AMAT

Lagging NDX stocks included:  AMZN, FOSL, EXPE, ROST, SHLD, PCLN, LIFE, ISRG, LINTA, MYL

Leading stocks> +2% on Wednesday included:  RIMM, ANR, UCO, HLF, TSL, AKS, GRPN, LDK, F, SOHU, BAC

Lagging stocks < -2.0% included: COH, SSYS, ANF, TIF, NKE, SWKS, CSTR, TSLA

Stocks to Watch on Thursday…

Holding Above 30 DMA = 66
YHOO, MYL, XRAY, SBUX, HSIC, FB, CSCO, NTAP, SBAC, VMED,  ADI, EXPD, LLTC, MXIM, PCAR, TXN, XLNX, CELG, SIAL, AMZN, FISV, ADSK, DELL, FFIV, MU, ORCL, BRCM, COST, MNST, ADBE, DISCA, GOOG, GRMN, NWSA, WYNN, AMAT, CTSH, ADP, FOSL, INTU, KLAC, NUAN, STX, WDC, AKAM, ALTR, CHKP, EQIX, FAST, LMCA, MCHP, SNDK, CTXS, CHRW, NVDA, ESRX, INTC, SIRI, BIDU, CMCSA, VRSK, VRTX, CA, WFM

Moving Above 30 DMA = 0

Moving Below 30 DMA = 13

ALXN, BIIB, BMC, CERN, DTV, EBAY, EXPE, LIFE, LINTA, MAT, MSFT, PRGO, REGN

Staying Below 30 DMA

DLTR, MDLZ, SYMC, AMGN, CTRX, ORLY, PAYX, QCOM, SPLS, BBBY, GILD, ISRG, SRCL, ATVI, VOD, AVGO, PCLN, AAPL, SHLD, GOLD, ROST

Fifteen Week Intermediate Term Market Trend: Neutral

Short Term Market Trend: Neutral