Thursday, January 3, 2013

SPY Pauses after Two Day Gains...


Three sectors moved higher on Thursday… XLY, XLV, and XLI were the strongest sectors.   XLB was the weakest sector. 

Breadth weakened on Thursday as advancers led decliners…1.28 to 1 on the NYSE and decliners led advancers 1.08 to 1 on the NASDAQ…

Thursday – weakened, advancers led
Wednesday – strengthened, advancers led
Monday- strengthened, advancers led
Friday – weakened, decliners led
Thursday – strengthened, decliners led

After two days of strong gains many stocks paused on Thursday as some traders apparently chose to lock in gains.  Potentially bearish candles appeared on some charts.  It’s time to manage stop adjustments according to your rules.


SPY down 33 cents at 145.73...volume 144.7 million shares…
VIX down .12 at 14.56
TNX up .60 at 18.99…
TLT down 1.62 at 117.94…
XLF
 down .02 cents at 16.85…volume 47.9 million shares

AAPL down 6.93 at 542.10…volume 12.1 million shares …
FB down 23 cents at`27.77…on volume of 63.1 million shares…

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Technical Commentary:

The SPY traded in a tight range forming a spinning top and potential bearish harami candle pattern at horizontal resistance formed in September.  Many stocks are at horizontal resistance in a breakout setup or may have formed the first day of a bull flag pullback.   

Once again the weight of the evidence correctly indicates trend direction.

The Euro closed down 132 pips at 1.3050 on Thursday.

Disk storage stocks WDC -0.97% and STX -1.78% paused and formed potential bearish candle patterns.  Coal stocks ANR +5.73%, ACI +3.82%, BTU +3.10%, CNX +2.97%, JRCC +5.28% and WLT made strong gains on Thursday.


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

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Setups:
Breakout:  ADBE, ADSK, BRCM, FB, FOSL, GOOG, MSFT, NTAP, QCOM, SNDK, ANR, CIEN, CREE, CRM, GLW, IBM, JNPR, NFLX, RCL, ZION

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39 of 100 NDX stocks closed higher on Thursday…


Leading NDX 100 stocks included:  ROST, MU, VRTX, DELL, SPLS, SIRI, PCLN, CTRX, SHLD, ISRG, PRGO, VRSK, WYNN

Lagging NDX stocks included:  CHKP, FFIV, MNST, CTXS, GOLD, AKAM, EBAY, ALTR, STX, NUAN, ESRX, ADI, ALXN

Leading stocks> +2% on Thursday included:  LDK, TSL, HLF, ANR, ESI, NFLX, GRPN, UAL, TPX, TBT, TIF, YELP, GES, DECK, LVS

Lagging stocks < -2.0% included:  CDE, HUM, VMW, AKS, RVBD, STI, RIMM


Stocks to Watch on Friday…
Holding Above 30 DMA = 85
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, ADP, AMZN, BRCM, CMCSA, DTV, EBAY, ESRX, EXPE, LINTA, MU, MXIM, MYL, NVDA, SRCL, SYMC, VRTX, WFM, WYNN, XRAY, PRGO, FB, ALXN, AMGN, BMC, CA, CELG, CERN, GILD, HSIC, INTU, LIFE, MSFT, PCLN, QCOM, MDLZ, CTRX, REGN

Moving Above 30 DMA =2
ROST, SPLS

Moving Below 30 DMA = 4
AAPL, BIIB, MAT, VOD

Staying Below 30 DMA
DLTR, ORLY, PAYX, BBBY, ISRG, ATVI, AVGO, SHLD, GOLD

Fifteen Week Intermediate Term Market Trend: Neutral
Short Term Market Trend: Up

7 comments:

Rob S said...

Dave, Many thanks for sharing your analysis and set-ups.

Trade Simple Charts....

Mike said...

Dave

I am confused about how you are using Breadth vs advancers/decliners. I assume if Breadth is positive then advancers lead decliners and vice versa. Yet in the thursday post you said:

Thursday – weakened, advancers led
Wednesday – strengthened, advancers led
Monday- strengthened, advancers led
Friday – weakened, decliners led
Thursday – strengthened, decliners led

For the 1st Thursday it is indicated Breath Weakened, advancers led. For the 2nd, Breadth strengthened decliners led.
Can you clarify please?

Thanks for all your help, encouragement and dedication

Mike

Gary said...

Mike,
Don't know if Dave will answer but if you look to the previous day's ADVN/DCLN that's where the correlation is. So last Weds DCLN lead ADVN 1.58:1 and Thursday DCLN lead ADVN 1.20:1 there was a .38 decrease in DCLN therefore breadth strengthened. Same with this week: Weds ADVN/DCLN 10:1 and Thursday ADVN/DCLn 1.28:1. so a 8.72 decrease in ADVN. Although they declined from the previous day, they still led. Hope this helps if Dave doesn't clarify.

Gary said...

Mike,

I needed to correct the symbols for NYSE advancers: $ADVN and decliners $DECN.

Gary said...

Dave,

Just in case you peek in, here's the pattern on RGLD I was looking at. I know in past classes you had negated alot of H/S patterns students presented to you. http://screencast.com/t/GLeldxXIV.
Thank you for the comments last night.

Gary

Gary said...

Link correction:

http://screencast.com/t/Uwl3DYRFWSZK

Mike said...

Thanks Gary that cleared things up nicely. Much appreciated!

Mike