Wednesday, October 30, 2013

Fed Continues Assest Purchases...Traders Take Profits...DWA, GILD Higher...FB Mixed After Better Than Expected Earnings...EXPE Gaps Higher...

All nine sectors moved lower on Wednesday…however…XLK, XLF and XLI were the strongest sectors…XLP was the weakest sector. 
 
Breadth weakened… as decliners led advancers…2.43 to 1 on the NYSE and decliners led advancers 2.76 to 1 on the NASDAQ.
 
Wednesday – weakened, decliners led
Tuesday – strengthened, advancers led
Monday – weakened, decliners led
Friday – weakened, advancers led
Thursday – strengthened, advancers led
 
 
SPY down .88 at 176.29…volume 140 million shares
VIX up .24 at 13.65…
TNX up .20 at 25.27…
TLT down .65 at 107.41...
XLF down .08 at 20.79 volume 35.4 million shares
 
AAPL up 8.22 at 524.90…volume 12.6 million shares
FB down .39 at 49.01…volume 127 million shares
 
Technical Commentary: 
QQQ – 0.10%, DIA – 0.40%, SPY – 0.50%, IWM – 1.37%.
 
The SPY after making a new intra-day high (within 47 cents of its 162.8% chart target) in the first ten minutes of trading sold off forming a bearish engulfing pattern on Wednesday.  The SPY did rally from daily lows during the last 90 minutes of trading.  Traders with stops under Tuesday’s low may have been taken out with big profits today.
 
QQQ and IWM also formed bearish engulfing patterns.  QQQ also made a new intra-day high before closing lower.  IWM did break and close below Tuesday’s low.  QQQ has been trading in the area of its 200% price target over the past four days and IWM has been trading in the area of its 161.8% target for 8 days.
 
Chart Signals has been alerting readers to, “Move profit protective stops according to your rules,” since Monday.
 
DIA sold off at horizontal resistance forming a dark cloud candle pattern.
 
Notwithstanding Wednesday’s pullback the uptrend continues.  Today’s price action could be a one day pause or turn into a multi-day flag pullback to a higher low.  Continue to move profit protective stops according to your rules.
 
CMCSA lower, GRMN higher reported earnings before the open.  After the close EXPE +9.40, +18.82% and SBUX -2.03, -2.51% reported earnings.
 
FB reported better than expected earnings after the close and traded more than $6 higher but then reversed after forward looking comments and finished after-hours trading 2 cents lower.
 
Chart Targets:
QQQ = 83.17
IWM = 110.96, 112.83
SPY = 177.85, 180.99
 
Remember it is big money that creates and sustains the trend.  As Granville once wrote, “technical analysis is the art of tracking the market, following the footsteps of the ‘smart money’ crowd.  The ‘smart money crowd’ is no mysterious ‘THEY.’  It is simply a collection of people who are reading the market correctly, seeing through the maze, unconfused by this hall of mirrors.”
 
Short-term market posture is SPY up.
Support Levels
ES = 1,726
SPY = 172.76
QQQ = 81.87, 79.76, 78.40
IWM = 107.83
 
Earnings to Watch
Earnings releases continue with a large list of major companies reporting this week including:
Monday – AAPL, STX, BIIB, HLF
Tuesday – X, LNKD, YELP, BIDU, FISV, GILD, VRTX, XRAY
Wednesday – FB, GRMN, CMCSA, EXPE, KRFT, MCHP, SBUX
Thursday – CTRX, DISCA, MYL
 
Q3 Earnings Reactions
Positive Reactions – GILD, DWA, LVLT, EA, SEE, SPW, TFX, X, XRAY, XYL, JLL, PBI, ALR, HUN, ACT, DECK, AMZN, MSFT, FLS, AVY, ALXN, WOOF, COG, BA, CLGX, ESI, EQIX, WLL, TSCO, RRD, PHM, RCL, ALXN, APOL, BCR, NDAQ, NSC, WHR, ILMN, NUS, GNTX, LXK, DD, VFC, CMG, GOOG, BHI, GE, KSU, MS, SLB, STI, LVS, VZ, SNDK, NUE, BTU, AXP, KEY, STLD, URI, USB, INTC, JNJ, SCHW, COST, AA
 
Negative Reactions – DLR, XCO, WU, LNKD, IACI, MSM, INGR, HTS, VRTX, AAPL, PMCS, MWV, AGNC, AGCO, PCL, GT, CMI, VSH, ALSN, ROP, EW, MRK,  RYN, RMD, NCR, KBR, FSL, ESRX, EMN, FIO, CAM, TKR, SYMC, CVA, CDNS, AKAM, XRX, CRI, ORLY, CAT, NFLX, COH, ZION, WAT, EMC, UTX, TXN, HON, ISRG, GS, UNP, UNH, EBAY, IBM, XLNX, SCSS, SWK, MU, FAST
 
 
Chart Signals Strategy Guidelines
When the market is trending up Chart Signals looks for support bounce and resistance breakout entries. 
 
When the market is trending down Chart signals looks for resistance pull back and support break entries. 
 
When the market is sideways in consolidation Chart Signals will look for support bounce, diagonal breakouts and pull backs at resistance where price action stays between support and resistance. 
 
Technical setups for short-term option trades be in and out by earnings release.
Over earnings release use earnings option strategies such as straddles, strangles, OTM calls or puts.
After earnings look for bullish setups in positive reaction stocks and bearish setups in negative reaction stocks.
 
 
The Market Forecast Green Line is above 80.   
 
____________________
 
Setups 
H Breakout: BBBY, BIDU, BRCM, COST, FAST, QCOM, SBUX, STX, WDC, WYNN, ANGI, FAS, LVS, RAX, SPLK, SSYS, UAL,
 
Diagonal Breakout: ADSK, EBAY, MYL, XLNX, YHOO, IBM, QIHU, TPX,
 
Bull Flag: CMCSA, MNST, WFM, ATI, RCL, TLT,
 
Potential Bullish Divergence:    
 
Gap Up: EXPE
 
Gap Down: SBUX
 
Bear Flag: 
 
At Support:  
 
Moves
New Highs: ROST, DDD,  
 
Gap Up: GILD, DWA, LVLT, EA, SEE, LSI, SPW, TFX
 
Gap Down: DLR, XCO, WU, IACI, INGR, HTS,
 
H&D Breakout:  
 
Breakout Test:  
 
Bounce:     
 
MACD Divergence Bounce: 
 
Bear Flag:  
 
Support Break: VECO, YELP,
 
 
______________________
 
 
24 out of 100 NDX stocks closed higher on Wednesday.
 
Leading NDX 100 stocks included: GILD, BIDU, STX, SYMC, XRAY, AAPL, SBUX, GOLD, ALXN
 
Lagging NDX stocks included: VRTX, SHLD, EQIX, TSLA, NFLX, ADP, CELG, FOXA, REGN, SPLS
 
Leading stocks > +2% on Wednesday included: WLT, SSYS, ANR, JCP, ANGI, DDD, SCSS
Lagging stocks < -2.0% included: LNKD, SCTY, TSL, BX, SPWR, P, RAX, GRPN, NTES, VECO, X, GLW, FIVE, YELP
 
Stocks to Watch on Thursday
Holding Above 30 DMA= 68
GRMN, WYNN, AVGO, CTSH, VOD, ROST, ADBE, SNDK, WFM, CHTR, BIDU, SBUX, STX, AMAT, CERN, CMCSA, BBBY, MSFT, XRAY, VRSK, AAPL, HSIC, SPLS, FISV, FOSL, GILD, INTC, INTU, KLAC, LINTA, PAYX, PCLN, SBAC, WDC, LMCA, FOXA, CHKP, DTV, MNST, VIAB, GOOG, ADP, AMGN, AMZN, BIIB, MAT, MDLZ, DISCA, KRFT, CA, CHRW, EXPD, CTRX, GOLD, SIAL, LBTYA, ALXN, COST, DELL, FAST, QCOM, BRCM, LLTC, TXN, ADI, MCHP, MU, SHLD
 
Moving Above 30 DMA = 0
 
Moving Below 30 DMA = 8
CELG, DLTR, ISRG, VRTX, YHOO, LBTYA, NFLX, CHTR
 
Staying Below 30 DMA
MXIM, SRCL, EQIX, ESRX, AKAM, ORLY, SIRI, FFIV, MYL, NVDA, SYMC, ALTR, TSLA, ADSK, XLNX, EBAY, EXPE, NTAP, CSCO, CTXS, GMCR, NUAN
 
Sixteen Week Intermediate Term Market Trend: Up
5-Day Short Term Market Trend: Up

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