All nine sectors moved higher on Friday…XLE,
XLY and XLK were the strongest
sectors…XLP was the weakest
sector.
Breadth weakened… advancers led decliners…2.89 to 1 on
the NYSE and 2.81 to 1 on the NASDAQ.
Friday – weakened, advancers led
Thursday – strengthened,
advancers led
Wednesday –
strengthened, decliners led
Tuesday – weakened,
decliners led
Monday – weakened,
decliners led
SPY up 1.09 at 170.26…volume 105 million shares
VIX down -0.76 at 15.72…
TNX down .03 at 26.82…
TLT down .03 at 105.46...
XLF up .11 at 20.31 volume 38.9 million shares
AAPL up 3.17 at 492.81…volume 9.6 million shares
FB up .06 at 49.11…volume 58.4 million shares
Technical
Commentary:
QQQ +
2.12%, DIA + 2.15%, SPY + 2.16%, IWM + 2.41%.
Stocks moved
higher on Friday as optimism continued that a debt default could be avoided by
Oct 17. Our view is that the weight of
the evidence has indicated for three weeks that the market wanted to go higher
and that a compromise would be reached.
On Tuesday and Wednesday markets sold off suggesting doubt was
increasing about a timely compromise. Markets
rebounded on Thursday and Friday following word of a Republican compromise proposal.
While a
compromise has yet to be reached and the failure to reach a compromise next
week would likely lead to a sharp selloff, it appears likely that a compromise that
avoids default could lead to both the RUT and NDX breaking out of
horizontal resistance. Strength in the RUT
at horizontal resistance with its second highest close on Friday, the NDX
just below resistance, the breadth increasing in the NDX and the huge
gain the Financials XLF over the past two days are indications coming
from big money buying.
JPM and WFC finished with neutral earnings
reactions on Friday while the financials as a whole continued to rise.
MU -1.59. -8.63%
negative earnings reactions following Thursday’s release.
SCTY +8.85,
+23.09% on raised
guidance from the company.
Next week
is a big week for earnings with heavy weights KO, INTC, JNJ, YHOO, AXP, BAC,
EBAY, IBM, CMG, GS, GOOG, UNH, VZ, GE and MS all reporting. We expect that positive surprises in
earnings, revenues and guidance will lead to positive reactions while negative
surprises will likely lead to large selloffs in individual stocks.
Resistance Chart Targets:
QQQ = 79.69
SPY = 172.76
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 neutral.
Support Levels
ES = 1,685, 1,672,
1,660, 1,641
SPY = 168.33, 167.08,
165.31, 164.62
QQQ = 78.40, 77.36,
76.79, 75.99
IWM = 105.82, 104.85,
103.90, 102.94
Earnings to Watch
Monday – SCHN
Tuesday – KO, CSX, INTC, JNJ, LLTC, SCHW, YHOO
Wednesday – AXP, BAC, EBAY, IBM, KEY, MAT, PEP, SNDK, SCSS, SWK, STLD,
USB, URI, XLNX
Thursday – CMG, GOOG, GS, ISRG, LVS, NUE, BTU, UNP, UNH, VZ
Friday – BHI, GE, HON, KSU, MS, SLB, STI
Q3 Earnings Reactions
Positive Reactions –
COST, AA
Negative Reactions –
FAST, MU
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 pointed up.
____________________
Setups
H Breakout: C, CLF, CREE, DNKN, GS, MFRM, SCSS, SSYS, V, VECO, YNDX, ADBE, AMAT,
MYL, SBUX, STX, SYMC, WDC,
Diagonal Breakout: A,
ANR, ATI, CRM, DDD, F, GLW, MCP, PWRD, QIHU, VRSN, BTU, XONE, AAPL, AKAM, FFIV,
QCOM, TSLA,
Bull Flag: CIEN, KKD,
Potential Bullish
Divergence: JNPR, UAL,
Gap Up:
Gap Down:
Bear Flag: LNKD, NTES, RAX,
RCL, Z, AMGN,
At Support: GLD, UAL,
Moves
New Highs: CMG, CNX, LVS,
TSL, LCC, X, CTSH, GRMN, STX, WFM, WYNN,
Gap Up: SCTY,
Gap Down:
H&D Breakout: BAC, FAS,
LVS, SPY, ZION, ADBE, BBBY, CMCSA, MSFT, TXN, XLNX,
Breakout Test:
Bounce: FIVE, FSLR, SINA,
SOHU, SPLK, SWK, YELP, YOKU, AXP, ADSK, AMZN, BIDU, GOOG, ROST,
MACD Divergence Bounce:
SSYS, STI, SWI, CSCO,
Bear Flag:
Support Break: GLD,
______________________
80 of 100 NDX stocks
closed higher on Friday.
Leading NDX 100 stocks included: CTSH, CHKP, TSLA,
WYNN, WFM, LMCA, ADBE, AMZN, WDC, ORLY
Lagging NDX stocks included: MU, REGN, FAST, MDLZ, NFLX, GOLD, CTRX, NVDA,
BRCM, SHLD
Leading stocks > +2% on Thursday
included: SCTY, ANR, AKS, CNX, TSL, SSYS, CLF, WLT, YOKU, LVS,
LDK, DDD, Z, FSLR, ESI, FAS, URE
Lagging stocks < -2.0% included: CDE, FAZ
Stocks to Watch on Monday
Holding Above 30 DMA= 60
GRMN, FB,
WYNN, ADSK, AVGO, CTSH, VOD, MU, MXIM, ROST, YHOO, ADBE, DLTR, SNDK, WFM, CHTR,
BIDU, MYL, SBUX, STX, AMAT, CERN, CMCSA, BBBY, MSFT, XRAY, VRSK, ISRG, AAPL,
HSIC, SPLS, AKAM, AMZN, ATVI, BRCM, CELG, COST, DELL, DISCA, EXPE, FFIV, FISV,
FOSL, FOXA, GILD, INTC, INTU, KLAC, LINTA, LMCA, ORLY, PAYX, PCAR, PCLN, SBAC, SIRI,
SRCL, TXN, WDC, XLNX
Moving Above 30 DMA = 7
CHKP, DTV, EBAY, LLTC, MCHP, SYMC,
TSLA
Moving Below 30 DMA = 1
REGN
Staying Below 30 DMA
SHLD, FAST, NVDA, ALXN,
BIIB, VIAB, KRFT, NFLX, VIAB, AMGN, LBTYA, MAT, QCOM, SIAL, CHRW, EXPD, GOOG, NTAP,
ALTR, EQIX, MDLZ, ADP, ADI, CA, CSCO, CTXS, NUAN, GMCR, GOLD, ESRX, VRTX, CTRX,
MNST
Sixteen Week Intermediate
Term Market Trend: Up
5-Day Short Term Market
Trend: Neutral
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