Stocks Crushed as Washington Drama Drags On...FB, AAPL Lead NDX Lower as XONE, MNST and KKD Rise...

One out of nine sectors moved higher on Tuesday…XLU, XLP and XLE were the strongest sectors…XLB was the weakest sector. 

 

Breadth weakened…decliners led advancers…4.31 to 1 on the NYSE and 4.04 to 1 on the NASDAQ.

 

Tuesday – weakened, decliners led

Monday – weakened, decliners led

Friday – strengthened, advancer led

Thursday – weakened, decliners led

Wednesday – weakened, decliners led

 

 

SPY down 1.95 at 165.48…volume 178 million shares

VIX up .93 at 20.34…

TNX up .02 at 26.36…

TLT up .03 at 106.17...

XLF down .25 at 19.57…volume 73.4 million shares

 

AAPL down 6.81 at 480.94…volume 10.3 million shares

FB down 3.38 at 47.14…volume 136 million shares

 

Technical Commentary: 

QQQ – 1.93%, IWM – 1.62%, SPY – 1.16%, DIA – 0.99%.

 

Stocks collapsed as politicians continue to offer excuses instead of results.  The SPY breaks support triggers bearish entries and falls to 161.8% Fib extension at 165.47.  SPY closes just one cent above its 161.8% Fib level.   ES futures broke the 1,672 support level, fell through its 1,660 support and moved towards its 1,641 support level.

 

DIA which closed lower on Wednesday fell to its late August support.  DIA was led lower by T, VZ, V, IBM and 23 other Dow stocks.  Only WMT, PG and KO closed higher.

 

The NDX -61.82, -1.92% was hardest hit with leading stocks FB, AAPL, GILD, GOOG, AMZN, BIIB, MSFT, BIDU, PCLN, CELG, EBAY, AMGN, INTC, QCOM, CSCO, YHOO, ALXN and REGN accounting for two-thirds of the points.  Only MNST, CTRX, VRSK and ISRG closed higher.

 

Traders likely found many positions hitting stops and bearish trades being triggered in on Wednesday.  Follow your rules.
 

 

Resistance Chart Targets:

QQQ = 79.69

SPY = 173.60

 

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 down.

Support Levels

ES = 1,672, 1,660, 1,641, 1,681

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

 

 

Q2 Earnings Reactions

Positive Reactions – NKE, BBBY, ULTA, FIVE, CIEN, SPLK, CRM, GES, DSW, ADSK, ROST, GME, JRCC, RAX, SSYS, TMUS, SGMS, FWLT, MNST, GRPN, TSLA, AGU, BOFI, FOSL, ADM, MGM, WPO, CNK, KORS, SATS, MGM, EAT, VIAB, YOKU, AIG, CTRX, CHK, COP, LNKD, MELI, MYL, NUS, ZAGG, CMCSA, CTRP, GRMN, HES, MA, MCHP, SODA, YELP, QCOR, FISV, BWLD, MTW, VRTX, WYNN, SWK, SBUX, ALK, AMZN, CELG, CB, CLF, GILD, IP, MXIM, RCL, HSY, UA, UAL, V,   FB, BIDU, TRIP, COG, CTXS, ETFC, FFIV, AKAM, AAPL, EA, VMW, DAL, LCC, EMC, LLY, MCO, AKS, FCX, BTU, UTX, HAS, TXN, GE, HON, SLB, STI, WHR, CHKP, CMG, JCI, KEY, MS, OSTK, SWKS, UNP, UNH, BAC, IBM, SNDK, XLNX, CSX, GS, URI, YHOO, C, WFC

 

Negative Reactions – P, SHLD, PWRD, CREE, MCP, GMCR, SCTY, SUNE, Z, CAR, CHRW, FSLR, LINTA, ANR, CVX, CME, XOM, K, DTV, RVBD, X, COH, DISCA, ESRX, SOHU, DLR, CERN, CRUS, DECK, DNKN, EXPE, KLAC, POT, PCP, SWI, TPX, EQIX, ABC, CROX, ANGI, ATI, CAT, WDC, PNRA, STX, NSC, USNA, TRV, MCD, MO, NFLX, ZION, BHI, AMD, GOOG, ISRG, MSFT, EBAY, INTC, MAT, SCSS, USB, AXP, KO, MOS

 

 

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 down.   

 

____________________

 

Setups 

H Breakout: AMAT, KKD, SCSS, SCTY, TLT,

 

Diagonal Breakout: AAPL, WDC, GLD,  

 

Bull Flag: AMZN, BIDU, CELG, CMCSA, CTSH, FAST, FB, GRMN, MSFT, MYL, NFLX, NTAP, PCLN, ROST, SHLD, TXN, WYNN, YHOO, A, ALK, CIEN, CNX, CREE, NKE, SINA, SOHU, SWK, V, VECO, X

 

Potential Bullish Divergence:   

 

Gap Up:

 

Gap Down: 

 

Bear Flag:

 

At Support: ADSK, NUAN, BAC, C, P, STI, UAL,   

 

Moves

New Highs: 

 

Gap Up: UNG,     

 

Gap Down: MAT, SWI,    

 

H&D Breakout: SYMC,    

 

Breakout Test: 

 

Bounce: MNST,    

 

MACD Divergence Bounce: 

 

Bear Flag:  

 

Support Break: ANR, F, GRPN, LNKD, QIHU, TIF,

 

 

______________________

 

 

4 of 100 NDX stocks closed higher on Tuesday.

 

Leading NDX 100 stocks included: MNST, CTRX, VRSK, ISRG

 

Lagging NDX stocks included:  FB, BIDU, ALXN, NFLX, BIIB, TSLA, VRTX, PCLN, CTXS, GILD, REGN, YHOO, FFIV, CELG, LINTA, AKAM, ADSK, MU

 

Leading stocks > +2% on Tuesday included: XONE, FAZ

 

Lagging stocks < -2.0% included: YELP, SINA, SOHU, NTES, LNKD, TPX, HLF, GRPN, CIEN, ESI, CRM, RCL, FAS, SSYS, ANR, DDD, GLW, VMW, AKS

 

 

Stocks to Watch on Wednesday

Holding Above 30 DMA= 40

TSLA, GRMN, PCLN, FB, WYNN, NVDA, ADSK, AVGO, CTSH, VOD, SHLD, CELG, MU, MXIM, ROST, YHOO, REGN, ADBE, DLTR, KLAC, KLAC, SNDK, FAST, SIRI, WFM, LMCA, CHTR, BIDU, MYL, SBUX, STX, AMAT, CERN, CMCSA, BBBY, MSFT, FFIV, XRAY, VRSK, ISRG

 

Moving Above 30 DMA = 0

 

Moving Below 30 DMA = 23

AAPL, AKAM, ALXN, AMZN, BIIB, BRCM, DELL, EBAY, EXPE, FOSL, INTU, LINTA, ORLY, SPLS, SRCL, XLNX, TXN, VIAB, SBAC, WDC, KRFT, NFLX, FOXA

 

Staying Below 30 DMA

AMGN, CHKP, FISV, GILD, HSIC, MAT, QCOM, SIAL, DISCA, LBTYA, CHRW, EXPD, GOOG, LLTC, MCHP, NTAP, PAYX, PCAR, ALTR, ATVI, COST, EQIX, INTC, MDLZ, ADP, DTV, CA, ADI, CSCO, CTXS, NUAN, GMCR, GOLD, ESRX ,VRTX, CTRX, SYMC, MNST

 

Sixteen Week Intermediate Term Market Trend: Up

5-Day Short Term Market Trend: Down