Bull Flags Form as Selling Rotates to SPY, DIA from IWM...ICE Hits All-time High and Solar Stocks Warm Up...

Only one of nine sectors moved higher on Wednesday…XLV, XLE and XLF were the strongest sectors…while XLU was the weakest sector. 

 

Breadth strengthened slightly on the NASDAQ…decliners led advancers…1.99 to 1 on the NYSE and 1.18 to 1 on the NASDAQ.

 

Wednesday – strengthened slightly, decliners led

Tuesday – weakened, decliners led

Monday – weakened, decliners led

Friday – strengthened, advancers led

Thursday – weakened slightly, mixed

 

 

SPY down .56 at 178.47…volume 124.8 million shares

VIX up .01 at 13.40…

TNX up .80 at 27.92…

TLT down 1.78 at 102.78...

XLF down .06 at 21.09 volume 31.9 million shares

 

AAPL down 4.55 at 515.00…volume 6.9 million shares

FB up .07 at 46.43…volume 53.9 million shares

 

Technical Commentary: 

IWM – 0.04%.  QQQ – 0.24%, SPY – 0.31%, DIA – 0.35%.

 

Selling rotated from IWM and QQQ on Monday and Tuesday to DIA and SPY on Wednesday as IWM finished down just 4 cents.  RUT leaders included: ALG, DAKT, LZB, ARO, FNGN, ESC, GTN, AEIS, CLVS and OPK.

 

Financials, XLF -0.06 which have been relatively strong Monday and Tuesday, showed slight weakness on Wednesday as BAC, C and JPM moved lower while WFC, ZION, RF, STI, CME moved slightly higher and ICE +6.65, +3.22% closed at a new all-time high.  Watch for any further weakness in the financials as an indication that stocks may be ready for a pull back after a six-week rally.

 

The dollar gained as the Euro fell.  Gold and silver broke short-term support and closed near their daily lows.

 

Solar stocks began heat up as TSL, AEIS, JKS, CSIQ and FSLR reversed Tuesday’s pullback.

 

Breadth is continuing to weaken slightly while many individual stocks continue in strong up trends.  Traders should continue to trade with trend of the individual stock and be vigilant in protecting profits.  Continue to move profit protection stops according to your rules. 

 

A bull flag is appearing in most sectors and is most apparent in XLB, XLE, XLI, XLK, XLP, XLU and XLY.  Seventeen percent of the NDX 100 stocks have fallen below their 30 DMA over the past three days with just 53% still above.

 

 

Chart Signals knows that it is important to realize that as a trader you don’t know the future and that your favorite market commentator or the television talking heads don’t know the future either, but it is the charts themselves that give, through the buying and selling actions shown, the most objective estimate of future price action.  Of course when new information becomes known that will be factored into the price action which will at times change the trend prior to a chart target.

 

Chart Targets:

SPY = 180.99, 182.69…

QQQ = 84.74, 85.52…

IWM = 110.96, 112.83…

 

 

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 SPY posture is down.

Support Levels

ES = 1,774, 1,736

SPY = 177.64, 174.76

QQQ = 83.48, 82.77, 81.37

IWM = 107.93

 

Earnings this week: JKS, CRM, TSL, ADSK, BBY, HD, JCP, GME, P, SPLK,

 

Q3 Earnings Reactions

Positive Reactions – JCP, LZB, JKS, BRCD, TSN, YOKU, SINA, NTAP, SLXP, PCLN, NVDA, GRPN, AWAY, PRU, TPX, TSO, CTSH, FSLR, TRMB, MDVN, NATI, SPR, ONNN, EXPE, CRR, HAR, GTI, ATML, THOR, TRN, FLT, MCHP, ITT, DICSA, ANR, SWKS, FB, CMCSA, GILD, DWA, LVLT, EA, SEE, SPW, TFX, JCI, 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 – BBY, CPB, JEC, TSL, CRM, CSCO, RAX, MNST, QCOM, SCTY, IPGP, AIG, BRKR, HME, NEM, XLS, Z, NIHD, AVP, WTW, ROVI, GRMN, JDSU, OSK, CNW, ITRI, CTRX, KRFT, GRMN, MYL, DLR, XCO, WU, LNKD, IACI, MSM, INGR, HTS, VRTX, AAPL, PMCS, MWV, SOHU, AGNC, AGCO, PCL, GT, CMI, VSH, ALSN, ROP, EW, MRK,  RYN, RMD, NCR, KBR, FSL, ESRX, EMN, FIO, SIRI, 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: GILD, YHOO, IBM, TBT, FNGN,

 

Diagonal Breakout: FB,  

 

Bull Flag: ADBE, ADSK, AMZN, BIDU, COST, CTSH, GOOG, MAT, MU, NVDA, QCOM, SHLD, SNDK, STX, TXN, DDD, ESI, FAS, FSLR, P, RCL, SPY, SSYS, TIF, TRIP, XONE,

 

Potential Bullish Divergence:  CREE, FB

 

Gap Up:

 

Gap Down:

 

Bear Flag:

 

At Support: EBAY, GRPN, TLT, YNDX,

 

C- Pattern:

 

Moves

New Highs:  ICE, ALG, DAKT, GTN, ZNGA,

 

Gap Up: PCLN, JCP, LZB    

 

Gap Down:  

 

H Breakout:  ARO, GTN,

 

D Breakout:

 

Breakout Test: SPY, QQQ, XLB, XLP, XLY

 

Bounce: MSFT, YHOO, GILD, MSFT, AEIS, CLVS, FNGN, ESC, OPK 

 

MACD Divergence Bounce:

 

Bear Flag:  

 

Support Break: GLD, SLV

 

 

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35 out of 100 NDX stocks closed higher on Wednesday and one was unchanged.

 

Leading NDX 100 stocks included: VRTX, YHOO, PCLN, GILD, ATVI, CTXS, MYL

 

Lagging NDX stocks included: TSLA, GOLD, EBAY, DTV, BIDU, SBAC, SNDK, CHRW, VIP

 

Leading stocks > +2% on Wednesday included: JCP, TSL, TBT, UNG, JNPR, SWKS

 

Lagging stocks < -2.0% included: XONE, DDD, GRPN, Z, ANGI, SSYS, YOKU, ESI, LNKD, GLD, YNDX, TIF

 

Stocks to Watch on Thursday

Holding Above 30 DMA= 52

CTSH, VOD, ROST, ADBE, SBUX, MSFT, XRAY, AAPL, HSIC, FISV, FOSL, INTC, INTU, LINTA, PAYX, WDC, CHKP, DTV,  GOOG, ADP, AMZN, MAT, DISCA, CA, COST, LLTC, TXN, ADI, MCHP, MU, EXPE, NFLX, ADSK, ESRX, ISRG, ALXN, GILD, MYL, PCLN, MDLZ, MNST, SHLD, YHOO,  QCOM, AMGN, NTAP, SRCL, BIDU, SIAL, CELG, BIIB, GRMN

 

Moving Above 30 DMA = 1

ATVI

 

Moving Below 30 DMA = 8

BBBY, CMCSA, DLTR, GOLD, LBTYA, NVDA, SBAC, SNDK

 

Staying Below 30 DMA

CERN, CHRW, STX, WYNN, BRCM, KLAC, PCAR, SIRI, EQIX, FOXA, EBAY, SPLS, AVGO, CSCO, VIAB, CTXS, AMAT, VIP, WFM, CTRX, KRFT, REGN, VRSK, LMCA, TSLA, EXPD, FAST, CHTR, VRTX, FB, MXIM, AKAM, ORLY, FFIV, SYMC, ALTR, XLNX, NUAN, GMCR

 

 

Sixteen Week Intermediate Term Market Trend: Up

3-Day Short Term Market Trend: Down