Broad Indexes Continue to Consolidate as TWTR, V, WDC, WYNN Make New Highs...FB Near All-time Closing High...Flag and Divergence Setups Appear...

Five of nine sectors moved higher on Friday…XLB, XLI and XL& were the strongest sectors…while XLE was the weakest sector. 

Breadth strengthened…advancers led decliners…1.32 to 1 on the NYSE and 1.43 to 1 on the NASDAQ.

Friday – strengthened, advancers led

Thursday – strengthened, decliners led

Wednesday – weakened, decliners led

Tuesday – weakened, decliners led

Monday - mixed

SPY down .02 at 178.11 volume 107.8 million shares

VIX up .22 at 15.76…

TNX down.09 at 28.68…

TLT up .50 at 103.21...

XLF up .02 at 21.13 volume 72.4 million shares, double average volume

AAPL down 6.11 at 554.43 volume 11.8 million shares

FB up 1.49 at 53.32…volume 62.8 million shares

Technical Commentary: 

IWM + 0.33%, DIA + 0.11%, SPY – 0.01%, QQQ – 0.13%.

Trading volume shifted from the Dec Z3 contracts to the Mar H4 on Friday.

IWM moved up for the second straight day and confirmed Thursday’s bullish harami after finding support just above its late November lows in the 109 area.

SPY formed a spinning top at the 178 support area of its four-week trading range.

QQQ closed slightly lower in a bull flag pattern that is at its early December 84.80 support area.

DIA formed a bullish harami on Friday as it found support at its early November 157 consolidation area.

The broad indexes are all at near term support levels and could either bounce off or break support.  Traders must be prepared for a move in either direction short-term.

FB 53.32, +1.49, +2.87% made its third highest close ever less than $1 below its Oct 18 and 21 closes.  It made a 7-week horizontal breakout on Friday and is currently forming a 9-week horizontal breakout setup just below its all-time high.

TWTR 59.00, +3.67, +6.63% made a new high close on Friday and has risen 51% from its Nov 25 post IPO closing low at 39.06.

Finish 2013 strong by following your rules and begin to look for positive changes to make in 2014.

Albert Einstein: “Insanity: doing the same thing over and over again expecting different results.”

Remember it is big money that creates and sustains the trend.  As Granville 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 up trend chart targets:

Chart Targets:

SPY = 182.06, 183.02…Monday’s high 181.67 within 39 cents of horizontal resistance

QQQ = 86.69, 85.77…exceeded on Friday

IWM = 113.10, 114.39…

Short-term SPY posture is pull back at resistance.

Support Levels

ES = 1,797, 1,783, 1,774

SPY = 179.93, 177.98

QQQ = 84.78, 84.11

IWM = 110.88, 110.37, 108.85

Q3 Earnings Reactions

Positive Reactions – AVGO, MFRM, SPLK, MRVL, GMCR, 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 – ROST, GME, 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

The Market Forecast Green Line is pointed down and below 80.   

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Setups 

H Breakout: A, DDD, X, YOKU, AKAM, GMCR, YHOO

Diagonal Breakout: BAC, GRPN, P, RAX, RCL, SCSS, SCTY, SSYS, SWK, TBT, VECO, YELP, Z, CMCSA,

Bull Flag: BX, CNX, GOGO, JNPR, LNKD, LVS, MFRM, NTES, SOHU, SPLK, SWKS, TIF, AAPL, AMZN, BIDU, BRCM, CELG, GMCR, GOOG, MNST, MU, PCLN, QCOM, STX,

Potential Bullish Divergence: ALK, ANR, CLF, CMG, CRM, FSLR, KKD, SPWR, STI, XONE, FAST, SNDK, SYMC,

Gap Up:

Gap Down:

Bear Flag: FIVE,

At Support: FAS,

C- Pattern:

Moves

New Highs: TWTR, UNG, V, WDC, WYNN,

Gap Up: ADBE,  

Gap Down: 

H Breakout: SWI, FB, ADSK,

Diagonal Breakout:    

Breakout Test: NFLX,

Bounce: PWRD, SFUN, UAL, VRSN, YOKU, ADSK,

MACD Divergence Bounce: ATI, BBRY, X, ROST,

Bear Flag:  

Support Break: 

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50 out of 100 NDX stocks closed higher and one was unchanged on Friday.

Leading NDX 100 stocks included: ADBE, ADSK, AKAM, CTRX, FB, MU, GMCR, SIR, GILD, ROST

Lagging NDX stocks included: SHLD, VOD, REGN, ISRG, MSFT, CSCO, NFLX, GRMN, TXN, BRCM

Leading stocks > +2% on Friday included: TWTR, PWRD, SWI, GME, YOKU, AAL, X, BBRY, UAL, Z, SFUN

Lagging stocks < -2.0% included: XONE, SCTY

Stocks to Watch on Monday

Holding Above 30 DMA= 40

CTSH, AAPL, FISV, INTU, WDC, GOOG, AMZN, MAT, LLTC, MU, EXPE, NFLX, ADSK, ESRX, ALXN, PCLN, MDLZ, MNST, YHOO, QCOM, SIAL, CELG, BIIB, CMCSA, LBTYA, GMCR, DTV, STX, BIDU, BRCM, FB, WYNN, AVGO, INTC, EQIX, FFIV, XRAY, TSLA, ORLY, CHTR, VRTX

Moving Above 30 DMA = 6

ADBE, AKAM, EBAY, GILD, VIAB, VRSK

Moving Below 30 DMA = 3

CA, PAYX, VOD

Staying Below 30 DMA

ADP, GRMN, MSFT, SPLS, TXN, KRFT, ATVI, BBBY, CHKP, CTXS, FAST, HSIC, MCHP, MYL, NTAP, NVDA, PCAR, SNDK, LINTA, SRCL, ADI, COST, KLAC, SBUX, LMCA, SHLD, SIRI, DISCA, REGN, FOSL, ISRG, NUAN, ROST, SYMC, AMGN, DLTR, GOLD, SBAC, CHRW, FOXA, CSCO, AMAT, VIP, WFM, CTRX, EXPD, MXIM, ALTR, XLNX

Sixteen Week Intermediate Term Market Trend: Up

3-Day Short Term Market Trend: Down