SPY, DIA, IWM and QQQ Bull Flag Bounce Following Jobs Report...QQQ New High Close...

All nine sectors moved higher on Friday…XLI, XLB and XLF were the strongest sectors…while XLE was the weakest sector. 

Breadth strengthened…advancers led decliners…2.58 to 1 on the NYSE and 2.08 to 1 on the NASDAQ.

Friday – strengthened, advancers led

Thursday – mixed, decliners led

Wednesday – weakened, decliners led

Tuesday – strengthened slightly, decliners led

Monday – weakened, decliners led

SPY up 2.00 at 180.94 volume 127.6 million shares, increasing volume

VIX down 1.29 at 13.79…

TNX up .21 at 28.83…

TLT up .49 at 102.92...

XLF up .29 at 21.39 volume 30.3 million shares, bull flag bounce

AAPL down 7.88 at 560.02 volume 12.3 million shares, day one pullback

FB down .40 at 47.94…volume 42.9 million shares

Technical Commentary: 

DIA +1.29%, SPY +1.12%, IWM + 0.78%, QQQ +.73%

Friday’s Jobs Report of 203,000 new jobs above forecast of 180,000 and a 7.0% unemployment rate enticed buyers back into stocks after a four day bull flag pattern with a bounce entry.  While many speculated that good news could lead to lower prices on taper speculation, in the end the positive economic report led to higher prices.

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SPY, DIA, IWM and QQQ each recovered the week’s pullback in one day with QQQ making a new high close.  The flag bounce we had been looking for occurred on Friday.  Manage open positions according to your rules.

New highs occurred in many stocks including GOOG, CELG, CTSH, STX, WDC and TXN while AAPL took a breathier after hitting a 52-week high on Thursday.

MFRM continued to rise +2.10, +5.40% for a second day following earnings.

CTSH bounced to a new high close.  YOKU pulled back at horizontal resistance.  SLXP bounced in a 13 day bull flag.

Post Earnings Commentary

SPLK pulled back into its earnings flag after a bounce on Thursday while MRVL is in the tenth day and JKS in the fourteenth day of their earnings flag.  GMCR which also formed a four-day earnings flag and bounced is nearing horizontal resistance and is a potential breakout setup.  AVGO pulled back on Friday after gaining +3.09 or +6.94% on a positive earnings reaction on Thursday. 

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.”

New short term chart targets:

Chart Targets:

SPY = 182.06, 183.02…Friday’s high 181.75

QQQ = 85.14, 85.77…touched on Friday

IWM = 114.39, 116.10…Friday’s high over 114

Short-term SPY posture is up in bull flag bounce.

Support Levels

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

SPY = 179.93, 177.98

QQQ = 84.11

IWM = 111.62, 110.88

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 below 80.   

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Setups 

H Breakout: CIEN, CREE, DDD, JNPR, LNKD, BA, DIS, NKE, XOM, FB, GRMN, MAT, QCOM  

Diagonal Breakout: P,   

Bull Flag: ALK, BX, C, GOGO, GS, JPM, MRK, UNH, AAPL, AMZN, NFLX, PCLN

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Potential Bullish Divergence: 

Gap Up:

Gap Down:

Bear Flag: ATI, NUE, BTU, WLT

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At Support:

C- Pattern:

Moves

New Highs: LVS, GOOG, CELG, CTSH, STX, WDC, TXN

Gap Up:

Gap Down:     

H Breakout: STX, TXN, WDC, CAT, CELG, CTSH, GOOG   

Diagonal Breakout: A, GLW, BA, ANGI,   

Breakout Test:

Bounce: SPY, IWM, DIA, QQQ, XLF, FAS, RCL, LCC, DAL, CMCSA, AXP, CVX, GE, JNJ, MMM, PG, TRV, WMT

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MACD Divergence Bounce: ANGI

Bear Flag: 

Support Break:

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80 out of 100 NDX stocks closed higher and two unchanged on Friday.

Leading NDX 100 stocks included: VRSK, ORLY, STX, MU, MCHP, GMCR, WDC, ALXN, FISV, VIP

Lagging NDX stocks included: SHLD, TSLA, NVDA, AAPL, AVGO, EQUX, NFLX, FB, CHRW, FOSL

Leading stocks > +2% on Friday included: MFRM, FAS, GLW, LNKD, Z, A, ANGI

Lagging stocks < -2.0% included: JCP, TSL, FIVE, ANR, YOKU, MCP, RAX, SSYS, FSLR, SINA, P, PWRD, VECO, YNDX, SWKS, X, WLT, ESI

Stocks to Watch on Monday

Holding Above 30 DMA= 48

CTSH, VOD, MSFT, AAPL, FISV, INTU, WDC, CHKP, GOOG, ADP, AMZN, MAT, CA, LLTC, TXN, MCHP, MU, EXPE, NFLX, ADSK, ESRX, ALXN, GILD, MYL, PCLN, MDLZ, MNST, YHOO, QCOM, NTAP, SIAL, CELG, BIIB, CMCSA, CTXS, LBTYA, GMCR, DTV, STX, NVDA, BIDU, BRCM, WYNN, FB, AVGO, GRMN, INTC, EQIX

Moving Above 30 DMA = 17

ADI, ATVI, BBBY, CERN, EBAY, FFIV, HSIC, KRFT, LINTA, ORLY, PAYX, PCAR, SPLS, SRCL, VIAB, VRSK, XRAY

Moving Below 30 DMA = 0

Staying Below 30 DMA

ADBE, AKAM, COST, VRTX, KLAC, LMCA, SBUX, TSLA, CHTR, DISCA, REGN, SHLD, SIRI, FOSL, ISRG, NUAN, ROST, SYMC, AMGN, DLTR, GOLD, SBAC, SNDK, CHRW, FOXA, CSCO, AMAT, VIP, CTRX, WFM, EXPD, FAST, MXIM, ALTR, XLNX

Sixteen Week Intermediate Term Market Trend: Up

3-Day Short Term Market Trend: Up