Wednesday, January 8, 2014

Rotation Keeps Indexes in Range...While Many Stocks MU, STX, FAS, LVS, YELP and More Are At or Near New Highs...Bull Flags Continue to Fly...

Three of nine sectors moved higher on Wednesday…XLV, XLB and XLF were the strongest sectors…while XLP was the weakest sector. 

Breadth weakened as decliners led advancers…1.30 to 1 on the NYSE and 1.07 to 1 on the NASDAQ.

Wednesday – weakened, decliners led
Tuesday – strengthened, advancers led
Monday – weakened, decliners led
Friday – strengthened, advancers led
Thursday – weakened, decliners led


SPY up .04 at 183.52 volume 96.5 million shares
VIX down .05 at 12.87…
TNX up .56 at 29.93…
TLT down .28 at 102.58...
XLF up .08 at 21.99 volume 35.9 million shares

AAPL up 3.42 at 543.46 volume 9.2 million shares
FB up .31 at 58.23…volume 56.8 million shares


Technical Commentary: 
QQQ + 0.22%, IWM + 0.13%, SPY + 0.02%, DIA – 0.38%.

QQQ led the broad market for the second straight day on the strength of gains in BIIB, AAPL, MU, AMZN, CELG, ESRX, GILD, SNDK and BIDU.  The SPX -0.39 was near even and the VIX -0.05 confirmed as it closed near unchanged on Wednesday.

Rotational buying and selling before the start of earnings season has kept the broad indexes in a short-term neutral range over the first five trading days of 2014.  A look at the list of stocks in our lists below indicates that a large number of stocks are at new highs, have had horizontal breakouts or are at horizontal resistance setting up a potential breakout.  The trend is still up.

FOMC minutes were released on Wednesday with comments on the economic outlook, the labor market, and the impact of bond purchases.  The stability in the labor market was a major factor in beginning the reduction of bond purchases in December.

QIHU +7.60, +9.34% gapped higher after announcing the appointment of a senior Google VP in China to be its new Chief Business Officer.  Volume soared to 9.4 million shares.

MU +2.14, +9.85% which released better than expected EPS after the close on Tuesday and gained 1.55 in after-hours increased that gain on Wednesday open with its highest close in more than ten years.

MON +2.42, +2.15% gained and SCHN -0.98, -3.16% fell after both companies released earnings before the open

BBBY -6.68, -8.38% fell in after-hours trading after missing earnings and revenue estimates and lowering Q4 guidance.

Trade with the trend, move your protective stops. Continue to follow your rules.

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:
SPY = 184.69, 186.06, 186.90
QQQ = 87.79, 88.74
IWM = 115.98, 116.70, 118.54

Q4 earnings season unofficially starts next Thursday, January 9 with the AA earnings release after the close.

Tuesday – APOL, MU
Wednesday – BBBY, MON, SCHN
Thursday – AA, FDO,

Q4 Earnings Reactions
Positive Reactions – MON, MU, APOL



Negative Reactions – BBBY, SCHN,

The Market Forecast Green Line closed below 80.

____________________

Setups 
H Breakout: FB, SCTY, TSL, ADSK, ALXN, AMGN, AMZN, ATVI, AVGO, BIDU, BRCM, CA, CHKP, ILMN, MYL, A, CIEN, CMG, CRM, ESI, SINA, SOHU, SPWR, SWI, V, YNDX, ZION
Diagonal Breakout: ADBE, NTAP, BX, KKD, MFRM,
Bull Flag: ATI, X, AKS, DRYS, GRPN, INTC, XLNX, TSCO, ANGI, GS, MCP, RAX, RCL, SPY, IWM, TIF, TPX, NUE, STLD, XONE,
Potential Bullish Divergence: GME,  
Gap Up:
Gap Down:
Bear Flag: LNKD,
At Support: MSFT, ANR, FSLR, GOGO, SCSS, TWTR, UNG, WLT,
C- Pattern:

Moves
New Highs: SNDK, STX, WDC, WYNN, YHOO, C, BBRY, CREE, FAS, GLW, JNPR, LVS, NTES, P, VRSN, YELP,
Gap Up: MU, MCK, APOL,          
Gap Down:       
H Breakout: A, SNDK, NVDA, AAL, DAL, FIVE, LVS, QIHU, UAL, YELP,
Diagonal Breakout: 
Breakout Test: SPLK, VECO, Z,
Bounce: TSLA, TSN, BIIB, NXPI, CHKP, ALK, CRM, DDD, SCTY, SSYS, SWI, V,
MACD Divergence Bounce: SBUX, TRIP,
Bear Flag: 
Support Break: JCP,

______________________


55 out of 100 NDX stocks closed higher and two were unchanged on Thursday.


Leading NDX 100 stocks included: MU, BIIB, SNDK, MYL, NXPI, CTXS, WYNN, DISH, ISRG, CELG

Lagging NDX stocks included: DISCA, SIRI, LMCA, WFM, MSFT, CERN, FOXA, EXPE, COST, CHTR

Leading stocks > +2% on Wednesday included: QIHU, YELP, UAL, SCTY, CIEN, DDD, CRM, DAL, NTES, LVS, ESI, GME, AAL, SOHU, ALK, FIVE

Lagging stocks < -2.0% included: JCP, GOGO, YOKU, TWTR, YNDX, MCP, UNG, WLT, ANGI

Stocks to Watch on Thursday
Holding Above 30 DMA= 74
CTSH, FISV, INTU, WDC, GOOG, AMZN, ILMN, LLTC, EXPE, ADSK, ESRX, ALXN, MDLZ, MNST, YHOO, DISH, SIAL, CMCSA, LBTYA, GMCR, DTV, STX, BIDU, BRCM,  FB, WYNN, AVGO, INTC, EQIX, TSLA, ORLY, ADBE, AKAM, VIAB, CA, CHKP, FFIV, LINTA, PCAR, TSCO, SNDK, VRTX, XLNX, ADP, ATVI, CTXS, PAYX, CTRX, FOXA, KRFT, AMAT, NVDA, BBBY, CSCO, SYMC, SBAC, CHTR, DLTR, ROST, HSIC, MXIM, SIRI, AMGN, ISRG, MU, MYL, NTAP, QCOM, SPLS, SRCL, ADI, VIP, TRIP

Moving Above 30 DMA = 4
BIIB, CELG, NXPI, TXN

Moving Below 30 DMA = 4
ALTR, DISCA, EBAY, MAT

Staying Below 30 DMA
GILD, KLAC, AAPL, CHRW, EXPD, WFM, FAST, NFLX, VRSK, PCLN, GRMN, MSFT, CERN, COST, LMCA, SBUX, REGN, GOLD

Sixteen Week Intermediate Term Market Trend: Up
3-Day Short Term Market Trend: Neutral

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