SPY Breaks Support...IWM Holds Support...QQQ in Bull Flag After Two Day Reaction...JNPR, MSFT, SBUX, KMB, PG Positive Earnings...

All nine sectors moved lower for the second straight day on Friday…XLP, XLU and XLY were the strongest sectors…while XLI was the weakest sector. 

Breadth weakened as decliners led advancers 6.46 to 1 on the NYSE and 6.00 to 1 on the NASDAQ.

Friday – weakened, decliners led

Thursday – weakened, decliners led

Wednesday – weakened slightly, advancers led

Tuesday – strengthened, advancers led

Monday – holiday

SPY down 3.90 at 178.89 volume 208.6 million shares, above average volume

VIX up 4.37 at 18.14…highest close since Oct 15

TNX down .38 at 27.35…

TLT up .69 at 107.48...

XLF down .49 at 21.11 volume 70.5 million shares, above average volume

AAPL down 10.11 at 546.07 volume 15.5 million shares, above average volume

FB down 2.18 at 54.45…volume 55.5 million shares, below average volume

Technical Commentary: 

DIA – 2.00%, SPY – 2.13%, IWM – 2.55%, QQQ – 1.97%.

While we have pointed out for weeks to move stops up and protect profits and that should have led to positions closing out with profits on Thursday and Friday.  Now it’s time to be defensive.  The markets shifted to down in the short-term and neutral in a six-week time frame this week, while the twelve-week intermediate term and long-term trends are still up.

Just two sectors XLK and XLV are positive, five XLE, XLF, XLI, XLP and XLU are neutral and XLB and XLY turned negative.

The market forecast green line fell below 80 an area that confirms a defensive position and a suspension of intermediate term entries.

Natural gas UNG +7.89% shot to the upside, bonds TLT +0.65% and gold GLD +0.41% continued to rise along on Friday.

Monday kicks off a huge week for earnings AAPL, CAT, RCL, STX, SBUX, X, WYNN and ZION just on Monday.  On Tuesday CMCSA, DD, F, ILMN, VMW and YHOO.  On Wednesday FB, BA and QCOM report and Thursday releases MMM, AMZN, CELG, CMG, GOOG and V.  The week wraps with BIDU, CVX and MA on Friday.

Trade with the trend of the chart you are trading and 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 = 181.34, 183.40, 184.69…

QQQ = 88.18, 89.00…

IWM = 114.48, 116.70…

Support Levels

SPY = 179.12, 177.74, 176.36

QQQ = 86.38, 85.67

IWM = 113.26, 112.14, 110.71

Q4 earnings season continues into the third full week…

Monday – AAPL, CAT, RMBS, RCL, STX, SBUX, X, WYNN, ZION

Tuesday – AKS, AAL, AMGN, CHKP, CRUS, CMCSA, GLW, DD, EA, F, ILMN, LXK, NUE, OI, VMW, YHOO

Wednesday – BIIB, BA, CTXS, DOW, EMC, FB, LRCX, LVS, PSX, QCOM, TSCO, VLO

Thursday – MMM, ALXN, AMZN, BZH, BRCM, CELG, CMG, CL, LLY, XOM, GOOG, HOG, JDSU, MTW, OSTK, BTU, POT, PHM, RVBD, RYL, SHW, BX, TWC, UPS, VIAB, V, WHR,  

Friday – BIDU, CVX, CNX, MA, MAT, NOV, PCAR, SPG, TSN

Q4 Earnings Reactions

Positive Reactions – JNPR, MSFT, KMB, PG, MXIM, SBUX, NFLX, FFIV, URI, UNP, EBAY, MCD, CREE, TXN, UTX, NUAN, XLNX, BHI, DAL, RF, MS, SLB, STI, AXP, SWKS, BAC, LLTC, WEN, MON, MU, STZ, APOL

Negative Reactions – HON, KSU, SWK, STT, ALTR, ISRG, KLAC, KEY, JCI, LMT, WDC, ABT, BAX, ATI, COH, FCX, AMD, IBM, HAL, JNJ, TRV, VZ, GE, COF, INTC, UNH, C, GS, CSX, FAST, AA, FDO, BBBY, SCHN,  

Reversal of Initial Reaction – FAST, FDO, AA

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

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Setups

H Breakout: TLT,  

Diagonal Breakout: RAX, TWTR, AAPL, MU,

Bull Flag: A, BBRY, CRM, CSIQ, GLW, LNKD, MFRM, P, QHIU, RCL, SCTY, SPLK, STI, SWI, SWKS, UAL, DAL, VRSN, M, ADSK, EBAY, ESRX, FFIV, GILD, NTAP, PCLN, TSLA, TXN, XLNX,

Potential Bullish Divergence:  

Gap Up:  

Gap Down:

Bear Flag:  

At Support: ATI, CIEN, CREE, GME, GRPN, IBM, IWM, KKD, MS, SFUN, SOHU, SPWR, SSYS, TSL, XONE, YELP, YNDX, YOKU, Z, AMZN, CELG, FB, GRMN, MNST, TRIP, WDC, WFM,

C- Pattern:

Moves

New Highs: ANGI, JNPR, UNG,  

Gap Up: JNPR, MSFT, SBUX, KMB,          

Gap Down: ISRG, KSU, STT,

H Breakout: GLD, MSFT,

Diagonal Breakout:  

Breakout Test: AKAM, NFLX,

Bounce:

MACD Divergence Bounce: 

Bear Flag: 

Support Break: ANR, C, DDD, DRYS, FAS, FSLR, LVS, MCP, NTES, SINA, SPY, TBT, TPX, WLT, X, YHOO

______________________

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

Leading NDX 100 stocks included: FFIV, SBUX, MSFT, MXIM, GOLD, EQIX, WFM, MAT, ATVI

Lagging NDX stocks included: VIP, ISRG, WYNN, FAST, VRX, NXPI, CELG, NTAP, REGN, FB

Leading stocks > +2% on Friday included: UNG, JNPR, ANGI

Lagging stocks < -2.0% included: DRYS, TSL, CSIQ, WLT, QIHU, XONE, FAS, YNDX, SFUN, DDD, ESI, LVS, ANR, SPLK, SPWR, CIEN, BBRY, YOKU, UAL, SCTY, GME, NTES, YELP, MCP, GLW, X, SOHU, SSYS, SRCL, FSLR, SINA, GOGO, GRPN, VRSN, MFRM, ATI, SWI, MS, Z, P, V, ZION, STI, CRM, C, CREE, A, TPX, IWM, BAC, SCSS, KKD, BX, SPY, SWKS

Stocks to Watch on Monday

Holding Above 30 DMA= 44

WDC, GOOG, ILMN, ADSK, ESRX, ALXN, MNST, CMCSA, GMCR, DTV, STX, BRCM, AVGO, EQIX, ORLY, AKAM, CHKP, FFIV,  VRTX, XLNX, CTRX, CSCO, SBAC, HSIC, SIRI, AMGN, ISRG, MU, MYL, BIIB,  ALTR, EBAY, GILD, MXIM, NXPI, QCOM, REGN, SRCL, TSLA, NTAP, PCLN, SYMC, GOLD, NFLX

Moving Above 30 DMA = 1

MSFT

Moving Below 30 DMA = 23

AAPL, ADBE, AMAT, AMZN, CA, CELG, CERN, CHRW, CTSH, EXPD, FAST, FB, FISV, KLAC, LLTC, NVDA, PCAR, SIAL, SNDK, TXN, VIP, VOD, WYNN

Staying Below 30 DMA

ADP, BIDU, CTXS, GRMN, ADI, KRFT, CHTR, DISH, EXPE, INTC, INTU, MDLZ, LBTYA, TRIP, YHOO, VIAB, LINTA, TSCO, ATVI, PAYX, ROST, DLTR, BBBY, SPLS, FOXA, MAT, DISCA, WFM, VRSK, NFLX, COST, SBUX, LMCA

Sixteen Week Intermediate Term Market Trend: Up

3-Day Short Term Market Trend: Down