Monday, January 27, 2014

Stocks Continue To Slide...AAPL Earnings Report Disappoints...AAPL Down In After-Hours Trading 8.08%...STX Also Disappoints After Earnings...STX Down 6.13%...Numerous Stocks Break Support Or Close At Support...Numerous Bull-Flag Setups...

Two out of nine sectors moved higher on Monday…XLU, XLI and XLE were the strongest sectors…while XLK was the weakest sector. 

Breadth strengthened as decliners led advancers 2.86 to 1 on the NYSE and 3.43 to 1 on the NASDAQ.

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


SPY down .88 at 178.01 volume 180.6 million shares, above average volume
VIX down .72 at 17.42…
TNX up .31 at 27.66…
TLT down .75 at 106.73...
XLF down .13 at 20.98 volume 64.4 million shares, above average volume

AAPL up 4.43 at 550.50 volume 20.5 million shares, above average volume
FB down .90 at 53.55…volume 74 million shares


Technical Commentary: 
DIA – 0.29%, SPY – 0.49%, QQQ – 0.97%, IWM – 1.46%.

Stocks continued to slide on Monday with the DJIA closing down 41.23, its fifth day down and the S&P 500 sinking 8.73Many stocks finished the day with a break of support or closed at support.  Numerous stocks continued in their bull-flag pattern.

After the closing bell the big news was earnings report on AAPL.  AAPL revenue outlook was weaker than expected with the Apple iPhone sales also coming in weaker than analysts expected…In after hours trading AAPL is down 44.46 or 8.08%.

STX also reported earnings after the close and also disappointed…STX down 3.56 or 6.13% in after hours trading.  ZION disappoints on its earnings report and is down 1.43 or 4.78% in after hours trading.

QIHU had a nice bounce on Monday gaining 5.25 or 6.20%.  The volume was 4.4 million shares.

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 defensiveThe 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.

Monday kicks off a huge week for earnings AAPL, CAT, RCL, STX, X, 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, X, 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 – CAT, RCL, 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 is below 80 and is pointed down.

____________________

Setups
H Breakout:  
Diagonal Breakout:  
Bull Flag: A, BAC, BBRY, BX, CRM, CSIQ, ESI, GLW, IWM, LVS, MFRM, P, SCTY, SFUN, SPLK, SPY, STI, SWKS, UAL, V, YELP, ZION, ADSK, AKAM, AMZN, CTSH, EBAY, ESRX, GILD, GMCR, GOOG, NTAP, PCLN, QCOM, STX, TSLA, TXN, WDC, WYNN, XLNX,
Potential Bullish Divergence: GME,   
Gap Up:  
Gap Down: AAPL, STX, X, ZION
Bear Flag:  
At Support: C, FAS, SPWR, TWTR, YNDX,
C- Pattern:

Moves
New Highs:  
Gap Up: CAT,           
Gap Down: ADBE,  
H Breakout:  
Diagonal Breakout:  
Breakout Test: 
Bounce: TBT, COST, ROST,
MACD Divergence Bounce: 
Bear Flag: 
Support Break: CIEN, GOGO, KKD, CELG, TRIP,

______________________


22 out of 100 NDX stocks closed higher on Monday and one was unchanged.


Leading NDX 100 stocks included: CHTR, FFIV, ILMN, NXPI

Lagging NDX stocks included: YHOO, GOLD, VOD, REGN, PCLN, CELG, TRIP, ALXN, TSLA, EBAY

Leading stocks > +2% on Monday included: QIHU, TSL, GME

Lagging stocks < -2.0% included: GOGO, TWTR, XONE, LNKD, UNG, DDD, Z, YELP, SPLK, KKD, RAX

Stocks to Watch on Tuesday
Holding Above 30 DMA= 33
WDC, ILMN, ADSK, ESRX, MNST, CMCSA, GMCR, DTV, STX, BRCM, AVGO, EQIX, ORLY, AKAM, FFIV,  VRTX, XLNX, CTRX, CSCO, SBAC, SIRI, AMGN, ISRG, MU, MYL, BIIB, GILD, MXIM, TSLA, NXPI, NTAP, GOLD, NFLX

Moving Above 30 DMA = 1
CHTR

Moving Below 30 DMA = 12
ALTR, ALXN, CHKP, EBAY, GOOG, HSIC, MSFT, PCLN, QCOM, SRCL, SYMC, REGN

Staying Below 30 DMA
AAPL, ADBE, AMAT, AMZN, CA, CELG, CERN, CHRW, CTSH, EXPD, FAST, FISV, KLAC, LLTC, NVDA, PCAR, SIAL, SNDK, VOD, WYNN, TXN, FB, CIP, ADP, BIDU, CTXS, GRMN, ADI, KRFT, DISH, EXPE, INTC, INTU, MDLZ, LBTYA, TRIP, YHOO, VIAB, LINTA, TSCO, ATVI, PAYX, ROST, DLTR, BBBY, SPLS, FOXA, MAT, DISCA, WFM, VRSK, COST, SBUX, LMCA

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


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