Wednesday, February 19, 2014

SPY Touches High Before Stocks Pull Back Follow Fed and Construction Data...FB Rises to New High and Falls After-hours on WhatsApp Deal...TSLA Gaps to Record Following Strong EPS...

Eight out of nine sectors moved lower on Wednesday…XLE, XLP and XLK were the strongest sectors…while XLF was the weakest sector.  

Breadth weakened as decliners led advancers 1.80 to 1 on the NYSE and 2.55 to 1 on the NASDAQ.

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


SPY down 1.22 at 183.02 volume 124.8 million shares
VIX up 1.62 at 15.49…
TNX up .23 at 27.34…
TLT down .45 at 106.37...
XLF down .30 volume 64.1 million shares

AAPL down 8.62 at 537.37 volume 11.1 million shares
FB up .76 at 68.06…volume 56.3 million shares


Technical Commentary: 
IWM – 1.02%, QQQ – 0.69%, SPY – 0.66%, DIA – 0.55%.

SPY touched its Jan 15 high (resistance) before profit-takers pushed back the broad index ETF.  Stocks fell on Wednesday on increased but average volume after FOMC minutes indicated a lack of consensus on when short-term interest rates may begin to riseA larger than expected drop in home construction in January was the latest economic release that failed to meet estimates due to harsh weather.

GRMN +4.51, +9.56% gained after a positive earnings reaction Wednesday morning. 

GOGO +0.56, +2.80% rose after an analyst upgrade to overweight and a price target of $26.  FNMA +0.28, +8.97% following news of Lehman settlement with Freddie Mac FMCC which had a similar rise following the news.

Short-term traders may use the pull back as the place to raise profit protection stops below Wednesday’s bearish candle.  The intermediate-term trend is still up

FB after rising 76 cents on Wednesday as the market pulled back, dropped -1.82, -2.67% in after-hours after reporting it would acquire WhatsApp in a $16+ billion stock and cash deal.  WhatsApp is a smartphone messaging service with more than 400 million monthly users.

TSLA +24.45, +12.63% gained after reporting better than expected fourth-quarter results.  TSLA on an adjusted basis earned 33 cents vs. 21 cents estimate.

Trade with the trend of the chart you are trading and move your protective stops.  Be mindful of reversal patterns like double bottoms and MACD divergences.  Continue to follow your rules.


Short-term up trend Chart Targets:
SPY = 184.10, 187.99…
QQQ = 90.43, 92.25, 94.26
IWM = 115.39, 117.37…

Support Levels
SPY = 181.85, 180.29 179.04
QQQ = 89.00, 87.74, 86.97
IWM = 113.65, 111.21

Q4 earnings season
The majority of earnings season is done, however there are still several companies including ADSK, CRM, DISH, DTV, ESRX, GRMN, GRPN, MCP, MNST, PCLN, ROST, SCTY, SPLK, TSLA, WLT and YNDX that will report over the next several days…

Q4 Earnings Reactions
Positive Reactions – GRMN, KRFT, AMAT, NVDA, SPWR, TRIP, REGN, CBOE, MCO, ATVI, AKAM, EXPE, GMCR, NXPI, ONNN, ORLY, SCSS, SWI, TWX, DIS, YELP, AGNC, KORS, KEYW, IDXX, XYL, YUM, NOV, SPG, TSN, ZNGA, ALXN, BRCM, BX, CMG, GOOG, JDSU, MTW, PHM, RYL, VIAB, V, BA, DOW, FB, LVS, QCOM, VLO, AKS, AAL, CHKP, EA, F, ILMN, LXK, 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 – KO, A, GNC, WTW, VFC, WFM, ANGI, CSCO, DISCA, NTAP, RAX, CI, LNKD, VRSN, ADP, CTSH, HUM, MDC, P, TSO, TWTR, ADM, BWLD, CERN, CHRW, GILD, CVX, MA, MAT, PCAR, AMZN, MMM, CELG, CL, XOM, ESI, HOG, OSTK, POT, SHW, WHR, BA, CTXS, EMC, TSCO, CRUS, GLW, DD, F, VMW, YHOO, AAPL, STX, ZION, 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 (72)

Reversal of Initial Reaction – VRSN, CSCO, ADP, CTSH, HUM, P, TSO, ADM, CERN, GILD, PCAR, MMM, CELG, HOG, POT, SHW, EMC, GLW, DD, VMW, YHOO, ZION, HON, SWK, ALTR, ISRG, KLAC, LMT, HAL, FAST, FDO, AA (32, 45%)


The Market Forecast Green Line is above 80.

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Setups
H Breakout: SFUN, SOHU, MNST,
Diagonal Breakout:
Bull Flag: GLW, JDSU, RCL, SWKS, CELG,
Potential Bullish Divergence: 
Gap Up: TSLA
Gap Down
Bear Flag: 
At Support: BAC, GRPN, MS, UAL, X, AMZN,
C- Pattern:

Moves
New Highs: TRIP, XLNX,
Gap Up: UNG, GRMN,
Gap Down: X,
H Breakout:  
Diagonal Breakout:  
Breakout Test
Bounce: ANR, LNKD, TBT,   
MACD Divergence Bounce:  
Bear Flag: 
Support Break: DRYS, MFRM, CMCSA,  

______________________


27 out of 100 NDX stocks closed higher and two were unchanged on Wednesday.

Leading NDX 100 stocks included: GRMN, MYL, ALTR, EXPE, MNST, NVDA, WFM, FB, SBAC

Lagging NDX stocks included: TSLA, CMCSA, REGN, FFIV, PCLN, GMCR, NFLX, BIIB, SIAL

Leading stocks > +2% on Wednesday included: UNG, GOGO, ANR, LNKD

Lagging stocks < -2.0% included: SCTY, X, DRYS, BBRY, TWTR, ANGI, XNE, YNDX, FAS, CSIQ, Z

Stocks to Watch on Thursday
Holding Above 30 DMA= 69
ILMN, ESRX, EQIX, FFIV, SBAC, ISRG, MU, BIIB, MXIM, TSLA, NXPI, NFLX, ALTR, ALXN, REGN, GOOG, WYNN, FB, GMCR, ADBE, ORLY, DISH, EBAY, ADSK, AKAM, AVGO, BRCM, DTV, PCAR, VRTX, AMGN, ATVI, CERN, EXPE, GILD, MNST, MSFT, MYL, NVDA, PCLN, QCOM, SIAL, SNDK, TRIP, MAR, XLNX, ADI, AAPL, AMAT, CHKP, COST, KLAC, TXN, CTRX, CTSH, GRMN, HSIC, LINTA, LLTC, VIAB, KRFT, BIDU, CELG, VRSK, MDLZ, LMCA, FOXA, FISV, LBTYA

Moving Above 30 DMA = 1
DISCA

Moving Below 30 DMA = 4
CA, CMCSA, CSCO, WDC

Staying Below 30 DMA
SBUX, SRCL, CHTR, NTAP, WFM, CHRW, AMZN, SYMC, SIRI, STX, EXPD, FAST, VIP, VOD, ADP, CTXS, INTC, INTU, YHOO, TSCO, PAYX, ROST, DLTR, BBBY, SPLS, MAT

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

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