One of nine sectors
moved higher on Wednesday… XLU moved higher while all other sectors were
lower with XLE and XLB being the weakest.
Breadth weakened…decliners
led advancers…3.04 to 1 on the NYSE and 3.55 to 1 on the
NASDAQ.
Wednesday – weakened, decliners led
Tuesday – weakened, decliners
led
Monday – weakened,
decliners led
Friday – strengthened,
advancers led
Thursday – weakened,
decliners led
SPY down 2.39 at 194.63 on 177.5 million shares, double average volume
VIX up .40 at 16.71…
TNX down 1.05 at 24.03…
TLT up 2.04 at 118.31...
XLF down .28 at 22.89 on 51.2 million shares
AAPL down 1.57 at 98.18 on 51.3 million shares, below average volume
FB down 2.48 at 76.56…on 54.9 million shares, above average volume
Technical Commentary:
SPY – 1.23%,
DIA – 1.25%, IWM –
1.42%, QQQ – 1.60%.
All four major market
indexes were down between 1.3% and 1.6% on
Wednesday. On Tuesday we indicated: Be on alert for a bearish shift if
SPX/SPY break short-term support.
Today was the biggest
one day drop in the past four days. The
indexes haven’t dropped this much in a single day since…hmmm…last Thursday.
In fact, when the last
four days are taken as a whole the SPX
is down -1%, the Dow
is -.83%, and the NDX is -.54%. Yes,
the RUT, since last Thursday’s close, is down -2.24% in large part due to its -1.45% drop on Tuesday.
All this selloff
inspired one financial writer to observe that it’s anyone’s guess what the market
will do in the final quarter of the year, but almost all agree that it will be "bumpy." Bumpy? Bumpy?
Bumpy?
Has anyone looked at a
daily chart of the bull market since March of 2009?
(click image to enlarge)
Chart Signals observes chart patterns. Is it actually helpful to have financial
observers make astute observations like "bumpy" about future market
performance?
Chart Signals finds comedy in the fact
that someone would actually spend the time to write such a description. It seems like someone observing that water is
wet and thinking they are telling their readers something insightful.
Wednesday’s market drop
is attributed to tensions between Russia and Ukraine, in the Middle East, Hong
Kong and Ebola concerns.
Over the past three
months the SPX is -1.3%,
Dow -.9%, NDX +2.2% and the RUT -10%. YTD the SPX is +6.2%, Dow +2.2%,
NDX +11.8% and the RUT
-5.1%.
Earning season unofficially begins next week on Oct 8 when AA releases earnings after the close. Forecasts on SPX companies are for revenue growth in the vicinity of 3.5% and earnings growth
around 7%.
Wednesday provided both
bear flag and break of support entry opportunities. Trade with the trend of the chart you are
trading and continue to move
your profit protection stops. Continue to follow your rules.
Short-term Chart Targets:
SPY = 198.98, 200.65, 201.90...
QQQ = 99.75, 100.56…
IWM = 109.8, 111.27, 112.46...
Support Levels
SPY = 194.35, 193.03, 190.28...
QQQ = 96.94, 96.17, 95.06…
IWM = 107.43,
106.74...
Sept Earnings Reactions
Positive Reactions – BBBY,
BBRY, MU, NKE, PAYX, LULU, PANW, ULTA, MFRM, SPLK,
More than 10% - NKE, ULTA, LULU, PANW,
MFRM,
Negative Reactions –
AZO, ADBE, KKD, CIEN,
More than -10% -
Reversal in progress –
Reversal of Initial
Reaction – KKD,
The SPY Market Forecast green line is at 32.
This is a
bearish reading.
____________________
Setups
Horizontal Breakout: RAX,
TLT,
Diagonal Breakout: PANW,
SPLK, GILD,
Bull Flag: AMBA, GPRO, NKE, EBAY, FB, MU,
Potential Bullish
Divergence: CTRP, Z, STX, WDC,
Bear Flag: CRM, SFUN
At Support: BX, BBY, C, CSIQ, DAL, HPQ, IWM, MS, SPWR, STI, SWKS, TPX,
UA, YELP, ZION, ZU, AVGO, GMCR, GOOGL, ILMN, NFLX, SNDK, XLNX,
Moves
Breakout Test: MBLY,
Bounce: JDSU, RAX, ADSK,
Bear Flag: AA, AIG, EMC, FAS, IBM, JCP, SCSS, ADBE, AKAM, CMCSA, GRMN,
SBUX, STX,
Support Break: SPY, ATI, GOGO, JASO, LNKD, RCL, SCTY, SSYS, SWI, TSL,
UBNT, VRSN, X, YY, NTAP, PCLN, TXN,
______________________
Only 4 out of 100 NDX
stocks closed higher on Wednesday.
Leading NDX 100 stocks included: GRMN, DTV, ADSK, ALZN
Lagging NDX stocks included: ADP, VRTX, VIP, DISCA, STX, NTAP, NXPI, CTXS,
EXPE, ILMN
Leading stocks > +2% on Wednesday
included: RAX, JDSU,
ANGI
Lagging stocks < -2.0% included:
JCP, SWKS, KNDI, TSL, QIHU, SCTY, X,
LOCO, FEYE, AMBA, RCL, CSIQ, GOGO, WLT, XONE, GTAT, DDD, VJET
Stocks to Watch on Thursday
Holding Above 30 DMA= 17
COST, AMGN,
MNST, ROST, PAYX, AVGO, DTV, VRTX, INTU, ADSK, REGN, SIAL, BBBY, CSCO, MU, YHOO, EBAY
Moving Above 30 DMA =
1
ALXN
Moving Below 30 DMA = 13
ALTR, BRCM, CELG, CERN, CTXS, DLTR,
EXPE, FB, GILD, INTC, KLAC, MSFT, NTAP
Staying Below 30 DMA
BIDU, MAR,
NXPI, SNDK, TXN, VOD, XLNX, AAPL, GMCR, LBTYA, SBAC,
SPLS, ADP, AKAM, BIIB, CHKP, FAST, FISV, GOOG, QCOM, CHTR, CMCSA, FFIV, LLTC, WFM,
AMAT, CA, CHRW, ESRX, EXPD, ISRG, LMCA, MXIM, MYL, SYMC, TRIP, VIAB, VRSK,
DISH, EQIX, ILMN, MDLZ, NVDA, ORLY, SIRI, CTRX, KRFT, ADBE, AMZN, ATVI, FOXA,
LINTA, NFLX, TSLA, VIP, HSIC, SBUX, SRCL, TSCO, DISCA, MAT, ADI, WDC, GRMN, PCLN,
PCAR, CTSH, WYNN
Sixteen Week
Intermediate Term Market Trend: Up
3-Day Short Term Market
Trend: Down
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