Wednesday, October 8, 2014

Stocks Rally After FOMC Minutes...Double Bottoms, MACD Divergences, Bullish Candles...They're All There...

All nine sectors moved higher on Wednesday…XLV, XLU, and XLF were the strongest sectors while XLE was the weakest. 

Breadth strengthened…advancers led decliners…4.07 to 1 on the NYSE and 2.47 to 1 on the NASDAQ.

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


SPY up 3.35 at 196.61 on 186.2 million shares, above average volume
VIX down 2.09 at 15.11…
TNX down .20 at 23.30…
TLT up .03 at 119.39...
XLF up .43 at 23.25 on 58.7 million shares, above average volume

AAPL up 2.00 at 100.75 on 57.3 million shares, below average volume
FB up 1.17 at 77.46…on 32.9 million shares

Technical Commentary:
DIA + 1.61%, SPY + 1.75%, IWM + 1.84%, QQQ + 1.98%.
After an early selloff buyers sent the SPX to its largest daily gain of 2014 following the release of the FOMC minutes.  On Tuesday the SPY, QQQ, DIA and IWM formed potential bullish divergences which suggested the downtrend was weakening but the charts didn’t indicate how big the move turned out to be.  Wednesday’s bounce turned into a MACD bullish divergence bounce.
                     (click chart to enlarge)

The VIX -2.09, 15.11 once again dropped from the  17+ level as stocks took off.

Financial stocks, XLF, soared this afternoon notwithstanding flat bonds and interest rates.

The Euro which had fallen 1,400 pips between early May and early October has gained 200 pips this week.  A falling Euro and rising dollar has led to lower gold and oil prices over the same five months.  A stronger dollar has led to rising bonds and falling interest rates.

COST +3.46, +2.76% gapped up on a positive earnings reaction.

AA +0.37, +2.30% in after hours following better than expected earnings.  Unofficially Q3 earnings season is underway.

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...


Earnings this week:  AA, COST, YUM

Q3 Earnings Reactions
Positive Reactions – COST, 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 – AZO,

Reversal of Initial Reaction – KKD, BBRY, MU,

The SPY Market Forecast green line turned up and is at 32.

___________________

Setups
Horizontal Breakout: CELG, MNST, STX, TSLA, C, CRM, JD, NTES, VRSN, YELP,
Diagonal Breakout: AAPL, AVGO, BRCM, INTC, NTAP, SNDK, WDC, XLNX, AMBA, BBRY, CSIQ, FEYE, GME, HPQ, SFUN, SSYS, SWI, SWKS, UA, V, X, YY, Z, ZU
Bull Flag: ADSK, FB, MU, YHOO, BAC, DAL, GPRO, MBLY, PANW, SPLK,
Potential Bullish Divergence: ESRX, MAR, JDSU, MS, SCHW, ETFC, SCTY, TPX, DAL, UAL,  
Gap Up: AA,
C- Pattern: EXPE,

Moves
New Highs: XLP, GMCR, TLT, TWTR,
H Breakout: XLU, CMCSA, NFLX,
D Breakout: GILD, MSFT,
Bull Flag Bounce: EBAY, ROST,
MACD Divergence Bounce: SPY, QQQ, DIA, IWM, XLE, XLF, XLI, XLK, XLV, XLY, ADBE, AKAM, AMZN, FFIV, GRMN, ILMN, PCLN, QCOM, SBUX, STX, TRIP, CTRP, FAS, GOGO, IBM, KKD, STI, UBNT,  
Gap Up: COST,
Support Break: AAL,   

______________________

99 out of 100 NDX stocks closed higher on Wednesday.


Leading NDX 100 stocks included: ALXN, VRTX, GILD, STX, SYMC, PCAR, MNST, ILMN, ADI, CMCSA, LLTC, ADBE

Lagging NDX stocks included: TSCO

Leading stocks > +2% on Tuesday included: FAS, AMBA, BBY, JD, YY, SWKS, CTRP, SSYS, TWTR, SCTY, UBNT, AA, ESI, ANR, JASO, SUNE, TSL, YOKU

Lagging stocks < -2.0% included: JCP, GPRO, UAL, AAL, VJET, WLT, UNG

Stocks to Watch on Thursday
Holding Above 30 DMA= 15
COST, MNST, PAYX, DTV, VRTX, ADSK, SIAL, BBBY, YHOO, ALXN, DLTR, ISRG, ADP, GMCR, MYL

Moving Above 30 DMA = 15
AAPL, AMGN, CELG CERN, CTSH, EBAY, FAST, FB, GILD, LBTYA, MSFT, NFLX, REGN, ROST, SRCL                                                  

Moving Below 30 DMA = 0
                                                                                             
Staying Below 30 DMA
CSCO, EXPE, INTU, MU, SBAC, WFM, CHRW, DISH, FISV, AVGO, ALTR, BRCM, CTXS, INTC, KLAC, NTAP, BIDU,MAR, NXPI,SNDK, TXN, VOD, XLNX, SPLS, AKAM, BIIB, CHKP,GOOG, QCOM, CHTR, CMCSA, FFIV, LLTC, AMAT, CA, ESRX, EXPD, LMCA, LMCK, MXIM, SYMC, TRIP, VIAB, VRSK, EQIX, ILMN, MDLZ, NVDA, ORLY, SIRI, CTRX, KRFT, ADBE, AMZN, ATVI, FOXA, STX, TSLA, VIP, HSIC, SBUX, TSCO, DISCA, MAT, ADI, WDC, GRMN, PCLN, PCAR, WYNN

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

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