Friday, January 8, 2016

Sellers Take Control Again Late Friday Send SPX Lower for Third Straight Session...VIX Hits 27...

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All nine sectors moved lower on FridayXLU, XLP and XLK were the strongest sectors while XLF was the weakest sector
                         
Breadth strengthened as decliners led advancers 2.19 to 1 on the NYSE and 2.45 to 1 on the NASDAQ.

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


SPY down 2.12 at 191.92 on 209.8 million shares, 70% above average volume
VIX up 2.02 at 27.01…
TNX down .23 at 21.30…
TLT up .55 at 123.36…on 9.5 million shares, 19% above average volume
XLF down .35 at 22.10…on 67.4 million shares, 51% above average volume

AAPL up .51 at 96.96 on 70.7 million shares, 61% above average volume
FB down .59 at 97.33 on 35.4 million shares, 66% above average volume

Technical Commentary:
QQQ -0.82%, DIA -1.04%, SPY -1.10%, IWM -1.72%.

On Wednesday we highlighted the need to “be prepared to trade to the downside in down trending stocks if support is broken.”  If one did that, Thursday and Friday were actually terrific trading days.

Notwithstanding that the first week of 2016 was a bearish week there was buying in certain stocks.  This occurs because institutions rotate money from losing stocks into stocks that generally have positive business developments.  This becomes apparent through earnings announcements, analysts upgrades and other corporate announcements.  This rotations lifts some stocks higher while the majority move lower.  This week TWX, FLIR, WMT, SE, ED, STZ, RRC, EQT, TMUS, DLTR and VOD were among the winners of this down week.

The short-term trend is down and as traders we should trade with the direction of the stock that we trade, there are some technical evidences that suggest the market may be near support This includes the VIX which we discussed on Thursday, the SPX 78.6% Fib level, the horizontal support levels from September/August and the SPX MFC Green Line at 11 on Friday.

This is only the seventh time in the last two years that the MFC Green Line has closed below 20.  In the prior six times, this has occurred within days of the market pullback bottom including Oct 2014 and Sept, Oct 2015.

Just two stocks in the DJIA, AAPL and MSFT rose on Friday.



Even with Friday’s late selloff, there were NDX leaders which  included VIAB +5.37%, VOD +2.88%, DISCA +2.08%, CERN +1.86%, YHOO +1.56%, MAR +1.34% and EA +1.07%.


YTD:
SPX Leaders:  TWX, FLIR, RRC, EQT, WMT, SE, ED, STZ
SPX Losers: WMB, FCX, AA, FOSL, AN, MRO, APA, CF, ESV, WYNN, APC, THC

NDX Leaders:  TMUS, VOD, DLTR
NDX Losers: MXIM, JD, ILMN, NTAP, SWKS, INCY, ENDP, TSAL, VRTX

DJI Leaders:  WMT,
DJI Losers: JPM, BA, GS, CSCO, CVX, GE. INTC, AXP, DD


Remember:  “It’s a market of stocks, not just a stock market.”

Trade with the trend of the chart you are trading and continue to move your profit protection stops.  Continue to follow your rules.

The SPX MFC green line is pointed down at 11. 

Short-term Chart Targets:
SPY =...195.85
QQQ = 106.29…
IWM = 106.49…
                   
Support Levels
SPY = 191.08…
QQQ = 104.81, 102.08…
IWM = 103.50

__________________

Setups
Horizontal Breakout: FINL, RRC, SE
Diagonal Breakout: DPS, NFLX, KR, WUBA, DRI, TERP, RUN,
Bull Flag: SONC, , STX, KMB, PLAY, DLTR, CCL, CNC, FIVE, FSLR, MCD, SCTY, SOHU, SEDG, W, SPWR,
Potential Bullish Divergence: AAPL, MNST, CRM, SONC, QRVO, TPX, YELP, ZION, LNKD
At Support: CSIQ, SLCA, JASO, STI, SBUX

Moves
New Highs:
H Breakout: EQT, ED
MACD Divergence Bounce: CRUS

Support Break: YNDX, AIG, CAH, MYL, FAS, NKE, V

______________________

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

7 NDX stocks are above their 30 DMA.

NDX Stocks to Watch on Monday:
Moving Above 30 DMA = 1
VOD

Moving Below 30 DMA = 2
SRCL, WFM

6-month Intermediate Term Market Trend: Neutral
3-day Short Term Market Trend: Down

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