Perfect Storm...Resistance Breakout to the Upside...QQQ +3%, SPY, DIA, IWM +2%...Rally Broad and Big...

Eight of nine sectors moved higher on Tuesday…XLF, XLK and XLY were the strongest sectors while XLU was the weakest sector.  Oil futures flat +.02 to close at 33.89. 

                         

Breadth strengthened as advancers led decliners 4.60 to 1 on the NYSE and 2.99 to 1 on the NASDAQ.

Tuesday – strengthened, advancers led

Monday – weakened, mixed

Friday – mixed, advancers led

Thursday - strengthened, advancers led

Wednesday – strengthened, advancers led

SPY up 4.55 at 198.11 on 141.7 million shares, 3% below average volume

VIX down 2.85 at 17.70…

TNX up .94 at 18.34…

TLT down 2.55 at 128.43…on 13.7 million shares, 34% above average volume

XLF up .71 at 21.80…on 81.4 million shares, 8% above average volume

AAPL up 3.84 at 100.53 on 50.4 million shares, 4% above average volume

FB up 2.90 at 109.82 on 26.8 million shares, 38% below average volume

Technical Commentary:

QQQ +3.21%SPY +2.35%, DIA +2.16%, IWM +2.15%.

For six trading days SPY has been churning at resistance, breaking out twice but unable to pull away from resistance.  On Tuesday as that changed.  Buyers bought and bought big on Tuesday driving SPY, DIA, QQQ and IWM through resistance.  Over 450 SPX stocks advanced, 97 of the NDX 100 moved higher and all but one of the Dow 30 rose.

The NDX +132.49 was led by point gainers in MSFT, AMZN, GOOG, FB, AMGN, INTC, GILD, AAPL, CSCO, CMCSA, BIIB, REGN, QCOM, ALXN, BIDU, CELG, PCLN, ADBE, SBUX, MDLZ, ORLY, TXN, ILMN, AVGO and FOXA.

Twenty-nine of 30 Dow stocks rose on Tuesday led by gains in JPM, AAPL, GS, DD, MSFT, CVX, V, MRK, INTC, IBM and GE.

Last Thursday SPY broke out of double bottom resistance at 194.58 on Feb 1 with a six-week chart target of 208.07.  Monday’s pullback was a test that we expect to occur about 70% of the time.  That test was successful and old resistance became a new level of buying or new support.  208 which on Monday may have looked like a pipe dream to some now appears achievable.

Trade what you see, not…

WDAY +11.29, +18.68% on positive earnings reaction.

JUNO +4.75, +13.51% on positive earnings reaction.

HTZ +1.04, +12.24% on positive earnings reaction.

KATE +2.17, +10.95% on positive earnings reaction.

Stocks below support should generally be traded bearishly until a reversal pattern forms.

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Strong Stocks: Setups and Moves You Can Use

Bull Flag Setups include:  XOM, EBAY, CTRP, MYL, HD, PG, DLTR, ATVI, FISV, KHC, ORLY, XLP, XLU, MAT,

Bull Flag Bounces include: SPY, DIA, XLI, XLV, DIS, EXPE, LBTYA, PCLN, CSCO, ADP, CA, SBUX, NTAP, UNH, FB, ILMN, IBM, NKE, TRV, ORLY, HAS

Horizontal Breakout Setups include: XLV, TRIP, STX, CSCO, LBTYA, EXPE, ADP, CA, NTAP, UNH, IBM, NKE, SWKS, AVGO, ULTA, MAR, CHTR, PCAR, CHKP, MXIM, MMM, MAT

Horizontal Breakouts include: SPY, DIA, QQQ, IWM, XLF, XLI, XLK, XLY, AMZN, NXPI, LRCX, BA, ORLY, DIS, PCLN, SBUX, FB, ILMN, TRV, WFM, XLB, NCLH, FAST, TXN, AXP, DD, INTC, ADI, CTSH, NFLX, AAL, HAS

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Short-term Movers:

SPX gainers:  CHK, NFX, CNX, QRVO, RRC, APC,OKE, MRO, CF, SIG, PWR, FSLR, AMG, CRM, MOS, MHK, HBI, TSO, SHW, MS, WY, ETFC, MPC, TFT, SCHW, NRG, COG, LM, PRU, HCN, WRK, VFC, MET, BAC, LNC, UNM, C, VTR, FTR, HCP, AMT, VMC, HP, FCX, IP, PXD, VLO, FITB, CBS, PFG, MCHP, DD, DLPH, IR, BBY, GGP, NAVI, AA, HAR, GS, RAY, HBAN, CPGX, DOW, YUM, TYC, MUR, COH, CTL, BWA, LEN, WYN, PLD, RIG, PSX, PVH, DVA, ALLE, WMB, MLM, HPQ, HST, VRSN, IVZ, MHFI, ECL, HES, BEN, EMN, FDX, AES, GT, JCI, EQIX, SNI,KMX, UA 

SPX losers:  SWN, POM, EQR, BF/B, EOG, ICE, PPL, SO, ED, NEE

NDX gainers:  BMRN, SWKS, BIDU, SNDK, PYPL, NFLX, VRSK, ADSK, CTXS, LRCX, TRIP, NXPI, STX, AVGO, WDC, LMCK, NCLH, LMCA, YHOO, TMUS, HC, EA,ADBE, ILMN, LVNTA, ADI, AAPL, ALXN, REGN, DISH, ULTA, CHTR, MU

NDX losers:  ENDP, WDC, MYL

YTD:

SPX Leaders:  KORS, NEM, FOSL, M, SE, CTL, TSN, WYNN, KMI, COH (220, +41)

SPX Losers: ESV, DVN, CHK, MRO, WMB, MPC, URI, RIG, COP, RCL

NDX Leaders:  MAT, FAST, PCAR, KHC, PYPL, HSIC, FISV, DLTR, ISRG, ORLY   (30, +8)

NDX Losers:  ENDP, INCY, VRTX, REGN, WDC, TRIP, TSLA, MU, ALXN, ESRX

DJI Leaders:  VZ, WMT, MMM, JNJ, XOM, UNH, PG, KO, CAT, NKE (11, +2)

DJI Losers: AXP, BA, GS, INTC, JPM, DIS, PFE, DD, MSFT, HD

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 up at 91. 

97 of 100 NDX stocks closed higher on Wednesday.

94 NDX stocks are above their 30 DMA.

NDX Stocks to Watch on Tuesday:

Moving Above 30 DMA = 21

ALXN, AMGN, ATVI, BIIB, CELG, CTSH, DISCA, EBAY, GILD, GOOG, ILMN, LVNTA, MSFT, MU, TMUS, TRIP, ULTA, VOD, VRTX, WDC, XLNX

Moving Below 30 DMA = 0

6-month Intermediate Term Market Trend: Neutral

3-day Short Term Market Trend: Up