Oil Rally Continues...Stock Rally Stalls...AA Rises on Monday, Falls in After-hours on EPS Beat, Revenue Shortfall...

Three of nine sectors moved higher on Monday …XLB, XLF and XLI were the strongest sectors while XLV was again the weakest sector.  Oil futures rose .67 to close at 40.33. 

Breadth weakened as advancers led decliners 1.46 to 1 on the NYSE and decliners led 1.07 to 1 on the NASDAQ.

Monday – weakened, advancers led on NYSE

Friday – strengthened, advancers led

Thursday - weakened, decliners led

Wednesday – strengthened, advancers led

Tuesday – weakened, decliners led

SPY down .48 at 204.02 on 81.9 million shares, 14% below average volume

VIX up .90 at 16.26…

TLT down .17 at 131.84…on 4.8 million shares, 33% below average volume

Technical Commentary:

DIA -0.13%, SPY -0.23%, IWM -0.31%, QQQ -0.37%.

SPY, DIA, QQQ and IWM rally stalls on lighter volume Monday after being higher after the oen.  Each ETF continues in a muti-week uptrend, a bull flag pattern and a bull flag setup for potential entry.

SPY two-week support is 202.40.  Last week SPY pulled back -1.96% to its weekly low on Thursday of 203.09 before buyers appeared.

STX +1.75, +5.27% following analyst coverage initiation with $36 price target.

Earnings season unofficially began today with AA earnings after the close.  EPS was 7 cents vs. 3 cents estimates but revenues fell short.  AA was up 37 cents on Monday but was down 37 cents in after-hours back to Friday’s close.  Watch for Tuesday’s open to see how traders view AA results for a full day of trading.

Monday – AA

Tuesday – FAST, CSX

Wednesday – JPM

Thursday – BLK, DAL, BAC, WFC

Friday- C, RAI, RF, SCHW

The broad market one year trend is sideways and the short-term trend is near resistance.  Risk can be balanced with bear call spreads above resistance, VXX short put spreads below support, TLT positions and bearish trades in stocks that are already below support in a down trend.

Technical analysis based trades should be closed before earnings.

Trade what you see, not…

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:  SPY, DIA, QQQ, IWM, XLK, XLP, XLU, XLV, XLY, SVXY, CCL, RCL, BABA, AAPL, CAT, HD, IBM, MSFT, PFE, UNH, ALXN, AMAT, AMGN, ATVI, BIIB, BMRN, CMCSA, CTSH, CTXS, EBAY, ILMN, INCY, LRCX, NCLH, NVDA, REGN, TMUS, TSLA, TXN, VRTX

Bull Flag Bounces include: X,

Horizontal Breakout Setups include: CTRP, JD, AMZN, YHOO, XLE, CVX, JNJ, KO, MMM, V, ESRX, MXIM, NXPI, SBUX, SWKS

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 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 83. 

Prepare to become defensive if the MFC green line drops below 80.

29 of 100 NDX stocks closed higher on Monday.

64 NDX stocks are above their 30 DMA.

NDX Stocks to Watch on Tuesday:

Moving Above 30 DMA = 1

STX

Moving Below 30 DMA = 5

BMRN, MNST, MYL, NTES, VRSK

6-month Intermediate Term Market Trend: Neutral

3-day Short Term Market Trend: Neutral