Back to Support, Take Three...

Eight of nine sectors moved lower on Tuesday…XLE, XLI and XLB were the strongest sectors while XLP was the weakest sector.  Oil futures rose .70 to close at 48.59.

Breadth weakened as decliners led 1,956 to 1,088 on the NYSE and led 1,941 to 707 on the NASDAQ.

Tuesday – weakened, decliners led

Monday – strengthened, advancers led

Friday – weakened, decliners led

Thursday - strengthened, decliners led

Wednesday – weakened, decliners led

SPY down 1.93 at 204.85 on 114.3 million shares, 40% above average volume

VIX up .89 at 15.57

TLT up .22 at 131.36…on 4.4 million shares, 32% below average volume

Technical Commentary:

IWM -1.59%, QQQ -1.25%, DIA -0.96%, SPY -0.93%,

Some reports suggest Tuesday’s selloff was over concerns that the Fed will rates sooner than later. This is the third move to SPY 204 and SPX 2,040 support areas in the past eight trading sessions.

Whatever the actual catalyst volume increased in S&P futures, SPY, DIA, QQQ, IWM, XLB, XLF, XLI, XLK, XLP, XLU, XLV and XLY.  XLP volume was 72% above average and IWM volume was 83% above average.

Consumer staples, XLP, was the weakest sector with KHC, WBA, MDLZ, TSN, STZ, GIS, KMB and CVX leading the sector lower.

Consumer discretionary, XLY, was also among the weakest sectors with AMZN, CMCSA, HD, MD, ORLY, F and TGT selling off on Tuesday.

Earning’s Announcements:

Positive Reactions:  A, AKRX

It is important to be defensive until a price bounce occurs.

Watch for potential bearish trades on the ETFs below last week’s low:

SPY support low = 203.88, next support 203.09

DIA support low = 175.68, next support 174.55

QQQ support low = 104.40, next support 103.66

IWM support low = 109.54, next support 108.13

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:  AMZN, FB, LUK, TSCO, SCI, BG, ZION, PCAR, MUR, FISV, FIS, JEC, NWL, NOC, LMT, GD, MCD, MMM, XOM, TSN, CMG, MMM, JNJ, ULTA, STI, MNST, MDT, WRK, FFIV, ATVI, BSX, CA, EA

Bull Flag Bounces include:  SWN,

Horizontal Breakout Setups include: SWN, DD, FTNT, MRO, AFL, ADBE, AGN, EGN, CTXS, GLPI, WFM, TXN, INCY, REGN,

Horizontal Breakout include: URI, HAL, AEM, NTES, NEM, NVDA,

Support Breakout Setups include: IWM, DIA, XLF, FAS, SVXY, KIM, NUE, HD, KHC,  MJN, SDRL, BAC, MS, NXPI, CBS, UNH, UTX, WFC, AVGO, ESRX, CAT, CMCSA,

Break of Support include: EW, WBA, FLIR, AXP, CL, DFS, WBA, ADP, WMT, 

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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 SPY MFC green line turned down at 35, time to be defensive and ready to turn bearish if price breaks below short-term support.

23 of 100 NDX stocks closed higher on Tuesday.

25 NDX stocks are above their 30 DMA.

NDX Stocks to Watch on Wednesday:

Moving Above 30 DMA = 0

Moving Below 30 DMA = 12

ADSK, BMRN, CMCSA, ESRX, INTU, ISRG, LBTYA, LLTC, PYPL, TSCO, TXN, ULTA

6-month Intermediate Term Market Trend: Neutral

3-day Short Term Market Trend: Down