Divergence Bounce, Low Volume Pause, High Volume Bounce...Stocks Surge Led by Technology, Financials, Healthcare...

All nine sectors moved higher on Tuesday…XLK, XLF and XLV were the strongest sectors while XLE was the weakest sector.  Oil futures formed a bullish engulfing candle following Friday’s hammer candle while moving .99 higher to close at 49.10.

Breadth strengthened as advancers led 2,377 to 702 on the NYSE and led 2,023 to 565 on the NASDAQ.

Tuesday – strengthened, advancers led

Monday – weakened, advancers led on NASDAQ

Friday – strengthened, advancers led

Thursday - weakened, decliners led

Wednesday – strengthened, mixed

SPY up 2.66 at 207.87 on 93.5 million shares, 14% above average volume

VIX down 1.40 at 14.42

TLT down .58 at 129.86…on 5.9 million shares, 12% below average volume

Technical Commentary:

IWM +2.06%, QQQ +2.00%, SPY +1.30%, DIA +1.19%,

SPY, IWM, DIA and QQQ had MACD bullish divergence bounce on Friday, low volume pause day on Monday and a high volume bounce continuation move on Tuesday.  Just as we stated in Monday’s post, “Modest pullbacks on light volume are generally bullish,” turned to be exactly right.

SPY, QQQ and IWM closed above their 30 DMA today.  QQQ and IWM broke through horizontal resistance and SPY is a horizontal resistance breakout setup. 

XLF, the financial sector was the second leading sector on Tuesday as MCO, NDAQ, SCHW, ETFC, SLM LM, IVZ, TROW, ICE, BEN, PFG, AMP, UNM, KEY, MS, STT, FII, BLK, AXP, JPM, C, ZION, STI, BAC and WFC moved higher.

The price bounce has occurred and it is time to be bullish.

Earning’s Announcements:

Positive Reactions:  CTRP, NDSN, TOL

Negative Reactions: BBY 

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:  LUK, JEC, TSN, GLPI, ALB, CLR, PPC, SYY, GD, JNJ, CNP, OKE

Bull Flag Bounces include:  ATVI, EA, CA, BSX, FB, FISV, MNST, NOC, LMT, A, CL, HLF, STWD, WM, YELP, AMZN, EGN, JNJ, VMW, DLR, RSPP, WRK, CLB, CRZO

Horizontal Breakout Setups include: XLB, ATVI, EA, CA, BSX, MNST, NOC, A, STWD, EGN, JNJ, VMW, NWL, CMG, VTR, XLB, FMC, WWAV, XEC, AAPL, ADI, TMUS, XLE, ZION, STI, WMB, MRK, SWN, FTNT, AFL, AGN, MRO, JPM, BAC, C, MS, CMCSA, MXIM, AVGO, MU, TXN, FLIR, SWN, AXP

Horizontal Breakout include: SVXY, QQQ, IWM, XLK, FAS, ETFC, NTES, XYL, DD, AKAM, BMRN, MAT, ADBE, CTXS, REGN, NXPI, NFLX, SWKS, WDC, LRCX, QCOM, WFM

Bullish Divergence Bounce include: DIA, XLP, XLV, XLI, XLF, PCAR, ORCL, UTX, EW, FLIR, NUE, STLD, ADP

Bullish Divergence Setups include: SCHN, FCX

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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 up at 33, bullish.

98 of 100 NDX stocks closed higher on Tuesday.

56 NDX stocks are above their 30 DMA.

NDX Stocks to Watch on Wednesday:

Moving Above 30 DMA = 18

ADI, BIIB, BMRN, CHKP, CTRP, ESRX, EXPE, GOOG, HSIC, INTC, LRCX, MAT, MDLZ, PAYX, SIRI, VIAB, VRSK, YHOO

Moving Below 30 DMA = 0                                                                        

6-month Intermediate Term Market Trend: Neutral

3-day Short Term Market Trend: Up