Futures Lower as Chinese Manufacturing PMI Slips to 49.4...SPY, DIA, QQQ Reverse Monday's Bounce, Stay Above Friday's Support...

All nine sectors moved lower on Tuesday …XLU, XLP and XLV were the strongest sectors while XLE was again the weakest sector.  Oil futures fell 1.01 to close at 43.88.

Breadth weakened as decliners led 2,312 to 757 on the NYSE and 1,897 to 693 on the NASDAQ.

Tuesday – weakened, decliners led

Monday – strengthened, advancers led

Friday – strengthened, decliners led

Thursday - weakened, decliners led

Wednesday – weakened, advancers led

SPY down 1.81 at 206.16 on 106.3 million shares, 32% above average volume

VIX up .92 at 15.60

TLT up 1.61 at 129.43…on 10.7 million shares, 60% above average volume

Technical Commentary:

DIA -0.78%, SPY -0.87%, QQQ -0.93%, IWM -1.64%,

Tuesday is why it is important to become defensive when the market flattens out.

China reported April manufacturing PMI at 49.4 down from 49.7 in March and the UK reported its manufacturing PMI at 49.2 down from 50.7 in March. 

Futures sold off over night and US stocks opened lower and sold until mid-day when buyers stepped and formed a hammer.  SPY, DIA and QQQ had higher lows than Friday.  IWM did make a lower low than Friday.  SPY, DIA and IWM are still in bull flag pattern, even considering Tuesday’s support test.

Watch for potential bearish trades on these ETFs below support:

SPY support low = 205.03

DIA support low = 176.29

QQQ support low = 104.88

IWM support low = 111.72

Earning’s Announcements:

Positive Reactions:  FMC, MNK, FIS, VMC, OI, PFE, CVS, EXR, HCN, MYL

Negative Reactions:  PBI, HRS, FTR, EL, VLO, APC, SBAC

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, SVXY, FB, FAS, XLY, CTXS, PCAR, XLB, XLE, XLF, XLI, XLV, UA, CSX, DISH, ESRX, NXPI, VIAB, VOD, AKS, SCTY, DFS, AXP, PXD, PNR, GM, BSX, NOV, FCX, NEM, MMM, ISRG, SKX, COH, EQT, HAS, SWN, HOG, X, NUE, BHI

Bull Flag Bounces include: JNJ, MDLZ, TSCO, ULTA

Horizontal Breakout Setups include: XLY, MDLZ, CHTR, STLD, TSN

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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 is pointed down at 63, time to be defensive.

14 of 100 NDX stocks closed higher on Tuesday.

29 NDX stocks are above their 30 DMA.

NDX Stocks to Watch on Wednesday:

Moving Above 30 DMA = 0

Moving Below 30 DMA = 13

ADBE, AMGN, BMRN, CELG, CMCSA, FAST, HSIC, LBTYA, NVDA, ROST, SBAC, TXN, YHOO

6-month Intermediate Term Market Trend: Neutral

3-day Short Term Market Trend: Neutral