SPX Holds Support after FOMC Minutes Lead to Volatile Price Swings...

Three of nine sectors moved higher on Wednesday…XLF, XLV and XLK were the strongest sectors while XLP was the weakest sector.  

Breadth strengthened as decliners led 2,017 to 1,047 on the NYSE and advancers led 1,545 to 1,037 on the NASDAQ.

Wednesday – strengthened, mixed

Tuesday – weakened, decliners led

Monday – strengthened, advancers led

Friday – weakened, decliners led

Thursday - strengthened, decliners led

SPY up .06 at 204.91 on 123.4 million shares, 50% above average volume

VIX up .38 at 15.95

TLT down 1.87 at 129.49…on 12.6 million shares, 94% above average volume

Technical Commentary:

IWM +0.52%, QQQ +0.36%, DIA +0.04%, SPY -+0.03%,

SPX rallied from Tuesday’s close until 12 minutes before the release of the FOMC minutes when it started drifting lower.  At 2 pm ET the SPX dropped and sold off 22 points over the next 30 minutes to 2,035 where buyers stepped in and stocks rallied. 

Financials XLF was the strongest sector following the FOMC on comments that the Fed could raise rates in June if the economic data available by next month supported the decision.  The comments seemed to increase the perception that the probability for a June increase was greater.

Eighteen of the top 20 SPX gainers were financial stocks including: CFG, ETFC, HBAN, RF, C, SCHW, KEY, BAC, FITB, ZION, STI, LNC, MS, PRU, MET, JPM, NTRS and PNC.

While money was rotating into financials, money was clearly flowing out of utilities on Wednesday.

Check out the great looking bull flag, horizontal breakout and MACD bullish divergence setups listed below. 

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.

______________________

Strong Stocks: Setups and Moves You Can Use

Bull Flag Setups include:  ATVI, EA, CA, BSX, AMZN, FB, LUK, FISV, JEC, SVXY, WRK, NWL, MNST, MDT, NOC, LMT, GD, CMG, JNJ, MMM, TSN, FFIV, GLPI, AEM, NEM,

Bull Flag Bounces include:  ZION, STI,

Horizontal Breakout Setups include: ETFC, WMB, MRK, SWN, FTNT, AFL, ADBE, AGN, EGN, TXN, CTXS, REGN, DD, MRO, WFM, JPM, NXPI,

Horizontal Breakout include: ZION, XOM, STI, INCY, URI, HAL, NTES, NVDA, SCHW, MS, BAC, C, JPM,

Bullish Divergence Setups include: IWM, DIA, XLF, FAS, UTX, AVGO, CAT, CMCSA, EW, FLIR, AXP, ADP

Break of Support include: KIM, NUE, KHC, MJN, CBS, 

______________________

                                                                                                                                    

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 31, time to be defensive and ready to turn bearish if price breaks below short-term support.

63 of 100 NDX stocks closed higher and one was unchanged on Wednesday.

28 NDX stocks are above their 30 DMA.

NDX Stocks to Watch on Thursday:

Moving Above 30 DMA = 5

BMRN, INTU, LLTC, TXN, ULTA

Moving Below 30 DMA = 2

MDLZ, PCAR 

6-month Intermediate Term Market Trend: Neutral

3-day Short Term Market Trend: Neutral