Brexit Selling Day 2...SPX, SPY Finds Buyers Near Friday's Support Break Price Target..Futures Gain After-hours...

Eight of nine sectors moved lower on Monday …XLU, XLP and XLV were the strongest sectors while XLB was the weakest sector.  Oil futures fell -.96 to close at 46.61.

Breadth strengthened slightly as decliners led 2,495 to 584 on the NYSE and led 2,251 to 379 on the NASDAQ.

Monday – strengthened slightly, decliners led, +1

Friday – weakened, decliners led, +1

Thursday – strengthened, advancers led, +9

Wednesday – weakened, decliners led, +3

Tuesday – weakened, advancers led on the NYSE, +5

SPY down 3.53 at 199.60 on 248.9 million shares, 156% above average volume

VIX down 1.91 at 23.85

TLT up 3.39 at 139.17…on 17.5 million shares, 136% above average volume

Technical Commentary:

DIA -1.47%, SPY -1.74%, QQQ -1.98%, IWM -3.43%,

The winners were bonds TLT +2.50%, utilities XLU +0.83% and gold GLD +0.53%. The losers were stocks and volatility VIX -15.68%.  VIX failed to confirm Monday’s lower move suggesting that the selloff may be near support.

Monday’s SPY volume dropped 33% from Friday’s level which looked like capitulation selling.  Monday’s volume shows less selling which is a sign that stock is shifting from weak hands to strong hands.

Futures are up in after-hours, another indication that selling may be waning and buyers are returning.

If Monday’s support lows hold and price bounces, we should look for entries according to our rules.

Both SPX and SPY found buyers on Monday near their 200% S&R measuring target from Friday’s break of support.

Bloomberg reports that the world’s wealthiest people lost $196.2 billion over the past two trading following the UK Brexit vote.

Nine NDX stocks including TSLA, WFM, CMCSA, TSCO, MNST, DLTR, ROST, TMUS and ORLY gained on Monday. 

Seventy-eight SPX stocks rose on Monday including KR, DPS, EXR, PSA, NEE, TSN, EIX, ES, AWK, SO, DUK, CPB, O, WEC, VTR, ED, AEP and CLX.  ORLY, ROST and WFM are also in the SPX.

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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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 50, be defensive.

9 of 100 NDX stocks closed higher on Monday.

10 NDX stocks are above their 30 DMA.

NDX Stocks to Watch on Tuesday:

Moving Above 30 DMA = 0

Moving Below 30 DMA = 13

AKAM, AMAT, CERN, ESRX, INTC, ISRG, LRCX, NTAP, NTES, SRCL, STX, WBA, WDC

6-month Intermediate Term Market Trend: Neutral

3-day Short Term Market Trend: Down