Stocks Broad Rebound From Brexit Two-day Selloff Led by Energy, Financials and Discretionary...Volatility Sinks...

All nine sectors moved higher on Tuesday …XLE, XLF and XLY were the strongest sectors while XLU was the weakest sector.  Oil futures rose 1.50 to close at 48.11.

Breadth strengthened as advancers led 2,608 to 584 on the NYSE and led 2,070 to 551 on the NASDAQ.

Tuesday – strengthened, advancers led, +9

Monday – strengthened slightly, decliners led, +1

Friday – weakened, decliners led, +1

Thursday – strengthened, advancers led, +9

Wednesday – weakened, decliners led, +3

SPY up 3.60 at 203.20 on 158.0 million shares, 62% above average volume

VIX down 5.10 at 18.75

TLT up .29 at 139.46…on 13.7 million shares, 85% above average volume

Technical Commentary:

QQQ +2.19%, SPY +1.80%, IWM +1.55%, DIA +1.53%,

Stocks reversed course as futures gain Monday night and continue higher on Tuesday.  SPX and SPY found buyers on Monday near their 200% S&R measuring target from Friday’s break of support and rallied big on Tuesday.  VIX continued to fall on Tuesday confirming the SPX bounce.

A large number of MACD histogram divergence bounces and setups occurred today.  See our list below.

Friday’s volume looked like capitulation selling as we previously wrote and today’s bounce just reinforces that view.  Monday dropped on lower volume which appears to be a liquidity premium, “you want out today?  Okay it’s going to cost an extra percent.”  Those who sold out on Monday, not only sold low but also lost today’s bounce back.

We wrote Monday evening, “If Monday’s support lows hold and price bounces, we should look for entries according to our rules.”  We hope you took advantage of the bounce today.

On Friday 39 SPX stocks rose, today 31 SPX fell and 469 rose.  In addition to the energy stocks listed next, SPX gainers included NRG, FCX, PVH, OI, C, CMA, AYI, FSLR, SPLS, AGN, UA, BAC, WHR, MS, UA, NWL and WY.

Oil rallied on Tuesday after bouncing from on similar low, from June 16, on Monday gained over 3% today.  Energy rebounded big on Tuesday with eleven stocks among the top 25 SPX gainers:  SWN, MPC, MRO, COG, MUR, DVN, NFX, CHK, XEC, RRC, HES

After just three NDX stocks rising on Friday, Tuesday was the inverse with just three stocks falling ILMN, DLTR and MNST.  Tuesday’s NDX leaders included ENDP, LBTYA, STX, BMRN, MU, AAL, INCY, CTRP, GILD, VOD, WDC, STX, AVGO, SWKS, NTES, AKAM, FB, ADI, MAT, TMUS, NFLX and PYPL.   

PAYX and MU have earnings on Thursday.

Earning’s Announcements:

Positive Reactions: IHS

Negative Reactions: NKE

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:  NEM, MU, OKE, RIG, ULTA, MNST, SYK, AES, BCR, SYMC

Bull Flag Bounces include:  JNJ, FISV, AVGO, IRM, GPS, UNH, XOM, RRC, CVX, SE, EQT, DLR, NFX, CNP, EQIX, CINF, AMT, SBAC

Divergence Bounce: SWN, TXN, ESRX, EA, INCY, CMCSA, DVN, ATVI, FCX, MLM, MUR, XEC, NRG, AKAM, FB, AMAT, BIDU, BBBY, BMRN, CELG, CERN, CTRP, EXPE FAST, INTU, JD, MNST, MSFT, NFLX, QCOM, TMUS, TRIP

Horizontal Breakout Setups include: SWN, IRM, GPS, DLTR, UNH, ROST, SE, EQT, COG, NFX, NI, CNP, CINF, HCN, UDR, SPG, AMT, TSCO

Horizontal Breakout include: JNJ, COG, DLR, AIV, AVB, EQR, ESS, GGP, KIM, MAC, SPG

New Highs include: JNJ, DLR, AWK, O, EIX, VTR, DG, CMS, WEC, NEE, PNW, FRT, KIM, MAC, CCI

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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 43, defensive.  Remember MFC is a lagging indicator.

97 of 100 NDX stocks closed higher on Tuesday.

20 NDX stocks are above their 30 DMA.

NDX Stocks to Watch on Wednesday:

Moving Above 30 DMA = 10

ADP, CERN, CMCSA, ENDP, KHC, LRCX, NTES, SRCL, TMUS, TSCO,

Moving Below 30 DMA = 0

6-month Intermediate Term Market Trend: Neutral

3-day Short Term Market Trend: Down

2-day Short Term Market Trend: Neutral