DIA New All-time High as SPY Pauses on Light Volume...VMW Soars and NFLX Craters after EPS...

Two of nine sectors moved higher on Tuesday …XLI, XLF and XLP were the strongest sectors while XLB was the weakest sector.  Oil futures fell .46 to close at 45.45.

Breadth weakened as decliners led 1,718 to 1,247 on the NYSE and led 1,658 to 913 on the NASDAQ.

Tuesday – weakened, decliners led, +2

Monday – strengthened, advancers led, +7

Friday – weakened, advancers led, +2

Thursday – strengthened, advancers led, +7

Wednesday – weakened, decliners led, +5

SPY down .22 at 216.19 on 54.3 million shares, 48% below average volume

VIX down .47 at 11.97

TLT up .78 at 139.04…on 8.0 million shares, 11% below average volume

Technical Commentary:

DIA +0.18%, SPY -0.10%, QQQ -0.36%, IWM -0.50%,

DIA was the only broad index ETF to make a new closing highs on Tuesday. DIA was led by gains in MCD +2.18%, JNJ +1.71%, UNH +1.31% and BA +0.92% with 15 Dow stocks rising and two unchanged.

SPY, IWM, XLE, XLF, XLI, XLP, XLU, XLV, XLY are each in a bull flag price pattern.  Get a bounce follow your rules.  The trend is up.

SPY volume was again light on Tuesday which is bullish on a pullback in an uptrend.    

Consider moving up stops on short term bullish trades that could pull back.  All according to your profit protection rules.

Remember breakouts typically test about 70% of the time.

MSFT +4.24%, ISRG +6.86% and CTAS +3.67% where higher in after-hours trading following positive earnings reactions after the close.

Earnings Reactions

VMW +5.66, +9.05%

BRO +1.51, +4.21%

IEX +2.69, +3.19%

CMA +1.06, +2.42%

EMC +0.57, +2.07%

KSU +1.80, +1.88%

JNJ +2.11, +1.71%

UNH +1.84, +1.31%

NFLX -12.97, -13.13%

GWW -11.07, -4.84%

STLD -1.13, -4.04%

RF -0.28, -3.06%

Earning’s Announcements:

Positive Reactions: VMW, EMC, JNJ, CMA, KSU, BRO, IEX, UNH

Negative Reactions: NFLX, GWW, RF,

Technical analysis based trades should be closed before earnings. After-hours

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:  MAR, AMZN, NKE, EW, CMS, VIAB, PYPL, FOSL, CCI,  AWK, BCR, IRM, SYK, MNST, SPG, DLR, AIV, O, KIM, FISV,ADP, MDLZ, CMCSA, EA, NEE, SWN, KHC, WDC, CA, INTU, NI, PNW, CF, TRIP, CCL, RCL, ORLY, EIX, WEC, RIG, NFX, ATVI, CSX, MAT, NCLH, PAYX, GPRO, DVN, CINF, URI, CVX, NKE, PCLN, SBUX, AES, MSFT, VRSK, AA, X, NUE, SCHN, STLD, ATI, KMX

Bull Flag Bounces include:  NVDA, EQR, UDR,

Horizontal Breakout Setups include: NVDA, EQR, LRCX, NTES, NXPI, STX, DLTR, SWKS, AKAM, TSLA, JD, QCOM, VTR, NTAP, CNP, BIIB, REGN, BMRN, NEM, UNH, SE, ADSK, CTXS, TMUS, OKE, CBG,

Horizontal Breakout include:  FB, ROST, BXP, HCN,

New Highs include: FB, ROST, AAL, ADI, AMAT, COST, CSCO, ESRX, EXPE, INTC, TMUS, TXN, ULTA, CBL, CPA, LMT, MAC, JNJ, GGP, DHI, AMBA, GPS, CERN, MLM,

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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 in the upper zone at 95.9, bullish.

28 of 100 NDX stocks closed higher and three were unchanged on Tuesday.

86 NDX stocks are above their 30 DMA.

NDX Stocks to Watch on Wednesday:

Moving Above 30 DMA = 2

MNST, TSCO,

Moving Below 30 DMA = 5

BIDU, CHKP, NFLX, VRTX, WBA,

6-month Intermediate Term Market Trend: Up

3-day Short Term Market Trend: Neutral