SPY Pulls Back from High Stays Above Support...Healthcare Leads SPX, NDX Lower...VIX Jumps...Oil Falls...

All nine sectors moved lower on Wednesday …XLU, XLF and XLP were the strongest sectors while XLV was the weakest sector.  Oil futures fell .77 to close at 46.80.  Oil is forming a potential bull flag.

Breadth weakened as decliners led 2,085 to 884 on the NYSE and led 1,680 to 884 on the NASDAQ.

Wednesday – weakened, decliners led, +0

Tuesday – strengthened, advancers led, +7

Monday – strengthened, advancers led, +3

Friday – weakened, decliners led, +3

Thursday – strengthened, advancers led, +7

SPY down 1.12 at 217.85 on 71.7 million shares, 19% above average volume

VIX up 1.07 at 13.45

TLT down .33 at 139.70…on 6.0 million shares, 6% below average volume

Technical Commentary:

IWM -0.81%, QQQ -0.65%, SPY -0.51%, DIA -0.35%,

IWM pulled back from Tuesday’s higher high making day one of a potential bull flag pattern.  SPY, QQQ and DIA sold off to their short-term support of their current 14-day sideways channel on Wednesday.  At Wednesday’s close SPY is down just 0.80% from Tuesday’s new intra-day high.  Gold fell $14, its largest one-day drop since Aug 5.

SPX big losers included materials stocks NEM, FCX, AA, CF, MOS, FMC, ALB, OI and NUE, and healthcare stocks ENDP, MYL, MNK, VRTX, AGN, PRGO, ALXN, REGN, PKN, CELG and BIIB on Wednesday.

While Wednesday’s action is correctly viewed as price fluctuation and not trend change, one should prepare to become defensive if today’s pullback continues and breaks support.

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.

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:  AAL, MPC, CBL, URBN, WRK, PCAR, CHTR, LB, SBAC, M, KSS, CERN, GS, ROST, ETFC, TMUS, CTRP, KMX, AAPL, PCLN, KMI, JD, MAR, MU, HRL, INTC, WMB, JCP, TWTR,

Bull Flag Bounces include:

Horizontal Breakout Setups include: ZION, MSFT, AAL, MPC, C, PAYX, WFC, BX, HLT, JPM, CHK, KHC, ADBE, SPY, IWM, FAS, XLF, NVDA, TSN, MAT, HPE, NFLX, STX, CBG, AVGO, URI, WDC, QQQ, GPRO, JWN, RL, CAT,

Horizontal Breakout include: VLO, CCL, TIF, PAYX, BAC,

New Highs include: AMBA, MS, NTAP, EA, XLNX, SYMC, PCAR, STT, TIF, ADSK, AVGO, SWKS, AMAT, ULTA, BURL,

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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 in the upper zone at 85, bullish, prepare to become defensive.

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

64 NDX stocks are above their 30 DMA.

NDX Stocks to Watch on Thursday:

Moving Above 30 DMA = 1

SBUX,

Moving Below 30 DMA = 8

CELG, CTSH, INTU, ISRG, LBTYA, LMCA, REGN, VRTX,

6-month Intermediate Term Market Trend: Up

3-day Short Term Market Trend: Neutral