Stocks Bounce as Buyers Return on Monday...Bull Flags Prevalent...

All nine sectors moved higher and on Monday…XLP, XLU and XLK were the strongest sectors while XLB was the weakest sector.  Oil futures rose .35 to close at 46.06.

Breadth strengthened as advancers led 2,204 to 846 on the NYSE and led 2,032 to 775 on the NASDAQ.

Monday – strengthened, advancers led, +9

Friday – weakened, decliners led, +0

Thursday – weakened, decliners led, +3

Wednesday – strengthened, advancers led, +5

Tuesday – weakened, advancers led, +6

SPY up 3.06 at 216.34 on 168.1 million shares, 139% above average volume

VIX down 2.34 at 15.16

TLT up .07 at 135.59…on 9.0 million shares, 34% above average volume

Technical Commentary:

QQQ +1.79%, SPY +1.43%, IWM +1.39%, DIA +1.32%,

SPY bounced forming a large piercing line candle pattern as buyers returned on Monday rallying back to short-term support which was broken on Friday.

QQQ formed a bullish engulfing pattern. 

IWM formed a piercing line pattern.

DIA formed a piercing line pattern.

Airline stocks DAL UAL ALK, LUV and AAL are forming a potential bull flag pattern.

FB +1.59, +1.25% forming a bull flag pattern.

MU +0.34, +2.02% forming a bull flag pattern.

WMB +0.38, +1.26% forming a bull flag pattern.

Monday was a re-entry day on many charts.  Many more charts are set up to be a potential re-entry on Tuesday.

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: UAL, ALK, AAL, V, NTAP, STX, FB, MU, WDC, SYMC, EBAY, ADSK, AMAT, NFLX, YHOO, SWKS, INTC, PYPL, JD, XLNX, AKAM, WBA LVNTA, SWN, WMB, VLO, GT, WRK, BAC, BURL, BABA, SCHW, JPM, BIDU, SINA, CAVM, RL, FL, KMI, DAL, LUV, MPC, HRS,

Bull Flag Bounces include: NTES, MA, MS, ZION, GS, ATVI, CHTR, CSCO, KSS, URBN, LVNTA,

Horizontal Breakout Setups include: LVNTA, MS, GT, V, MA, ZION, ATVI, URBN, CSCO, CHTR, GS, MPC, STT,

Horizontal Breakout include: ETFC, NTES, FCX,

New Highs include: CHK, ETFC, NTES, 

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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 at 62, defensive. 

98 of 100 NDX stocks closed higher on Monday.

40 NDX stocks are above their 30 DMA.

NDX Stocks to Watch on Tuesday:

Moving Above 30 DMA = 16

AKAM, BMRN, CSCO, CSX, DISH, EA, EXPE, ILMN, KHC, LBTYA, LRCX, MDLZ, NVDA, QCOM, TRIP, VRSK

Moving Below 30 DMA = 0

6-month Intermediate Term Market Trend: Up

3-day Short Term Market Trend: Down