Friday, October 28, 2016

Institutional Buyers Step Up at 2,120 as SPX Rallies on Volume Increase...

Five of ten sectors moved higher on FridayXLI, XLP and XLU were the strongest sectors while XLV was the weakest sector.  Oil futures dropped .94 to close at 48.66.

For the week ended October 28 only four of ten sectors moved higher,
XLU +0.96%, XLP +0.42%, XLF +0.61%, XLI +0.19%, XLK -0.19%,
SPY -0.67%,
Lagging sectors XLB -0. 70%, XLE -1.17%, XLY -1.95%, XLV -2.77%, XLRE -3.39%,

YTD 209
Leading Sectors: XLE +15.00%, XLU +11.97%, XLK +10.76%, XLI +7.72%, XLB +7.62%, XLP +4.32%,
SPY +4.25%,
Lagging Sectors: XLF +2.17%, XLY -0.15%, XLRE -2.89%, XLV -5.90%


Breadth strengthened as decliners led 1,799 to 1,212 on the NYSE and led 1,581 to 1,129 on the NASDAQ.

Friday – strengthened, decliners led, +5
Thursday – weakened slightly, decliners led, +2
Wednesday – weakened slightly, advancers led, +4
Tuesday – weakened, decliners led, +2
Monday – strengthened, advancers led +8


SPY down .63 at 212.54 on 140.6 million shares, 63% above average volume
VIX up .83 at 16.19
TLT down .29 at 130.45…on 7.5 million shares, 3% below average volume

Technical Commentary:
DIA -0.09%, %, IWM -0.28%, SPY -0.30%, QQQ -0.63


The SPX/SPY opened near Thursday’s low and move higher until about 1 pm ET when FBI announced that it was looking into additional emails that it had found that could be related to the earlier Clinton investigation.  Within the next several minutes the SPX dropped 20 points to the 2,120 area and VIX spiked over 17.  At the 2,120 area buyers stepped up and the SPX rallied ultimately closing at 2,126.

For the seventh time since September 12, institutions bought at the SPX 2,120 value area.  SPY volume jumped from 77 million on Thursday to 140 million on Friday which was 63% above average.

Five sectors gained and while decliners led advancers on the NYSE and NASDAQ, advancers increased on both exchanges.  More than 50 NDX stocks were higher and more than half the SP500 moved higher on Friday.

Earning winners and losers again dominated the largest gainers and losers on Friday.  Winners included RCL, HBI, SRCL, HSY, EMN, VRSN, UBS, BIDU, CRUS, EXPE, MO and CVX.  Losers included AMZN, MCK, ABC, CAH, GT, ABBV, LM, COG, CA, AMGN, AET, LITE and XOM.


SPX Leaders: RCL, BHI, HBI, SRCL, HSY, EMN, VRSN, EW, LVLT, ORLY, SYK, PBI, EXPE, CCL, KOR, TRIP and CVX

Institutional activity continues to indicate that last quarter’s trend on stock selectivity based on quarterly results as opposed to industry or sector rotation is a primary driver of price action.


Institutional reaction to earnings announcements continues to be the real determinate to market movement.  

Earnings Announcements
Monday – CHKP, DO, SCTY, TSO,
Tuesday – ADM, GILD, HRS, HLF, ILMN, MOS, NFX, NBL, PAYC, DATA, CAVM
Wednesday – BABA, AIG, FB, FSLR, QCOM, HSIC, SHOP, FOXA, UVE, YELP, RIG
Thursday – DDD, APA, CHTR, CS, FOSL, LVS, LBTYA, MNST, PRAA, SWKS, SBUX, SLCA, UBNT
Friday – MCHP


EPS Positive Reactions
RCL, HBI, SRCL, HSY, EMN, VRSN, UBS, BIDU, CRUS, EXPE, MO, CVX, FFIV, WDC, COP, DOW, AKAM, JNPR, BA, NCR, OI, FLIR, ROL, TSS, LMT, KEY, FCX, VLO, BHI, SAVE, AKS, TMUS, MCD, PYPL, MSFT, MXIM, AXP, SNA, MAT, BK, STLD, WBA, ALK, URI, HAL, MS, USB, NFLX, HOG, UNH, GS, CE, DPZ, CMA, UAL, HAS, DAL, CSX, COST, RHT, FDX, ADBE

EPS Negative Reactions
AMZN, MCK, ABC, CAH, GT, ABBV, LM, COG, CA, AMGN, AET, LITE, XOM, CLF, ORLY, NEM, POT, AAPL, EW, CMG, LUV, CMCSA, UA, P, WHR, PNRA, JBLU, GM, MMM, NLSN, WAT, SHW, MAS, PNR, MCO, EBAY, TRV, LRCX, TSCO, INTC, ISRG, ST, JNJ, IBM, AA, FAST, ILMN, MU, PAYX, CCL

EPS Neutral Reactions

GOOGL, PSX, SKYW, BX, CA, TWTR, UPS, TSLA, MO, NXPI, STT, GD, KO, ESRX, VRTX, PCAR, AAL, NUE, XLNX, CTXS, LLTC, BAC, C, JPM, PNC

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: MSFT, PYPL, MAT, CTXS, GOOGL, TMUS, DISH, TXN, MXIM, NVDA, ULTA, SCHN, ALK, UAL, STI, ADBE, AKS, HAL

Bull Flag Bounces include: EXPE, ADSK, HAS, MLM,


Horizontal Breakout Setups include: WDC, VRSN, HAS, STLD, X, ZION, C, JPM, DAL, AAL, BIDU, NCLH, TRIP, CAVM, CCL, QCOM, DO, RIG, SOXL, MDLZ, SRCL,

Horizontal Breakouts include: EXPE, DPZ, MDLZ, HSY


New Highs include: AKAM, EXPE, CE, NFLX, USB, BAC, GS, CMA, MS, NTES, SAVE, NVDA, NFLX, 


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Short-term Movers for the week:
SPX gainers:  LVLT, FFIV, JNPR, BHI, FLIR, OI, FCX, COP, KEY, CTL, EMN, LMT, HSY, RCL, R, NOC, AA, PBI, BA, FLR, VLO, PFG, HBAN, TSS, SEE, CB, HBI, RSG, +4, 35
SPX losers:  GCI,  MCK, UA, EW, NLSN, ABC, CHK, SHW, NOV, LH, NRG, WAT, GT, CAH, SWN, CMG, WHR, DVA, NWSA, AVY, AMP, DVN, TDC, LM, MUR, MAC, LUV, SLG, AGN, VAR, RRC, MAS, AYI, SPG, FOSL, CBG, CXO, MRO, MHK, KIM, EFX, NWL, AN, RHI, ABBV, PNR, BXP, HOLX, O, HCA, GGP, ALLE, A, LOW, OKE, CSRA, GLW, URI, HCP, LLY, ZTS, HES, CVS, HP, MJN, -4, 87

NDX gainers:  AKAM, ALXN, WDC, MDLZ, SRCL, TMUS, CELG, NVDA, CHKP, +4, 9
NDX losers:  AMGN, ESRX, CTRP, ENDP, PYPL, AMZN, TSCO, CA, ORLY, LMCA, EA, -4, 11,

YTD: 209
SPX Leaders:  NEM, OKE, SE, FCX, URBN, ALB, XEC, SWN, HPE, PXD, (312, -9 > 10p 196, -4)
SPX Losers:  GCI, PRGO, FSLR, MCK, SIG, ABC, HRB, AGN, FOSL, RCL,

NDX Leaders:  NVDA, AMAT, NTES, LLTC, QCOM, CHTR, AKAM, ULTA, TXN, NTAP, (57, -2, >10p 36, -2)
NDX Losers:  ENDP, VRTX, NCLH, REGN, SRCL, QVCA, MYL, LMCA, ALXN, ILMN

DJI Leaders:  CAT, UNH, CVX, WMT, CSCO, JNJ, MRK, IBM, MMM, PG, (19, +0, >10p 9, -1)

DJI Losers:  NKE, DIS, HD, GE, MCD, AXP, TRV, GS, KO, BA


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 39, defensive. 

53 of 100 NDX stocks closed higher and two were unchanged on Friday.

38 NDX stocks are above their 30 DMA.

NDX Stocks to Watch on Monday:
Moving Above 30 DMA = 8
ADSK, CTSH, LVNTA, NCLH, PCLN, SRCL, TRIP, WFM

Moving Below 30 DMA = 9
AVGO, COST, CSX, DISCA, LRX, MU, SBUX, SWKS, TSLA


6-month Intermediate Term Market Trend: Up
3-day Short Term Market Trend: Down

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