Volatility Sizzles Red Hot Even as SPY Holds Support and Small Cap IWM Gains...Continue Defensive...

Setups to Watch for Wednesday

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Technical Commentary

Geopolitical concerns with Syria and No. Korea continued on Tuesday and the VIX continued to rise, making its highest daily close since Nov 8.  SPX options put and call sizzle were near one, while the SPX vol sizzle was 1.171. The VIX sizzle sizzled.  The VIX call sizzle was 1.274. The VIX put sizzle was a red hot 1.844 and the VIX vol sizzle was 1.218.

Demand was up on VIX puts and market makers were increasing the premium on SPX and VIX options today.  Clearly demand drives price and volatility higher.

Earnings start this week with JPM, WFC and C on the 13th.

The intermediate and long-term trends are still up.

IWM +0.80%, DIA -0.03%, SPY -0.12%, QQQ -0.43%,

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QQQ was down on Tuesday with weakness in AAPL, FB, CMCSA, AMZN, QCOM, AMAT, REGN, TXN and TSLA contributing the largest NDX point declines.

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Up Trend: XLY, XLU, XLV, XLRE = 4

Sideways: XLK, XLB, XLF, XLI, XLP, XLE = 6

Down Trend:

Breadth was steady as advancers led 1,845 to 1,147 on the NYSE and led 1,591 to 1,241 on the NASDAQ.

Tuesday – steady, advancers led, +4 sectors

Monday – strengthened, advancers led on the NYSE, +7

Friday – weakened, decliners led, +4

Thursday – strengthened, advancers led, +8

Wednesday – weakened, decliners led, +2

SPY down .28 at 235.06 on 88.0 million shares, 6% above average volume,

VIX up 1.02 at 15.07

TLT up 1.15 at 122.42…on 11.2 million shares 45% above average volume

Oil futures were up .25 to close at 53.40 on Tuesday.

The SPY MFC green line is sloping down at 46, continue defensive with the SPY remaining above short-term support/resistance zone of 233.91 to 234.72.  Watch for a potential rise in the green line if SPY generates a support bounce.  Also prepare to be bearish if SPY breaks support.

6-month Intermediate Term Market Trend: Up

3-day Short Term Market Trend: Neutral

SPX and NDX Highlights

SPX down 3 points at 2,354.

SPX gainers JWN, HES, AA, GCI, NAVI, DHI, LUV, NEM, TDG, FOSL, RHI, AES, KIM, PEG, DE, IPG, NTRS, OXY, PHM, TJX, KORS, SLB, GT, MAS, XEC, TSO, COH, LKQ, O, SPG, HPQ, XL

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QQQ closes down .57 at 131.45.

   

NDX percentage gainers: AAL, STX, ILMN, WDC, MAT, EA, AKAM, PAYX, CERN, HSIC, ROST, SHPG, HAS, EXPE and CA

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37 of 100 NDX stocks closed higher on Tuesday.

53 NDX stocks are above their 30 DMA.

NDX Stocks to Watch on Wednesday:

Moving Above 30 DMA = 2

AAL, EA,

Moving Below 30 DMA = 5

AMAT, CMCSA, CSX, PYPL, TXN,

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Strong Stocks: Setups and Moves You Can Use

Bull Flag Setups include: DIS, QQQ, SWKS, CC, FB, MAR, AAPL, CCL, VIAB, NFLX, WYNN, CHK, LVS, NXPI, MSFT, HUN, PCLN, SPY, XLY, UNH, JNJ, SWN, AVGO, EA, ATVI, KLAC, WIX, CSX,

Bull Flag Bounces include: MCD, EA, AMZN, (3)

One Day Pullback: TSLA, BABA,

MACD Histogram Bullish Divergence: AVGO, MMM, IBM, AMBA,

Divergence Bounces include: EA, CF,

Horizontal Breakout Setups include: STX, MAT, CERN, IYR, MSFT, LNG, CLX, EXPE, X, ADBE, CBOE, KLAC, DIA, PANW, BA, COST, EBAY, NRG, NUE, STI, UAL, XLU, HD, ADP, LRCX, CTSH,

Horizontal Breakouts include: AAL, LUV, TLT, XLE,

New Highs include: WDC, ADBE, MOMO,

At Support Setups include: MU, RCL, MNST, AMD, SOXL, FLEX, ALK, V, DAL, HAS, NVDA, PYPL, CTRP,

Support Bounce: ROST, PAYX,

Break of Support: NTES, ADI

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