Off the Charts

Late last week we saw one of the strongest rallies of the year in the S&P 500 stock as they rallied over 4% from Wednesday's low of 1331 to Friday's high of 1389. The market saw a day of digestion today as it was unable to tack onto gains from last week. The S&P and Dow closed the day around flat, while the Nasdaq was slightly weaker as it closed the day down 0.41%. It was a fairly quiet day in the market as the main focus this week is the Fed decision on Wednesday, followed by the European Central Bank meeting on Thursday, and then the jobs report on Friday. The market rallied at the end of last week on expectations for Fed and ECB action. Will they fire the bazooka when the S&P is less than 3% off yearly highs? Hard to believe they will. The market is on an elevator ride this summer as it continues to push from the low end of the range to the top end of the range in a very short period of time, making it tough to sustain a move. From Wednesday's low to today's high, the S&P rallied more than 30 handles. If this rally is to hold going forward, there are some key levels of support that need to hold: 1375 is Support No. 1. If this level holds, it will prove this market is very strong. The next level of support is 1368, and big support is around 1360-1362. With this recent strength in the market, there is solid sector rotation. Leading stocks find higher levels of support and push higher, while laggard groups are contributing to the strength of this market by extending off of lows. Continue taking trades and playing calculated chart patterns. A lot of buy prices that were listed Thursday triggered on Friday. It is now important to see if these stocks can hold higher and create new pivot levels to trade. Earnings season is beginning to slow down as there are only a few more notable companies to release earnings. Tomorrow is the last day of July trading before August trading begins, typically the slowest month of the year. S&P eSignal View Chart » View in New Window » The momentum, high-beta tech stocks saw large gains last week. Look to get involved on a pullback in these stocks. Apple (AAPL) pushed into its earnings gap on Friday above $580.80 after holding above support of $565-560. AAPL saw a continued move to the upside today but paused in front of resistance of the 21-day moving average of $599.79. It would be constructive for AAPL to hold above $588 if it wants to trade higher going forward. AAPL eSignal View Chart » View in New Window » It took earnings for Amazon (AMZN) to break above the $230 buy price. This stock is on the move and looks good going forward if it continues to hold above $230. The all-time high in AMZN is $246.71. AMZN eSignal View Chart » View in New Window » Google (GOOG) cleared the $518/519 buy price on Friday as it broke out of the recent consolidation. This stock rallied into this morning as it traded as high as $642.60. Today's close signals this stock needs a rest so it can digest some of its recent gains. The momentum stop was when it traded back below Friday's high of $238.34 but overall this stock still looks fine. GOOG is on the radar to get involved on a pullback. $625 is one level of support with bigger support at $620. GOOG eSignal View Chart » View in New Window » The financials had a big rally off of lower levels last week. They paused today to digest some of last week's gains. Will we see a pullback to buy in this laggard sector? JPMorgan (JPM) was downgraded this morning at Deutsche Bank AG and gave back a little more of Friday's gains than most would have liked to have seen. It did, however, hold above support of $35.60-70, which is a positive. JPM saw a strong move last week, and it would be good for this stock to find a higher level of support. JPM eSignal View Chart » View in New Window » Goldman Sachs (GS) gave traders an 80/20 entry today as it failed to hold Friday's high of $102.05. After a five-day rally off of lows, it was hard to buy on the sixth up day. Will today's down move lead to further weakness, or does this stock need a few days of rest to absorb last week's strength? The Fibonacci retracement levels to judge the overall strength/weakness in this stock are $99.47, $98 and $96.70. Today's 80/20 trade was for cash flow as a tactical short in an overbought stock. Use today's high of $102.18 as your stop. GS eSignal View Chart » View in New Window » Trade Update: Las Vegas Sands (LVS) was highlighted on Thursday it broke below last year's key support of $36 and reversed back through that level on heavy volume. Stops were set at $34.72. This trade is in motion and has room up to $39.50-$40 as the first level of resistance. LVS eSignal View Chart » View in New Window » The Fed Open-Market Committee's two-day meeting ends on Wednesday, and will see a rate decision that some expect could include the beginning of QE3. The precious metals are showing expectations for aggressive central bank action. Either way, gold and silver are extremely volatile surrounding these much-hyped announcements. SPDR Gold (GLD) is trading above the intermediate downtrend that has been in place since February. This ETF closed today's session on highs and is hovering at the breakout level of $158-158.50. This pattern is getting tighter and should see a resolution this week. GLD eSignal View Chart » View in New Window »

Off the Charts

With recent strength in the market, there is solid sector rotation.

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