Stock Market Internals Neutral Despite Selling 12-1-15

The stock market is in an interesting spot for day traders today…

Despite a weak close, market breadth was neutral, as was volume. This is a stock picker’s market. A closer look at the SPY daily candlesticks and one word jumps out: inconsistent.

Most traders are taught to read the market first, and then make a call on relative strength or weakness (top-down analysis). This means find stocks trading in sync with the market.

Top-down analysis is the correct method to assess trades. Start with market and work you way down to the stock.

The challenge this year, is the market is not giving us consistency from day-to-day. Sure week-to-week looks great, if you look at a weekly chart, but we are talking about day trading.

What do you do? Stay in day trading mode unless the market is giving clear continuation patterns in sync with market internals.

This means stock picking and preservation of capital.

Stock Market Today: Map of the S&P 500

(click the map for a full view)

Stock Market Internals Neutral Despite Selling 12-1-15

 

Day Trading Game Plan: The SPY ETF Outlook

The SPY volume was neutral, despite the close near the low. The sporadic nature here for 2015 is maddening. 208 (20 ema) 210 and 212 are the levels to watch. If the SPY breaks $208 support, 203 is the next level.

(click the chart for a full view)

Stock Market Internals Neutral Despite Selling 12-1-15

 

Pete’s Notes:

  • The general market returned from the holiday with selling. Can we get more than one day to form a bias?
  • NFLX rejected by $126 resistance again. I still like it long above this level.
  • Casino stocks | WYNN LVS | found buyers at support. We called it as a “non-short” yesterday morning.
  • CVX XOM | room to go to the long side. Look good if they can hold a bid and close strong. Topping tails for now.
  • Retail still weak.

Charts in Focus

AVGO Avago Technologies Limited

AVGO needed to break $130 with a strong close. Chip stocks are trading well into the holiday season. $134 is the first target. (earnings report Wednesday)

(click the chart for a full view)

Stock Market Internals Neutral Despite Selling 12-1-15

Stock Market Internals Neutral Despite Selling 12-1-15

Stock Market Internals Neutral Despite Selling 12-1-15

Relative strength yesterday compared to the SPY negative change from the open: AMBA, BIDU, NXPI, SLCR, QUNR, CTRP, PAA, WLL, RAX, BABA, VRX, GMCR, WYNN, AER, DVN, MNK, CSIQ, CF, ADI

> 20sma | positive week | closed 2% higher from the open: AMBA, BIDU, NXPI, SLCA, QUNR, BABA, AER, ADI

<20sma, negative last 5 days and closed 2% lower from the open: ea, gild, biib, celg, feye, abbv, hfc, tmus, car, urbn, lulu

Bullish Ideas ATR/Volume/Price: BIDU, CTRP, BABA, ADI, LYB, WTW, ADSK, OXY, DLTR, AVGO, PNC, MCD, NSC, HD, GOOGL, LOW, COST, VLO, NKE, NFLX, AMZN

Bearish Ideas ATR/Volume/Price: lulu, car, ua, celg, gme, m, jwn, ual, dks, tgt, aet, vfc, mar, prgo, cvs, akam, mbly, lng, rrc, race, cmi, wdc

Weak Stock Weak Close: urbn, lulu, car, tmus, feye, dsw, celg, m

Strong Stock Weak Close: SRPT, ANF, PBF, NFLX, TSO, LLY

Weak Stock Strong Close: cf, pot, wynn

Strong Stock Strong Close: BIDU, CTRP, AER, ADI, BABA

20 day Breakdown: car, exc, luk, mar, rrc, tmus, utx, wpz

20 Day Breakout: adi, aer, amba, bhi, bidu, nxpi

2x Normal Volume: BABA, VIPS, JD, BIDU, NXPI, AER, CTRP, TEVA, MBLY, URBN, LULU, RAX, FTNT, QUNR, BXLT, HCN

Watch List Longs: PRU, PNC, MCD, BK, HON, TRV, HD, COST, VLO, EBAY, TXN, INTC, MSFT, DD, DOW, BRCM, KLAC, ADBE, LOW

Watch List Short: adm, aet, bby, tgt,  axp, m, ual, lvs, akam, csco, ntap, qcom

Inside days: yoku, pep, fox, de, emr, gpro, duk, wba, mon, a, skx, dfs, mur, rdc, hes, wm, cma, xpo

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