Happy Holiday!

Looks like Santa Claus is bringing the bulls a present for the holiday by having the SP500 breaks out of the wedge and move back above the 1260 level. The daily chart for the SP500 shows the recent price actions seem to favor an upside breakout.



As another possible holiday gift, the battered financial sector finally showing some upside bids and could be setting up to reverse its downward trend (see the chart for ETF, XLF below.)



And not to overlook the homebuilders, they too are showing some sign of upside price trend. Take a look at the price chart for the homebuilders ETF, XHB.



Finally, Santa did not forget AAPL. It too has moved above the baseline near 396 and appears to be making a move back above the 400 level.



If these price actions hold up and the SP500 stays above 1260, then the SP500 could end the year 2011 in the green.

Have a happy holiday!

Disclosure: long on AAPL

Still Waiting...

The market still have not made a decisive move in either direction. Another OpEx week is upon us, and likely we will see additional volatility while we wait for the market to choose a direction.

Here are the updated charts, click on them to read the commentary:

DJIA:



SP500:



Nasdaq 100:

GLD, SLV & AAPL update

Latest updates for GLD, SLV & AAPL.

Click on the chart to get a larger view to read the commentary.

GLD:



SLV:



AAPL:

Holiday Cheers

Just when one think the market is heading one way, some tricky appears and move it to the opposite direction. Whether it was the encouraging Black Friday shopping results or the European/Central Banks trickery, the market definitely has bought the holiday cheers to the bulls.

The SP500 has bounced off the 200 SMA and it is testing the 1260 (H&S neckline) once again. Although it printed a shooting star candle pattern on Friday, any consolidation under the 1260 at this point could simply be building up more momentum for a surge above the neckline and move into the 1300 territory.



The DJIA printed a doji while sitting on the 200 SMA. This index can be setting up for a move above the 12300 level.



The Nasdaq 100 20 EMA, 50/100/200 SMA are all converging with the price near the convergent point. It is sitting in the middle of the triangle with a rising MACD. These technical signs indicate potential further upside and can leads to upward move above 2400.



Finally, the Russell 2000 is bumping up against the 738 resistance and the upper trendline of the triangle price pattern. When it breakout of this price pattern, it could potentially move to test the 200 SMA near the 773 level.

Santa Claus Rally…

From the latest daily chart for the SP500, the price actions show no sign of a Santa Claus rally is to occur soon. After couple failed attempts to move above the H&S neckline, the SP500 has dropped back into the 1101-1200 trading range. With declining 50/100/200 SMA and a declining 20 EMA, any rally will likely to be short lived and will likely encounter resistance at one of the moving average or the upper bound of the trading range near 1220.

AAPL At A Crossroad

Two weeks ago AAPL broke below 391 and it was trying to hold the 100 SMA for support. After a brief chop near the 100 SMA, it has broken down and dropped to the 200 SMA near the 363 level. AAPL is currently at a crossroad, it is sitting on a supporting trendline that is confluence with the current 200 SMA level (blue line), and this could potentially provide a short term bounce or a level for reversal. In order for the trend to reverse, AAPL needs to move back above the level near 378 (horizontal blue line). But looking at the 354-360 S/R (support/resistance) zone and the long support trendline from the March 2009 low, it is most likely the algor computers and the technical traders are waiting for AAPL to break below the 200 SMA and hit the long term support trendline near 354. If AAPL doesn’t set off a reversal near 354, then 325 is the next potential level for support. Until then, staying on the sideline and watching AAPL price action is probably the most prudent thing to do.

(click on the chart to get a larger view)

Fallen AAPL

The table seems to have been turned for AAPL. The week that just passed, AAPL has been the laggard stock. While the market continues to hold its ground and consolidate in preparation for a move to higher level, AAPL has headed down.

The chart of AAPL below show how the volume has increased when it broke below the 391 level.



Although it has bounced off the 100 SMA, the key level to watch is the broken support level of 391. If it is unable to move back above 391 and breaks below the 100 SMA, then the next potential support for AAPL could be near the 200 SMA (around the 360 region). I will be monitoring the price actions for possible swing long to 409 when it reclaims the 391 level.

Disclosure: short on AAPL PUT.

Continue To Consolidate

The market continues consolidating near prior resistance. The DJIA held the 11600 support and it is consolidating above the 11897 level before making another attempt to break the 12385 level.



The SP500 came down and retested the 1220 for support and now it is attempting to break above the 1260 H&S neckline once again.



The Nasdaq 100 has been consolidating between the 200 SMA and the 2368 resistance. It looks more of ‘when’ rather than ‘if’ it will break toward a new 52 week high above 2438.



The Russell 2000 also has been holding up well, and it appears to be in position to continue it upward move.



GLD, the gold ETF is continue to gap up toward filling the 173 gap.



Silver ETF, SLV appears it will not give up on filling the September gap. Watch for possible squeeze when it breaks above the gap and make a move toward 38.



AAPL has been consolidating between 391 and 409. A shakeout near 391 could occur before it goes on breaking the 409 baseline. If that occurs, it could present a nice swing trade to 409. Continue to monitor 391 and 409 price level.

Continue To Move Higher

The market continues to move higher after a brief consolidation near the resistance level. The Dow Jones Industrials consolidated around the 11600 then surged to the 11897 level. Tested this level for resistance couple time and then it breaks out and moving toward the next potential resistance near 12385.



The SP500 also consolidated near the 1220 level after it has rallied from the failed breakdown of the 1101 August low, and then it breaks toward the level in play, which is the 1260. When it broke above the 1260 level, it didn’t waste any time to move up to the 1296. With the current price action momentum, it is very likely the SP500 will bounce up to the 1345 level once it has moved above the 1296 resistance.



The Nasdaq 100 moved above the 2368 resistance level and heading toward 2438 even with some weak price action from AAPL.




The Russell 2000 moved above 738 and immediately surged to the 773 level. Now the sight is set on 816 as a potential target.



The gold ETF, GLD broke the baseline of a double bottom (or a ‘W’) pattern and looks like it is trying to fill the mid-October gap. The next potential resistance is near the 173 level.



The silver ETF, SLV also showing it is trying to fill a gap made in mid-October. It came 7 cents shy of filling the gap. If it proceed to break above the 50/100/200 SMA, look for possible move up to 38 and filling another gap made in mid-October.



AAPL did what it might do prior to earnings report, it moved to a new high and priced the stock for perfection. Once earnings came out and disappointed expectations, the stock sold off and found support near the 391. Now it is consolidation near the 403-405 level. If the market continues to move higher, eventually a market stock like AAPL will be back in sync with the market price movement. When that happens, look for AAPL to break above the 427 and it might make some analyst’s price prediction near the 450 level to come true.



The overall tone of the market is positive and it is indicating the near term trend is up.

Follow UP

The market continues to move higher while most traders are in disbelieve on this rally off the failed breakdown. The pull back has been anemic, forcing lot of market participants to chase this move.

The SP500 pulled back from the 1220 resistance only on its first attempt to regain this level since September. Failing to pull back toward the 50 SMA or near the 1170 level, the bulls gained confidence and pushed it above 1220 and closed at 1224.58 on Friday. Similar price actions for the DJIA (see chart below)

AAPL did a minor pullback from the 403, but not enough to give a good risk & reward setup to initiate new swing long. Gold & silver continue to consolidate and setting up for the next move. They are still too early to go long or short until they have move away from the current sideway chop.

Expecting a volatile week with earnings report coming from AAPL, IBM and GS along with OpEx week.

Here are the updated charts for the DJIA, SP500, Nasdaq 100, Russell 2000, AAPL, GLD & SLV.

DJIA:



SP500:



Nasdaq 100:



Russell 2000:



AAPL:



GLD (Gold ETF):



SLV (Silver ETF):

Bouncing Back

After last Tuesday breakdown and reversal back into the trading range, the market is bouncing back toward the upper level of the trading range once again. Although the market is still in the down trend, the earnings report period that just got started could bring some upside surprises that could take the market back to test previous broken support level such as 1260 for the SP500 and 11600 for the DJIA.

Below are the charts for the market indice along with AAPL, GLD & SLV. Click on the chart to get a larger view.

DJIA:



SP500:



Nasdaq 100:



Russell 2000:



AAPL:



Silver ETF (SLV):



Gold ETF (GLD):

Resolved!

What a difference a day makes. The SP500 finally resolved itself toward the downside by breaking its August low. Now it is a matter of how low will it go before it can find support. From the daily, there could be a minor support near 1060 then the major support level to be tested is 2009’s August low near 1040. This is only 40-60 points away from today’s close. With current volatility, it can reach that level in one to two trading sessions.




When the last chip standing such as AAPL begins to roll over, that could be an indication the market is entering a capitulation phase. From AAPL price chart, if it breaks below 360 and the March 2009 trend line, capitulation could be near if not already occurring. Will be watching to see what kind of a bounce AAPL will receive after its iPhone 5 announcement tomorrow, this could be a clue on what’s to come.

Still Waiting For Resolution

Continue to wait for the SP500 to resolve from its multi-months trading range. Looking at last week’s result, it seems like the index didn’t change much since it ended the week near where it started. But if one takes a deeper look at individual stocks, one can see there has been some damage done that could be the start of the resolution toward lower low that everyone is waiting for.

Here are the updated charts for the SP500, SPY and the QQQ:

SP500 (weekly):



SP500 (30 minutes intraday):



SPY (weekly):



QQQ (weekly):