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I decided to use the futures this week because I feel like it's a better representation of the market action and buy/sell pressure since there is an overnight market to look at. When I look at these daily charts, I get the feeling that we could at a minimum get a small sell off to test the 50 SMA again. Then I look over at the weekly charts to see if they are confirming this bias and they aren't at all. All three indices got strong rallies off of the lows and closed with accumulation bars, which is just crazy at all time highs but it is what it is. In a situation like this, I just give thresholds (or levels) to the market and let it decide for me. For all three indices, the strong level to hold would be the 20 EMA. Holding that would bode well for more upside. The breakdown level in the S&P would be $1810, NASDAQ would be $3500, and the Russell would be $1140. So that is what I will be watching next week.
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The internals are painting the same concerning picture for more upside in the market. VIX is so low that people feel like if they aren't buying protection at all time highs they are morons. Percent of stocks above 200 SMA is really having trouble getting traction to the upside, while continuing the divergences. Rates are getting hit just a little bit, but the uptrend is still in tact. On the percent above 200 SMA, I say you should be watching that 75% level with great attention as if we break down there we could actually get a real correction. There isn't much lower the VIX can go from here so I just feel like the only way to go is up but I could be wrong. Watch the previous low at 11.75 to hold or break.
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AAPL - I like this long if we can get some kind of bullish reaction or hourly setup off of the $535 zone
MSFT - Like it long if it can get some kind of bullish reaction or hourly setup off of the $35.5 zone
AMZN - Good setup as it is, I think it goes higher from here
NFLX - Getting good accumulation bars off of zone/weekly 20 EMA.. would like to see hourly setup for a long
LNKD - If this can hold above daily 20 EMA and setup on the hourly chart I like it long
AKAM - I continue to think this heads higher, maybe fill the gap.. need an hourly setup after this move higher
SNDK - I like this on an hourly setup for a long
CAT - Watching that $91 level to hold and setup on hourly for a long
FSLR - Like this short side down to the 200 SMA on daily
SBUX - Continue to like this to the short side, looking at 200 SMA to be tested
BMY - Need this to hold 20 EMA and setup on hourly for a long side trade
SLB - Looks like it's heading higher but need an hourly setup to enter
Please remember everyone, this analysis is completely irrespective of earnings and you should know that technical setups can be completely thrown out the window if the earnings reaction is large enough which is why I said at the beginning that earnings is messing up a lot of good setups but I still may try to play them selectively before they announce like I did last week.
If you want updates on these setups or to get new setups as they form, follow me on StockTwits or Twitter. My handle is @M5amhan. Thanks for reading.
Trade well,
-Michael
