Technical Picture - Markets Mixed

Markets were mixed on Friday with tech outperforming the broader markets on the heels of GOOG earnings Thursday night. Several factors weighted on the S&P and the DOW including continued weakness in banks/financials over forclosure issues, bounce in the $USD, weak earnings from bellwether GE, and unfavorable Mich. sentiment data.

As we can see from the 5 day performance chart below, money is flowing out of financials into tech.

The banking/financial sectors are really ugly. If they don't find support soon, it'll kill the rally.

Diverging markets Comp. vs. S&P and DOW is a yellow light and could lead to short-term corrective price action.

Companies reporting earnings this week:

Monday: C, HAL, PETS, AAPL, IBM, STLD, VMW, and ZION.
Tuesday: AEP, BAC, KO, EMC, GS, HOG, ITW, JNJ, LMT, OXY, BTU, SVU, WFT, CREE, ISRG, JNPR, SYK, WDC, and YHOO.
Wednesday: ABT, MO, BA, DAL, GENZ, MS, LCC, USB, WFC, AMR, ETFC, EBAY, NFLX, SCHN, and STX.
Thursday: ALXN, T, BBT, CAT, DHR, LLY, FCX, GR, HSY, JBLU, NTRS, NUE, PENN, PM, PCP, LUV, TRV, UPS, UAL, AMZN, BUCY, COF, CMG, SNDK, and SYNA.
Friday: EXC, HON, KEY, ERIC, SLB, TROW, and VZ.

Focus list for next week includes Thursday's setups for CREE, ALTR, and WYNN still in play. Also, add FSLR and ADBE at the blue lines on the charts below.

ADBE formed a base at these levels in August and could easily retest $30.00 on the MSFT rumor.

Let's review Friday's trades. We said that AMZN would likely break the $157.00 base in sympathy with GOOG earnings. And we also said it would likely gap up.

That's exactly how it played out. Opening gap, followed by a retest of the base. We wait for price to come back into the BB and form a tradable base. I exited after 3 consecutive WRBs.

Price consolidated the early move and there was no evidence that AMZN would retrace so I started looking for a potential second entry. Price formed a flat base. Two pivots into the same price levels is a tradable base. Price rallied and then retested the base before the final sprint into the close.

AAPL had an early run similar to AMZN but I missed it. In the afternoon, I noticed it was coiling near session highs. I took a long entry. Here again, price retested the base before ripping into the close.