Technical Picture - Constructive Market Action

Friday's action was constructive despite the lack of volume. The Nasdaq as depicted below retook the 200SMA. New highs on the NYSE outnumbered new lows 42/12 (Nasdaq 38/36). Several names we like and talked about in the comments were included in the new highs list NTAP, AKAM, NFLX. And the markets closed near the HOD on late day strength despite the lousy retail sales data.

We're not out the woods yet. The markets closed just shy of the 20EMA which was our next level resistance. Even so, we need to see a follow through day with big volume or we need to close above the previous high set on June 4th before the bulls can confirm that the correction is over.


The VIX looks weak. A close below the 62% Fib. retracement level could see price fall back to the base.

Transports testing the down-sloping trendline.


Failed rally attempt in $USD on Friday. Euro index (below) positive divergence of RSI and MACD to lower prices, foreshadows the end of the move.


In addition to NTAP, NFLX, AKAM, my focus list includes CRM, AAPL, PRGO, BIDU, SNDK AMLN, HGSI, APKT, POT, CNQ, CHK, and CLF. On the short side, as mentioned in the comments GS and CSCO. Also watching GLD (Gold ETF) and gold stocks. If GLD retests its highs and fails on the third attempt, I will swing short.

My open swing trades are NTAP (chart below) and POT long. Day trades on Friday - NTAP and AKAM long.