Wednesday, December 31, 2008

Stocks End Year With Support Bounce Continuation

DJIA + 108.00, +1.25% SP500 + 12.61, +1.42% NASDAQ Comp. + 26.33, +1.70% Russell 2000 + 16.68, +3.46% Exchange NYSE NASD Advancing 3,212 2,264 Declining 665 680 Oil $44.60 +$5.57 Gold $883.60 +$14.30 SOX 212.17 +0.91 VIX 40.00 -1.63 The VIX moved down confirming the rise in the SPX on Wednesday. (click images to enlarge)
Strongest Sectors: XLF +3.22%...XLI +2.40%...XLY +1.79% Weakest Sectors: XLV +0.91%...XLP +0.97%...XLE +1.06% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK, XLF Down Trending: All nine sector ETFs rose on Wednesday. XLF was the leading sector for the second straight day. Oil rose over 14% on the eve of when the OPEC production cuts were scheduled to occur. Watch to see if this is just a counter trend move or turns into a trend change. One news based view that I saw was that the market was up on Wednesday and the volume was low so that indicated no conviction. We stated on Monday of last week to expect volume to be low in the two holiday shortened weeks and to expect movement to shift back and forth between buyers and sellers. That is what happened. The low volume on Wednesday, oh yes and Tuesday and Monday and Friday are not evidence of lack of conviction, rather it is evidence that many traders took time off. Period. The broad indices are in sideways trends so expect them to bounce between support and resistance until they breakout of the trading range. Expect this to occur whether it happens on low or high volume. The market this week acted precisely consistent with a sideways trend and a low volume holiday shortened week. Period. The head and shoulders bottom in each of the four major indices indicates a potential move up over the month of January. On the DJIA that is a move to the 10,200 area. Of course a good trader knows that patterns give the more probable move and price target and that the less probable move can still occur. Dave's Insight: Technical analysis is about probabilities, not certainties. ProphetCharts
Stocks to Watch on Friday Leading Stocks: Holding Above 30 DMA AYE…PCLN…BAP…DLTR…FLR…JCOM…JEC…PCR…ATK…B…IRIS…SNA…WMS…HAS…JOSB…AMZN…BIIB…BYI…HDB…LFC…PSSI…CERN…FWLT…MTW…QSII…VMI…OI…FLS…BCO…NDAQ…ROST…VIVO…AET…UTX…APH…CAM…CCC…CIR…CL…DECK…DV…EPR…ESI…GES…GILD…JW.A…MYGN…NOV…ACL…BLUD…DNA…HLF…OSIP…AGN…KEX…LAYN…RCI…CELG…NEU…PSYS…RIO…SHW…AMED…PETS…SOHU…SPTN...BCR…CAM…FLIR…NGS…NOV…SPN…WAB…AFAM…CHTT…CTSH…FSTR…IIVI…K…MCRS…NIHD…PCP…SWN Moving Above 30 DMA = 6 AMX…CBST…HP…STRA…TECH…TEVA Moving Below 30 DMA = 3 ANSS…ESRX…GME Staying Below 30 DMA SWN…MMM…AME…GIS…PTNR…AXYS…MON…MTD…URBN…ICLR…LNN...AAPL…TECH…EZPW…MOS…POT…PPD…RTN…SINA…WCG…MBT…PRGO…RIMM…NILE…PPD…CHU Wednesday’s Action Moving Up: MA, PCLN, FSLR, PNRA, STRA, GS, ZION, CF, V, SOHU, AGU, NDAQ, AEM, GDX, KRE, IPI, MS, MON, KMT, KBE Moving Down: ESRX, HANS Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Up

Tuesday, December 30, 2008

Classic Support Bounce on Tuesday

DJIA + 184.46, +2.17% SP500 + 21.22, +2.44% NASDAQ Comp. + 40.38, +2.67% Russell 2000 + 16.62, +3.57% Exchange NYSE NASD Advancing 3,134 2,000 Declining 752 930 Oil $39.03 -0.99 Gold $869.30 -$5.30 SOX 211.26 +9.31 VIX 41.63 -2.27 The VIX moved down confirming the rise in the SPX on Tuesday. Strongest Sectors: XLF +3.85%...XLY +3.77%...XLI +3,72% Weakest Sectors: XLU +1.53%...XPI +1.59%...XLK +1.87% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK, XLF Down Trending: The support bounce that we discussed in our webcast on Monday evening occurred on Tuesday. The market continued trading light volume slightly higher than on Monday just as we had expected. All nine ETF sectors moved higher on Tuesday. All nine sectors have now been in a sideways trading range or sideways trend for 4 weeks or more and are now listed as Sideways in our Sector Watch. The rally was reasonably broad for the light volume holiday shortened trading week as advancers led decliners 4 to 1 on the NYSE. On the Nasdaq advancers led decliners 2 to 1. In our Stocks to Watch list there were 12 stocks crossing above the 30 DMA to just one crossing below. Our Action watch list had 24 stocks Moving Up and 2 Moving Down. We mentioned last night the fact that the SOX PHLX Semiconductor Index was essentially flat on Monday was a bullish clue. We set up a virtual trade on MRVL with a buy stop at 6.62 which filled on Tuesday. We also showed charts on TXN and BRCM and mentioned they were also attractive setups. The SOX, MRVL, TXN and BRCM all had classic support bounce entries today. Stocks to Watch on Wednesday Leading Stocks: Holding Above 30 DMA AYE…PCLN…BAP…DLTR…FLR…JCOM…JEC…PCR…ATK…B…IRIS…SNA…WMS…HAS…JOSB…AMZN…BIIB…BYI…HDB…LFC…PSSI…CERN…FWLT…MTW…QSII…VMI…OI…FLS…BCO…NDAQ…ROST…VIVO…AET…ESRX…UTX…APH…CAM…CCC…CIR…CL…DECK…DV…EPR…ESI…GES…GILD…JW.A…MYGN…NOV…ACL…BLUD…DNA…HLF…OSIP…AGN…KEX…LAYN…RCI…CELG…NEU…PSYS…RIO…SHW…AMED…PETS…SOHU…SPTN BCR…CAM…FLIR…NGS…NOV…SPN…WAB Moving Above 30 DMA = 12 AFAM…ANSS…CHTT…CTSH…FSTR…GME…IIVI…K…MCRS…NIHD…PCP…SWN Moving Below 30 DMA = 1 CHU Staying Below 30 DMA SWN…MMM…STRA…AME…GIS…PTNR…TECH…AXYS…MON…MTD…URBN…ICLR…LNN...AAPL…TECH…EZPW…MOS…POT…PPD…RTN…SINA…TEVA…WCG…MBT…PRGO…RIMM…NILE…AMX…CBST…PPD Tuesday’s Action Moving Up: STRA, GS, X, AFAM, PCLN, HANS, SCHN, AGU, NDAQ, NUE, SOHU, ZION, CLF, MON, PNRA, KRE, GRMN, JASO, KMT, CF, BRCM, NIHD, KBE, ANR Moving Down: V, ESRX, Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Neutral

Monday, December 29, 2008

Light Volume Trading Continues

DJIA - 31.62, -0.37% SP500 - 3.38, -0.39% NASDAQ Comp. - 19.92, -1.30% Russell 2000 - 10.62, -2.23% Exchange NYSE NASD Advancing 1,480 826 Declining 2,358 2,079 Oil $40.02 +$2.31 Gold $874.60 +$4.10 SOX 201.95 -0.05 VIX 43.90 -0.52 Strongest Sectors: XLE +2.19%...XLU +0.21%...XLK +0.07% Weakest Sectors: XLY -1.92%...XLI -1.87%...XLB -1.81% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK Down Trending: XLF Trading volume rose on Monday but still traded well below average volume. Expect volume to increase on Tuesday and Wednesday while staying below average. The markets are closed on Thursday, New Year's Day. Year end tax selling will be finished on Wednesday and it will be interesting to see what instiutions will do next week. The broad indices continue to trade inside their sideways trading range. Friday which was the lightest full day trading volume this year, was just slightly ahead of Wednesday's half day volume. Monday's volume in many cases was ahead of Friday and just half of average volume. The Chart Signals suggest a greater probability of a rising market after the first of the year, however traders need to stay focued on what the market is doing. $SOX finished near unchanged which is a sign of strength on a down day. Individual semiconductor stocks like MRVL, BRCM, TXN and ALTR are exhibiting basing pattern formations and potential trend reversal. Stocks to Watch on Tuesday Leading Stocks: Holding Above 30 DMA AYE…PCLNBAPDLTRFLR…JCOM…JEC…PCR…ATK…B…IRIS…SNA…WMS…HAS…JOSB…AMZN…BIIB…BYI…HDB…LFC…PSSI…CERN…FWLT…MTW…QSII…VMI…OI…CHU…FLS…BCO…NDAQ…ROST…VIVO…AET…ESRX…UTX…APH…CAM…CCC…CIR…CL…DECK…DV…EPR…ESI…GES…GILD…JW.A…MYGN…NOV…ACL…BLUD…DNA…HLF…OSIP…AGN…KEX…LAYN…RCI…CELG…NEU…PSYS…RIO…SHW…AMED…PETS…SOHU…SPTN Moving Above 30 DMA = 6 BCR…CAM…FLIR…NGS…NOV…SPN…WAB Moving Below 30 DMA = 9 AMX…ANSS…CBST…CTSH…FSTR…GME…NIHD…PCP…PPD Staying Below 30 DMA SWN…MMM…STRA…AME…GIS…PTNR…TECH…AXYS…MON…MTD…URBN…ICLR…LNN...AAPL…TECH…EZPW…MCRS…MOS…POT…PPD…RTN…SINA…TEVA…WCG…AFAM…MBT…PRGO…RIMM… CHTT…NILE Monday’s Action Moving Up: POT, AEM, AGU, MOS, IPI, SOHU, AFAM, FSLR, MON, GDX Moving Down: MA, V, CLF, NUE, KMT, NIHD, ESRC, SINA, LAMR, NDAQ, ANR, GRMN, HANS Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Down

Friday, December 26, 2008

Markets Move Higher on Light Volume

DJIA + 47.07, +0.56% SP500 + 4.65, +0.54% NASDAQ Comp. + 5.34, +0.35% Russell 2000 + 6.28, +1.33% Exchange NYSE NASD Advancing 2,310 1,702 Declining 792 1,102 Oil $37.71 +$2.36 Gold $870.50 +$23.20 SOX 202.00 -0.89 VIX 43.38 -0.83 Strongest Sectors: XLE +1.35%...XLB +1.23%...XLY +1.12% Weakest Sectors: XLK -0.13%...XLV +0.08%...XLF +0.09% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK Down Trending: XLF Stocks traded very light volume on Friday as expected. Volume was slightly above the volume on Christmas Eve which was just a half day of trading. Expect some year end tax selling next week through New Years Eve on Wednesday. Next week is again a holiday shortened week with the markets closed Thursday for New Years Day. Stocks to Watch on Monday Leading Stocks: Holding Above 30 DMA AYE…PCLN…BAP…DLTR…FLR…JCOM…JEC…PCR…ATK…B…IRIS…SNA…WMS…HAS…JOSB…AMZN…BIIB…BYI…HDB…LFC…PSSI…AMX…CERN…FWLT…MTW…QSII…VMI…OI…CHU…FLS…BCO…NDAQ…ROST…VIVO…AET…ESRX…UTX…APH…CAM…CCC…CIR…CL…DECK…DV…EPR…ESI…GES…GILD…JW.A…MYGN…NOV…PCP…ACL…BLUD…DNA…HLF…OSIP…AGN…KEX…LAYN…RCI…CELG…NEU…ANSS…CBST…GME…NIHD…PSYS…RIO…SHW Moving Above 30 DMA = 6 AMED…CTSH…FSTR…PETS…SOHU…SPTN Moving Below 30 DMA = 3 CHTT…FLIR…NILE Staying Below 30 DMA SWN…MMM…STRA…BCR…AME…GIS…PTNR…TECH…AXYS…MON…MTD…URBN…ICLR…LNN...AAPL…TECH…EZPW…MCRS…MOS…NGS…POT…PPD…RTN…SINA…SPN…TEVA…WCG…WAB…AFAM…MBT…PRGO…RIMM Friday’s Action Moving Up: BTU, GDX, NUE, POT, MOS, X, AGU, CLF, FSLR, CNX, SOHU, IPI, ESRX, MEE, SCHN, SINA, AEM Moving Down: STRA, AFAM, MA, PCLN, INFY Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Down

Thursday, December 25, 2008

It Is Now the Wee Hours of Christmas Morning...

and I am pondering one of my favorite passages from Charles Dickens’ A Christmas Carol. It was this same time of night when Scrooge was approached by the ghost of his partner Jacob Marley: “’But you were always a good man of business, Jacob,’ faltered Scrooge, who now began to apply this to himself. “Business!” cried the Ghost, wringing its hands again. “Mankind was my business; charity, mercy, forbearance, and benevolence were, all, my business. The dealings of my trade were but a drop of water in the comprehensive ocean of my business! May we all, like Scrooge, learn to live in the present to make a better future for everyone with whom we associate. May a positive spirit of change and improvement bless your life this day and every day during the coming New Year! Merry Christmas and Happy New Year!

Wednesday, December 24, 2008

Markets Move Higher on Christmas Eve

DJIA + 48.99, +0.58% SP500 + 2.26, +0.26% NASDAQ Comp. + 3.36, +0.22% Russell 2000 + 1.85, +0.39% Exchange NYSE NASD Advancing 2,150 1,441 Declining 1,489 1,284 Oil $35.35 -$3.63 Gold $847.30 +$9.90 SOX 202.89 +2.02 VIX 44.21 -0.81 Strongest Sectors: XLF +2.17%...XLP +0.87%...XLY +0.73% Weakest Sectors: XLE -0.38%...XLV -0.35%...XLB +0.09% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK Down Trending: XLF The broad indices rose on light volume in a half day of trading on Wednesdy. Next week will be a holiday shortened trading week also. The VIX confirmed the SPX move up on Wednesday. Stocks to Watch on Friday Leading Stocks: Holding Above 30 DMA AYE…PCLN…BAP…DLTR…FLR…JCOM…JEC…PCR…ATK…B…IRIS…SNA…WMS…HAS…JOSB…AMZN…BIIB…BYI…HDB…LFC…PSSI…AMX…CERN…FWLT…MTW…QSII…VMI…OI…CHU…FLS…BCO…NDAQ…ROST…VIVO…AET…ESRX…UTX…APH…CAM…CCC…CIR…CL…DECK…DV…EPR…ESI…GES…GILD…JW.A…MYGN…NILE…NOV…PCP…ACL…BLUD…DNA…HLF…OSIP…AGN…CHTT…KEX…LAYN…RCI… CELG…NEU Moving Above 30 DMA = 8 ANSS…CBST…FLIR…GME…NIHD…PSYS…RIO…SHW Moving Below 30 DMA = 4 AFAM…MBT…PRGO…RIMM Staying Below 30 DMA SWN…MMM…PETS…STRA…BCR…AME…GIS…PTNR…TECH…AXYS…MON…MTD…URBN…ICLR…LNN...AAPL…TECH…CTSH…EZPW…FSTR…MCRS…MOS…NGS…POT…PPD…RTN…SINA…SOHU…SPN…TEVA…WCG… SPTN…WAB Wednesday’s Action Moving Up: MON, GS Moving Down: FSLR, AFAM, ANR, POT, SCHN, BTU, CLF, ESRX, V Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Down

Tuesday, December 23, 2008

Indices Move Lower on Christmas Eve Eve

DJIA - 100.28, -1.18% SP500 - 8.47, -0.97% NASDAQ Comp. - 10.81, -0.71% Russell 2000 - 6.43, -1.35% Exchange NYSE NASD Advancing 1,497 1,052 Declining 2,307 1,846 Oil $38.98 -$0.93 Gold $837.40 -$9.80 SOX 200.87 -5.79 VIX 45.02 +1.03 Strongest Sectors: XLE +0.22%...XLV +0.04%...XLI -0.31% Weakest Sectors: XLF-2.37%...XLK -1.39%...XLU -1.14% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK Down Trending: XLF On the eve of Christmas Eve the broad indices moved lower on light volume. As we said in our webcast Monday evening we expected price action to be somewhat random on lighter volume on this holiday shortened week. Buyers and sellers alternating control during each trading day and that is what essentially happened on Tuesday. NYSE volume was less than 1 billion shares which is the lowest full day volume since August. Even though the broad indices were down a fair number of the stocks in our watch lists moved higher. There were more NYSE and Nasdaq advancers and fewer decliners on Tuesday than on Monday. DECK fell 3 cents holding in the $76 horizontal resistance area. PCLN rallied 6.55% moving back to the $70 horizontal resistance area on Tuesday forming a bullish engulfing pattern after Monday’s pull back. We wish you and yours a Merry Christmas and Happy Holidays! Index Commentary The DJIA did not confirm Monday’s hammer and stayed above Monday’s low and its 20 and 30 DMA. The SPX, Nasdaq and RUT all formed an inside day. The market will only be open a half day on Christmas Eve. Expect volume to be light. Stocks to Watch on Wednesday Leading Stocks: Holding Above 30 DMA AYE…PCLN…BAP…DLTR…FLR…JCOM…JEC…PCR…ATK…B…IRIS…SNA…WMS…HAS…JOSB…AMZN…BIIB…BYI…HDB…LFC…PSSI…AMX…CERN…FWLT…MTW…QSII…VMI…OI…CHU…FLS…BCO…NDAQ…ROST…VIVO…AET…ESRX…UTX…APH…CAM…CCC…CIR…CL…DECK…DV…EPR…ESI…GES…GILD…JW.A…MYGN…NILE…NOV…PCP…ACL…BLUD…DNA…HLF…OSIP…AGN…CHTT…RIMM… KEX…LAYN…RCI Moving Above 30 DMA = 5 AFAM…CELG…MBT…NEU…PRGO Moving Below 30 DMA = 5 ANSS…GME…PSYS…SPTN…WAB Staying Below 30 DMA SWN…MMM…FLIR…PETS…STRA…BCR…AME…GIS…PTNR…TECH…AXYS…MON…MTD…URBN…ICLR…LNN...AAPL…TECH…SHW…CBST…CTSH…EZPW…FSTR…MCRS…MOS…NGS…NIHD...POT…PPD…RIO…RTN…SINA…SOHU…SPN…TEVA…WCG Tuesday’s Action Moving Up: PCLN, FSLR, POT, SCHN, NUE, ONXX, AEM, AFAM, CF, CLF, HANS, GDX, AGU Moving Down: MA, PNRA, SINA, GS, ESRX, BRCM, ZION Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Down

Monday, December 22, 2008

Stocks Drift Lower to Start Holiday Shortened Week

DJIA - 59.42, -0.69% SP500 - 16.25, -1.83% NASDAQ Comp. - 31.97, -2.04% Russell 2000 - 11.19, -2.30% Exchange NYSE NASD Advancing 1,176 981 Declining 2,676 1,908 Oil $39.91 -$2.45 Gold $847.20 +$9.80 SOX 206.66 -5.18 VIX 44.56 -0.82 Strongest Sectors: XLP -0.95%...XLV -2.07%...XLU -2.20% Weakest Sectors: XLB -4.96%...XLF -4.58%...XLE -4.24% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK Down Trending: XLF February oil prices fell as oil trading rotated to the February contracts today after expiration of the January contract on Friday. The VIX again did not confirm the move down in the SPX. Look for lighter volume this holiday shotened week with a partial trading day on Wednesday, Christmas Eve and no trading on Thursday, December 25 Christmas day. Expect sellers and buyers to each take their turn moving stock prices this week and next. At this point a continuation of the current trading range betwee support and resistance are expected to continue. (click images to enlarge) ProphetCharts Index Commentary The DJIA formed a hammer at the 30 DMA after Friday’s inverted hammer. The SPX fell below its 30 DMA and then bounced 14 points to close down but above it s30 DMA. Friday’s inverted hammer did not confirm. The Nasdaq fewll to its 30 DMA and bounced 29 points to close above its 30 DMA and below its 50 DMA. The RUT formed a bearish engulfing pattern with a lower shadow as the RUT bounced off its 30 DMA and rose 15 points in the last half hour of trading to closed 5 points below its 50 DMA. Many of our Holding Above 30 DMA stocks are in bull flag pullbacks! Stocks to Watch on Tuesday Leading Stocks: Holding Above 30 DMA AYE…PCLN…BAP…DLTR…FLR…JCOM…JEC…PCR…ATK…B…IRIS…SNA…WMS…HAS…JOSB…AMZN…BIIB…BYI…HDB…LFC…PSSI…AMX…CERN…FWLT…GME…MTW…QSII…VMI…WAB…OI…CHU…FLS…MBT…BCO…NDAQ…ROST…VIVO…AET…ESRX…UTX…ANSS…APH…CAM…CCC…CIR…CL…DECK…DV…EPR…ESI…GES…GILD…JW.A…MYGN…NILE…NOV…PCP…SPTN…ACL…BLUD…DNA…HLF…OSIP…PSYS… AGN…CHTT…RIMM Moving Above 30 DMA = 3 KEX…LAYN…RCI Moving Below 30 DMA = 20 CBST…CELG…CTSH…EZPW…FSTR…MCRS…MOS…NEU…NGS…NIHD..POT…PPD…PRGO…RIO…RTN…SINA..SOHU..SPN…TEVA…WCG Staying Below 30 DMA SWN…MMM…FLIR…PETS…STRA…BCR…AME…GIS…PTNR…TECH…AXYS…AFAM…MON…MTD…URBN…ICLR…LNN...AAPL…MBT…TECH…SHW Monday’s Action Moving Up: STRA Moving Down: MA, FSLR, POT, MON, SINA, CNX, GS, X, MOS, PCLN, CLF, PNRA, CF, ZION, SOHU, ANR, AGU, BTU, FWLT, MEE, NUE, V, ESRX, IPI, KMT, AEM, GDX, HANS, AFAM ADM, KRE, NIHD, MS, COH, LAMR, SCHN, NDAQ, KBE Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Down

Friday, December 19, 2008

Stocks Stablilize as Auto Industries Receives Help

DJIA - 25.88, -0.30% SP500 + 2.60, +0.29% NASDAQ Comp. + 11.95, +0.77% Russell 2000 + 7.09, +1.48% Exchange NYSE NASD Advancing 2,276 1,451 Declining 1,540 1,506 Oil $33.87 -$2.35 Gold $837.40 -$23.20 SOX 211.84 +2.89 VIX 44.93 -2.41 Strongest Sectors: XLK +0.33%...XLI +0.13%...XLV +0.00% Weakest Sectors: XLB -3.23%...XLF -1.69%...XLP -1.65% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK Down Trending: XLF The DJIA slipped 25 points as the SPX, Nasdaq and RUT rose on Friday as a financial lifeline was extended to GM and Chrysler. Ford said they did not need cash at this time. Thursday's falling VIX while the SPX also fell appears to again given a clue to Friday's positive market movement. DECK rose for its fourth straight day on Friday $2.72 or 3.71%. PCLN fell just 85 cents on Friday at a key resistance level of $85. Watch for potential breakout beginning on Monday. (click images to enlarge)
Index Commentary The DJIA formed an inverted hammer closing above its 30 DMA and below its 50 DMA. The SPX and Nasdaq are both forming a pennant pattern since Tuesday and closed just below their 50 DMA and above their 20 and 30 DMA. ProphetCharts The RUT closed above its 50 DMA for the second time in three days while holding above its 20 and 30 DMA. Stocks to Watch on Monday Leading Stocks: Holding Above 30 DMA AYE…EZPW…PCLN…BAP…DLTR…FLR…FSTR…JCOM…JEC…PCR…ATK…B…IRIS…RTN…SNA…WMS…HAS…JOSB…AMZN…BIIB…BYI…HDB…LFC…PSSI…AMX…CERN…FWLT…GME…MTW…NEU…QSII…VMI…WAB…OI…PPD…CHU…FLS…MBT…RIO…BCO…MOS…NDAQ…ROST…VIVO…AET…ESRX…NGS…POT…UTX…ANSS…APH…CAM…CCC…CIR…CL…DECK…DV…EPR…ESI…GES…GILD…JW.A…MYGN…NIHD…NILE…NOV…PCP…SINA…SPTN…TEVA…ACL…BLUD…CBST…DNA…HLF…SOHU…CELG…OSIP…PRGO…PSYS Moving Above 30 DMA = 7 AGN…CHTT…CTSH…MCRS…RIMM…SPN…WCG
Moving Below 30 DMA = 2 LAYN…SHW Staying Below 30 DMA SWN…MMM…FLIR…PETS…STRA…BCR…AME…GIS…PTNR…TECH…AXYS…RCI…AFAM…MON…MTD…URBN…ICLR…LNN... AAPL…MBT…TECH… KEX Friday’s Action Moving Up: MA, AEM, FSLR, ESRX, ONXX, KMT, GDX Moving Down: STRA, MON, CF, POT, FWLT, AGU, MOS, IPI, ZION, CLF, PCLN, MS, COH Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Neutral

Thursday, December 18, 2008

Stocks Fall Over Economic, Auto and Oil Concerns

DJIA - 219.35, -2.49% SP500 - 19.14, -2.12% NASDAQ Comp. - 26.94, -1.71% Russell 2000 - 7.42, -1.52% Exchange NYSE NASD Advancing 1,573 1,097 Declining 2,268 1,777 Oil $36.22 -$3.84 Gold $860.60 -$7.90 SOX 208.95 -12.21 VIX 47.34 -2.50 Strongest Sectors: XLU +0.84%...XLV +0.73%...XLP +0.34% Weakest Sectors: XLE -5.82%...XLB -3.84%...XLI -3.51% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK Down Trending: XLF The DJIA, SPX, Nasdaq and RUT fell during the last 3 hours of trading over continued economic woes, concerns in the auto industry and falling oil prices impact on oil stocks. Once again the VIX did not confirm the drop in the SPX today as the VIX also moved lower to 47.34. Typically this suggests fear is falling which generally is short-term bullish. We will stay tuned on Friday to see if a rally occurs or if the VIX gets rises. Oil closes under $40 for the first time since 2004. Falling demand from global recession continues to fuel the drop in oil prices not withstanding OPEC’s move to cut production. DECK rose again on Thursday 2.67 or 3.78%. PCLN fell just 21 cents on Thursday. Index Commentary The DJIA, SPX, Nasdaq and RUT all closed below their 50 DMAs and above their 20 and 30 DMAs. Stocks to Watch on Friday Leading Stocks: Holding Above 30 DMA AYE…EZPW…PCLN…BAP…DLTR…FLR…FSTR…JCOM…JEC…PCR…ATK…B…IRIS…RTN…SNA…WMS…HAS…JOSB…AMZN…BIIB…BYI…HDB…LFC…PSSI…AMX…CERN…FWLT…GME…MTW…NEU…QSII…VMI…WAB…OI…PPD…CHU…FLS…MBT…RIO…BCO…MOS…NDAQ…ROST…SHW…VIVO…AET…ESRX…NGS…POT…UTX…ANSS…APH…CAM…CCC…CIR…CL…DECK…DV…EPR…ESI…GES…GILD…JW.A…MYGN…NIHD…NILE…NOV…PCP…SINA…SPTN…TEVA… ACL…BLUD…CBST…DNA…HLF…SOHU Moving Above 30 DMA = 5 CELG…LAYN…OSIP…PRGO…PSYS Moving Below 30 DMA = 3 AGN…KEX…SPN Staying Below 30 DMA SWN…MMM…FLIR…PETS…STRA…BCR…AME…CHTT…GIS…PTNR…TECH…AXYS…RCI…AFAM…MON…MTD…URBN…ICLR…CTSH…LNN...MCRS… AAPL…MBT…TECH Thursday’s Action Moving Up: STRA, GS, HANS Moving Down: POT, X, ANR, CF, NUE, FSLR, CNX, GDX, AEM, SCHN, BTU, FWLT, MOS, AGU, MEE, GRMN, CLF, BRCM, MON, PNRA Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Down

Wednesday, December 17, 2008

RUT Rises, DJIA, SPX and Nasdaq Pullback While VIX Falls

DJIA - 99.80, -1.12% SP500 - 8.76, -0.96% NASDAQ Comp. - 10.58, -0.67% Russell 2000 + 3.74, +0.77% Exchange NYSE NASD Advancing 2,267 1,496 Declining 1,566 1,377 Oil $40.06 -$3.54 Gold $867.50 +$25.80 SOX 221.16 -0.35 VIX 49.84 -2.53 Strongest Sectors: XLY +0.55%...XLB +0.08%...XLI +0.04% Weakest Sectors: XLU -3.03%...XLK -1.94%...XLF -0.93% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK Down Trending: XLF The DJIA, SPX and Nasdaq pulled back on Wednesday while holding above the S1 level of Tuesday’s large white candle. The VIX did not confirm the down move in the SPX today as the VIX also moved lower to 49.84, just the second close below 50 in the past 10 weeks. This has bullish implications as it suggests fear did not rise as the SPX fell. The SOX was stronger that the Nasdaq today suggesting a lack of weakness in semiconductors. Also a review of the charts on the SPDR sector ETFS shows eight of the nine sectors have changed from down to neutral trend. We’ll continue to watch the sectors for a break above resistance to see if any of the trends move into an intermediate term uptrend. Oil fell another 3.54 to close at a new 52-week low 0f $40.06 as OPEC announced another 2.2 million bpd production cut effective Jan. 1. OPEC members have a reputation for exceeding production quotas, so some are skeptical about members honoring the cuts. Oil’s drop in price since July is being fueled by demand destruction from global recession factors. DECK one of Friday’s support bounce Stocks to Watch moved up another 3.49 or 5.2%. PCLN rose 4.32% on Wednesday. We placed an at support above the 20, 30 and 50 DMA entry on a real time virtual trade in our Dec. 10 webcast. We purchased 10 Jan 70 calls for 2.85. The close mark for Wednesday was $5.65, a 98% gain in just one week. Dave is teaching a two day Advanced Technical Analysis Workshop in Orlando. Index Commentary The DJIA formed a bearish harami that stayed above Tuesday’s S1 support level while closing for the second straight day above its 50 DMA. The SPX formed a bearish harami that found buyers just above Tuesday’s S1 level and again closed above its 50 DMA. The Nasdaq formed a white spinning top bearish harami that held above Tuesday’s S1 support level and fell just below its 50 DMA. The RUT moved higher forming a white spinning top and closed above its 50 DMA for the first time since Sep. 22. Stocks to Watch on Thursday Leading Stocks: Holding Above 30 DMA AYE…EZPW…PCLN…BAP…DLTR…FLR…FSTR…JCOM…JEC…PCR…ATK…B…IRIS…RTN…SNA…WMS…HAS…JOSB…AMZN…BIIB…BYI…HDB…LFC…PSSI…AMX…CERN…FWLT…GME…MTW…NEU…QSII…VMI…WAB…OI…PPD…CHU…FLS…MBT…RIO…BCO…MOS…NDAQ…ROST…SHW…VIVO…AET…ESRX…NGS…POT…UTX…AGN…ANSS…APH…CAM…CCC…CIR…CL…DECK…DV…EPR…ESI…GES…GILD…JW.A…KEX…MYGN…NIHD…NILE…NOV…PCP…SINA…SPN…SPTN…TEVA Moving Above 30 DMA = 6 ACL…BLUD…CBST…DNA…HLF…SOHU Moving Below 30 DMA = 3 AAPL…MBT…TECH Staying Below 30 DMA LAYN…OSIP…SWN…MMM…FLIR…PETS…STRA…BCR…AME…CHTT…GIS…PRGO…PTNR…TECH…AXYS…RCI…AFAM…MON…MTD…URBN… ICLR…CTSH…LNN...MCRS Wednesday’s Action Moving Up: FSLR, POT, GS, PCLN, STRA, SCHN, CLF, HANS, NUE, SOHU, PNRA, CNX, X, MOS, FWLT, ANR, IPI, COH, INFY, ONXX Moving Down: ESRX, NDAQ Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Down

Tuesday, December 16, 2008

Friday's Higher Low Support Bounce Follows Through...Indices Close Above 50 DMA

DJIA + 359.15, +4.20% SP500 + 44.61, +5.14% NASDAQ Comp. + 81.55, +5.41% Russell 2000 + 30.28, +6.69% Exchange NYSE NASD Advancing 3,274 2,278 Declining 604 660 Oil $43.60 -$0.91 Gold $841.70 +$6.30 SOX 221.51 +12.29 VIX 52.37 -4.39 Strongest Sectors: XLF +11.18%...XLB +6.12%...XLY +5.32% Weakest Sectors: XLP +2.34%...XLE +3.10%...XLU +3.41% Sector Watch Up Trending: Sideways: XLE, XLP, XLU Down Trending: XLF, XLY, XLV, XLI, XLB, XLK The FOMC lowered the Fed Funds rate on Tuesday giving catalyst to the continuation of the short-term up trend that has been in place for the past three weeks, forming an inverse head and shoulders pattern and a bull flag before today. The stocks we posted comments on Friday and suggested on Monday to watch bounced with above average returns today: ANSS +6.50%, EPR +18.18%, NDAQ +12.66%, DECK +7.96%, NILE +7.25%. Also on Monday we highlighted DIA which rose 4.16% today. Also last week we posted on XLF as the strongest sector of the past three weeks rose 11.18% today. Index Commentary The DJIA confirmed Friday’s hammer and bullish harami while closing above its 50 DMA. The SPX confirmed Friday’s hammer closing above its 50 DMA. The Nasdaq confirmed its piercing line pattern bouncing off its higher low and closing just above its 50 DMA. The RUT confirmed Friday’s piercing line pattern while bouncing off its higher low and closing just below its 50 DMA. Stocks to Watch on Wednesday Leading Stocks: Holding Above 30 DMA AYE…EZPW…PCLN…BAP…DLTR…FLR…FSTR…JCOM…JEC…PCR…ATK…B…IRIS…RTN…SNA…WMS…HAS…JOSB…AMZN…BIIB…BYI…HDB…LFC…PSSI…AMX…CERN…FWLT…GME…MTW…NEU…QSII…VMI…WAB…OI…PPD…CHU…FLS…MBT…RIO…AAPL…BCO…MOS…NDAQ…ROST…SHW…VIVO… AET…ESRX…NGS…POT…UTX Moving Above 30 DMA = 26 AGN…ANSS…APH…CAM…CCC…CIR…CL…DECK…DV…EPR…ESI…GES…GILD…JW.A…KEX…MBT…MYGN…NIHD…NILE…NOV…PCP…SINA…SPN…SPTN…TECH…TEVA Moving Below 30 DMA = 0 None Staying Below 30 DMA LAYN…OSIP…SOHU…SWN…MMM…FLIR…PETS…STRA…BCR…ACL…AME…CBST…CHTT…GIS…PRGO…PTNR…TECH…AXYS…RCI…AFAM…HLF…MON…MTD…URBN… ICLR…CTSH…LNN...MCRS Tuesday’s Action Moving Up: FSLR, GS, POT, MA, STRA, CF, PCLN, MON, MOS, AGU, X, NDAQ, PNRA, AEM, ADM, GDX, SCHN, KBE, ZION, NUE, ESRX, MS, SOHU, V, CNX, HANS, SINA, KRE, CLF, KMT, ONXX, NIHD, EBAY, COH, IPI, GRMN, BTU, FWLT, MEE, AFAM, BRCM, LAMR, LCC, UAUA, Moving Down: None Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Down

Monday, December 15, 2008

Markets Give Back Friday's Gains

DJIA - 65.15, -0.75% SP500 - 11.16, -1.27% NASDAQ Comp. - 32.38, -2.10% Russell 2000 - 15.86, -3.39% Exchange NYSE NASD Advancing 1,098 724 Declining 2,722 2,134 Oil $44.51 -$1.77 Gold $835.40 +$16.50 SOX 209.22 -3.72 VIX 56.76 +2.48 Strongest Sectors: XLI -0.04%...XLP -0.09%...XLV -0.20% Weakest Sectors: XLF -4.12%...XLU -1.56%...XLK -1.11% Sector Watch Up Trending: Sideways: XLE, XLP, XLU Down Trending: XLF, XLY, XLV, XLI, XLB, XLK Stock indices pulled back on Monday and held above support. As we stated Friday, watch for confirmation of Friday's support bounce...well, confirmation did not occur. So continue to watch on Tuesday. Watch for any breaks of support that would indicate equities are headed back to the lower end of the trading range of the past 9 weeks before they are headed higher.

As long as charts stay above their recent break outs of inverse head and shoulders, double bottoms and other reversal patterns, look for short-term entry to the upside.

Watch the stocks we mentioned in Friday's post for support bounce follow through and our Stocks to Watch for Tuesday list.

Index Commentary

The DJIA did not confirm Friday's hammer and bullish harami...formed an inside day while clsoing just below its 30 DMA.

The SPX did not confirm Friday's hammer as formed a black spinning top with a higher low while closing just below its 30 DMA.

The Nasdaq did not confirm Friday's piercing line pattern while making a higher low and closing below its 30 DMA.

The RUT did not confirm Friday's piercing line pattern while making a higher low and closing below its 30 DMA.

ProphetCharts

Stocks to Watch on Tuesday Leading Stocks: Holding Above 30 DMA AYE…EZPW…PCLN…BAP…DLTR…FLR…FSTR…JCOM…JEC…PCR…ATK…B…IRIS…RTN…SNA…WMS…HAS…JOSB…AMZN…BIIB…BYI…HDB…LFC…PSSI…AMX…CERN…FWLT…GME…MTW…NEU…QSII…VMI…WAB…OI…PPD…CHU…FLS…MBT…RIO…AAPL…BCO…MOS…NDAQ…ROST…SHW…VIVO Moving Above 30 DMA = 5 AET…ESRX…NGS…POT…UTX Moving Below 30 DMA = 12 ANSS...CCC…CTSH…DECK…DV…EPR…GILD…JW.A…LNN...MCRS…NIHD…NILE Staying Below 30 DMA DGIT…LAYN…NOV…OSIP…SINA…SOHU…SWN…MMM…FLIR…PETS…SPTN…STRA…BCR…CL…ACL…AIRM…AME…CBST…CHTT…GIS…MYGN…PRGO…PTNR…TECH…AXYS…PRXL…RCI…AFAM…AGN…CAM…ESI…HLF…MON…MTD…PCP…POT…TEVA…URBN… ICLR…MBT Monday’s Action Moving Up: AEM, POT GDX, ESRX, PNRA, ANR Moving Down: STRA, FSLR, PCLN, AFAM, SOHU, CLF, ZION, CF, NIHD, LAMR, X, SCHN, NDAQ, GS, MEE, KBE, NUE, KRE, Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Down

Friday, December 12, 2008

Higher Low Support Bounce - Bullish Continuation

DJIA + 64.59, +0.75% SP500 + 6.14, +0.70% NASDAQ Comp. + 32.84, +2.18% Russell 2000 + 17.22, +3.82% Exchange NYSE NASD Advancing 2,278 1,941 Declining 1,518 902 Oil $46.28 -$1.70 Gold $818.90 -$6.00 SOX 212.94 +9.57 VIX 54.28 -1.50 Strongest Sectors: XLF +1.93%...XLK +1.19%...XLU +0.63% Weakest Sectors: XLE -0.98%...XLY -0.33%...XLP +0.13% Sector Watch Up Trending: Sideways: XLE, XLP, XLU Down Trending: XLF, XLY, XLV, XLI, XLB, XLK This was an interesting week with plenty of bad news that threatened to send the market lower. We saw some interesting non-confirmations from the VIX on Monday suggesting a pullback on Tuesday and on Thursday suggesting a rally on Friday both non-confirmation signals were successful. The SOX and the momentum line were also helpful in staying focused on the chart and see through the smoke screen being created by the news. In the end the market formed a higher low and is showing many positive breakouts in the indices and the stocks in our watchlists. We posed the question on October 10…”Was this the beginning of the end?” We also stated that if it was the market would take at least 4 to 8 weeks before it would likely be ready to go up. After 9 weeks it continues to appear that Oct. 10 may have been the beginning of the end. And while the markets are at best in a neutral trading range, they are showing signs of higher lows with bullish potential.

This is the time to watch closely leading stocks that are breaking above their 30 DMA and making higher lows for bullish trading opportunities. Watch our Stocks to Watch list each day for stocks closing above their 30 DMA.

Index Commentary The DJIA formed a hammer and bullish harami while making a higher low on Friday as it closed above its 30 DMA. The SPX formed a hammer as it made a higher low closing just below its 30 DMA. The Nasdaq formed a piercing line pattern while making a higher low and closing just above its 30 DMA. The RUT formed a formed a piercing line pattern while making a higher low and closing just above its 30 DMA. Watch for confirmation of these bullish candle patterns in the indices on Monday. Stocks to Watch on Monday Leading Stocks: Holding Above 30 DMA AYE…EZPW…PCLN…BAP…DLTR…FLR…FSTR…JCOM…JEC…PCR…ATK…B…IRIS…RTN…SNA…WMS…HAS…JOSB…AMZN…BIIB…BYI…HDB…LFC…MCRS…PSSI…AMX…CERN…FWLT…GME…MTW…NEU…NIHD…QSII…VMI…WAB…OI…PPD…CHU…FLS…MBT…RIO Moving Above 30 DMA = 17 AAPL…ANSS…BCO…CCC…CTSH…DECK…DV…EPR…GILD…JW.A…LNN…MOS…NDAQ…NILE…ROST…SHW…VIVO Bullish Engulfing Pattern (click images to enlarge) Piercing Line Pattern Bull Flag Pattern ProphetCharts Moving Below 30 DMA = 3 ESRX…ICLR…MBT Staying Below 30 DMA DGIT…LAYN…NOV…OSIP…SINA…SOHU…SWN…MMM…FLIR…PETS…SPTN…STRA…BCR…CL…ACL…AIRM…AME…CBST…CHTT…GIS…MYGN…PRGO…PTNR…TECH…AXYS…PRXL…RCI…AFAM…AGN…CAM…ESI…HLF…MON…MTD…PCP…POT…TEVA…URBN Friday’s Action Moving Up: STRA, PCLN, AEM, PNRA, X, POT, CLF, IPI, BRCM, KRE, AFAM, HANS, SINA, NUE, V, KMT, SCHN, AGU, NDAQ Moving Down: MON, ZION, GS, ADM, BTU Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Down

Thursday, December 11, 2008

Markets Gap Down, Rally and Then Fall, So...

DJIA - 196.33, -2.24% SP500 - 25.65, -2.85% NASDAQ Comp. - 57.60, -3.68% Russell 2000 - 25.19, -5.29% Exchange NYSE NASD Advancing 998 732 Declining 2,834 2,113 Oil $47.98 +$4.46 Gold $824.90 +$17.80 SOX 203.37 -5.20 VIX 55.78 -0.05 Strongest Sectors: XLV +0.60%...XLE -0.47%...XLU -0.79% Weakest Sectors: XLF -7.68%...XLB -4.32%...XLI -4.31% Sector Watch Up Trending: Sideways: XLE, XLP, XLU Down Trending: XLF, XLY, XLV, XLI, XLB, XLK Markets gap down, rally and then fall, so...what else is new! Intra-day volatility continues in this intermediate term sideways trading range. Concern over passage of the Auto industry aid seemed to push stocks lower during afternoon trading. The VIX was only up slightly at the close suggesting the potential for a rally on Friday. Futures, however, fell even further in evening trading.
The DJIA, SPX, Nasdaq and RUT fell below the low of their high day breaking short-term support.

ProphetCharts

Stocks to Watch on Friday Leading Stocks: Holding Above 30 DMA AYE…EZPW…PCLN…BAP…DLTR…FLR…FSTR…JCOM…JEC…PCR…ATK…B…IRIS…RTN…SNA…WMS…HAS…JOSB…AMZN…BIIB…BYI…ESRX…HDB…LFC…MCRS…PSSI…AMX…CERN…FWLT…GME…ICLR…MTW…NEU…NIHD…QSII…VMI…WAB…OI…PPD…CHU…FLS…MBT…RIO
Moving Above 30 DMA = 0 None Moving Below 30 DMA AAPL…AFAM…AGN…ANSS…CAM…CCC…CTSH…DECK…EPR…ESI…GILD…HLF…JW.A…MON…MOS…MTD…NDAQ…NILE…PCP…POT…ROST…SHW…TEVA…URBN…VIVO

Staying Below 30 DMA DGIT…LAYN…NOV…OSIP…SINA…SOHU…SWN…MMM…FLIR…PETS…SPTN…STRA…BCR…CL…DV…ACL…AIRM…AME…CBST…CHTT…GIS…MYGN…PRGO…PTNR…ROST…TECH… AXYS…PRXL…RCI Thursday’s Action Moving Up: SINA Moving Down: MON, MA, POT, MOS, CF, PNRA, CLF, FSLR, AFAM, STRA, PCLN, KRE, ZION, ESRX, KMT, LAMR, INFY, CNX, COH, V, GS, KKBE, SCHN, NDAQ, ANR, BTU, AGU, GRMN, FWLT, MEE, NIHD, UAUA, MS, SOHU, LCC, NUE Intermediate Term Market Trend: Neutral – DJIA, SPX, Down – Nasdaq, RUT Short Term Market Trend: Down

Wednesday, December 10, 2008

Indices Rise in Pennant Pattern

DJIA + 70.09, +0.81% SP500 + 10.57, +1.19% NASDAQ Comp. + 18.14, +1.17% Russell 2000 + 10.69, +2.30% Exchange NYSE NASD Advancing 2,696 1,841 Declining 1,146 1,003 Oil $43.52 +$1.45 Gold $807.10 +$34.70 SOX 208.57 +2.92 VIX 55.73 -3.18 Strongest Sectors: XLE +5.17%...XLB +3.09%...XLY +2.33% Weakest Sectors: XLF -1.75%...XLK -0.83%...XLV -0.26% Sector Watch Up Trending: Sideways: XLE, XLP, XLU Down Trending: XLF, XLY, XLV, XLI, XLB, XLK (click images to enlarge) On Wednesday XLE was again the strongest sector and XLF the weakest. XLF is in a bull flag pattern. Stocks rallied after Tuesday's pullback. The VIX fell over 5% confirming the move up in the SPX. The SOX gained slightly more than the Nasdaq. These combined with the red momentum line in the lower reversal zone for the second straight day suggest the potential for a continued rise on Thursday. Also the pennant on the DJIA and SPX is a short-term continuation pattern with a greater probability to breakout to the upside. Index Commentary The DJIA formed a bearish harami that did not confirm Tuesday’s bearish harami…forming a pennant since Monday…held just above its 30 DMA. The SPX formed a bearish harami that did not confirm Tuesday’s bearish harami…forming pennant since Monday …closed just above its 30 DMA. ProphetCharts The Nasdaq formed a doji that did not confirm Tuesday’s tombstone doji…formed inside day…closed just above its 30 DMA. The RUT formed a bearish harami that did not confirm Tuesday’s bearish harami/shooting star-like pattern…formed an inside day…closed just above its 30 DMA. Stocks to Watch on Thursday Leading Stocks: Holding Above 30 DMA AYE…EZPW…PCLN…BAP…DLTR…ESI…FLR…FSTR…JCOM…JEC…PCR…ATK…IRIS…MIG…RTN…SNA…WMS…HAS…JOSB…SHW...URBN…AGN…AMZN…AFAM…ANSS…BIIB…BYI…DECK…ESRX…HDB…LFC…MCRS…NILE…PSSI…AAPL…AMX…CERN…CTSH…FWLT…GME…ICLR…JW.A…MON…MTW…NDAQ…NEU…NIHD…QSII…VMI…WAB…MOS…OI…PPD MTW from our intra-day post on Monday continues to move higher Moving Above 30 DMA = 15 CAM…CCC…CHU…EPR…FLS…GILD…HLF…MBT…MTD…PCP…POT…RIO…ROST…TEVA…VIVO

Moving Below 30 DMA AXYS…RCI Staying Below 30 DMA LAYN…NOV…OSIP…SINA…SOHU…SWN…MMM…FLIR…PETS…SPTN…STRA…BCR…CL…DV…ACL…AME…CBST…CHTT…GIS…MYGN…PRGO…TECH Wednesday’s Action Moving Up: POT, AEM, BTU, CLF, SCHN, AGU, CNX, NUE, FSLR, ANR, X, FWLT, MOS, MEE, GDX, STRA, MA, CF, IPI, NIHD, COH, ESRX, GRMN, ADM Moving Down: AFAM, GS, SINA, MON Intermediate Term Market Trend: Neutral – DJIA, SPX, Down – Nasdaq, RUT Short Term Market Trend: Up

Tuesday, December 9, 2008

Bearish Harami Pullback

DJIA - 242.85, -2.72% SP500 - 21.03, -2.31% NASDAQ Comp. - 24.10, -1.50% Russell 2000 - 15.67, -3.26% Exchange NYSE NASD Advancing 1,266 962 Declining 2,581 1,905 Oil $42.07 -$1.64 Gold $772.40 +$5.00 SOX 205.65 +9.50 VIX 58.91 +0.42 Strongest Sectors: XLE +1.00%...XLK -0.64%...XLB -1.06% Weakest Sectors: XLF -4.02%...XLY -2.01%...XLP -1.93% Sector Watch Up Trending: Sideways: XLE, XLP, XLU Down Trending: XLF, XLY, XLV, XLI, XLB, XLK Monday evening we had 250 people join in our TA webcast. In the session we pointed out that while the short-term trend was up we expected stocks to pullback in the next 1 to 2 days. We pointed out the upper reversal zone reading on the momentum and near term line, the lack of weakness in the VIX on Monday when the SPX was up strong and the relative weakness in the SOX index compared with the Nasdaq and other broad indices as our reasons for a pullback. We also mentioned the SOX strength could simply be delayed as it was last week on Dec. 2 as the Nasdaq rose and then made a strong move on Dec.3. Interestingly enough that is exactly the way it happened today. The SOX found buyers on Tuesday as the index rose 4.84% even though the broad indices were lower. TXN traded over 34 million shares (average 17.9 mil.) while rising 4.93%. Other SOX leaders included: NSM, MRVL, AMD, MXIM, BRCM, LLTC MU and ALTR. (click images to enlarge) ProphetCharts We also stated this might be a bull flag type of pullback and to look for a potential higher low following the inverse head and shoulders breakout on the indices on Monday. The SPX, Nasdaq and RUT showed some early strength until 11 am ET on Tuesday when the expected pullback began to materialize as sellers took over. The VIX was relatively weak compared to the drop in the SPX suggesting fear was not rampant in Tuesday’s selling. Only one Sector ETF Energy, XLE, rose on Tuesday and that was even with oil prices falling $1.64 to 42.07 a barrel. The Financial Sector, XLF, which has been the strongest sector over the past two weeks, was the weakest sector on Tuesday.

Index Commentary The DJIA formed a bearish harami as it pulled back to its 30 DMA. The SPX formed a bearish harami as it pulled back to its 30 DMA.

The Nasdaq formed a tombstone doji as it pulled back to its 30 DMA. The RUT formed a bearish harami and shooting star like pattern as it closed just below its 30 DMA. Stocks to Watch on Wednesday Leading Stocks: Holding Above 30 DMA AXYS…AYE…EZPW…PCLN…ASIA…BAP…DLTR…ESI…FLR…FSTR…TKC…JCOM…JEC…PCR…ATK…B…IRIS…MIG…RTN…SNA…WMS…HAS…JOSB…URBN…AGN…AMZN…AFAM…AME…ANSS…BIIB…BYI…DECK…ESRX…HDB…ICON…LFC…MCRS…NILE…PSSI…AAPL…AMX…AOB…CERN…CTSH…FWLT…GME…ICLR…IT…JW.A…MON…MTW…NDAQ…NEU…NIHD…QSII…RIC…SNHY…VMI…WAB Moving Above 30 DMA = 4 MOS…OI…PPD…PRXL Moving Below 30 DMA ACL…AIRM…AME…BRKR…CBST…CCC…CHTT…CHU…EPR…GILD…GIS…MTD…MYGN…PRGO…PTNR…ROST…TECH…TEVA…VIVO Staying Below 30 DMA DGIT…LAYN…NOV…OSIP…RIO…SINA…SOHU…SWN…MMM…FLIR…PCP…PETS…SPTN…STRA… BCR…CL…DV Tuesday’s Action Moving Up: MON, BRCM, MOS, SCHN, AGU Moving Down: FSLR, MA, GS, V, ESRX, SOHU, PCLN, UAUA, KRE, MS, ZION, LCC, FWLT, KBE, INFY, RF, COH, CLF, ANR,X, STRA Intermediate Term Market Trend: Neutral – DJIA, SPX, Down – Nasdaq, RUT Short Term Market Trend: Up

Monday, December 8, 2008

Continuation of Friday's Pennant Breakout

DJIA + 298.76, +3.46% SP500 + 33.63, +3.84% NASDAQ Comp. + 62.43, +4.14% Russell 2000 + 20.29, +4.40% Exchange NYSE NASD Advancing 3,061 2,095 Declining 825 812 Oil $43.71 +$2.90 Gold $767.40 +$16.90 SOX 196.15 +3.59 VIX 58.49 -1.44 Strongest Sectors: XLB +7.52%...XLF +6.71%...XLV +4.66% Weakest Sectors: XLP +0.46%...XLV +0.79%...XLU +1.62% Sector Watch Up Trending: Sideways: XLE, XLP, XLU Down Trending: XLF, XLY, XLV, XLI, XLB, XLK All nine Sector ETFS moved higher on Monday with XLF the second leading sector. XLF has been the strongest sector over the past two weeks rising more than 50%, forming a 30 DMA and Higher Low Breakout today. (click image to enlarge) ProphetCharts Index Commentary The DJIA continued moving up from Friday’s upside pennant pattern breakout…sellers appeared at 50 DMA as the Dow closed 7 points below its 50 DMA…again closed above its 20 and 30 DMA…broke out and closed above it Nov. 28 high . See DJIA Chart below in our post shortly before the close. The SPX broke out and closed above its 30 DMA…again closed above its 20 DMA…broke out and closed above its Nov. 28 high. Chart Signals Target: Fib=948 Breakout=977 The Nasdaq broke out and closed above its 30 DMA…closed above it Oct. 10 low and its Nov. 29 high, which represents a potential shift of intermediate term trend from down to neutral…continuation of its pennant pattern breakout on Friday The RUT broke out and closed above its 30 DMA…continuation of pennant pattern breakout on Friday. Stocks to Watch on Tuesday Leading Stocks: Holding Above 30 DMA AXYS…AYE…EZPW…PCLN…ASIA…BAP…CBST…DLTR…ESI…FLR…FSTR…TKC…JCOM…JEC…PCR…ATK…B…IRIS…MIG…RTN…SNA…TEVA…WMS…GILD...HAS…JOSB…URBN…AGN…AMZN…ROST…ACL…AFAM…AIRM…AME…ANSS…BIIB…BYI…DECK…ESRX…HDB…ICON…LFC…MCRS…NILE…PSSI Moving Above 30 DMA = 32 AAPL…AMX…AOB…BRKR…CCC…CERN…CHTT…CHU…CTSH…EPR…FWLT…GIS…GME…ICLR…IT…JW.A…MON…MTD…MTW…MYGN…NDAQ…NEU…NIHD…PRGO…PTNR…QSII…RCI…SNHY…TECH…VIVO…VMI…WAB (click image to enlarge) Moving Below 30 DMA BCR…CL…DV…PPD Staying Below 30 DMA GIS…DGIT…LAYN…NOV…OSIP…RIO…SINA…SOHU…SWN…VMI…MMM…FLIR…PCP…PETS…SPTN…STRA Monday’s Action Moving Up: POT, X, MA, FSLR, GS, SCHN, MON, NUE, CLF, AFAM, PCLN, CF, CNX, ANR, BTU, FWLT, MEE, MOS, AGU, NDAQ, V, INFY, AEM, GDX, ESRX, NIHD, SOHU, ONXX, SINA, IPI, COH, PNRA, KBE, GRMN, KMT, ADM Moving Down: STRA, HANS, ZION Intermediate Term Market Trend: Neutral – DJIA, SPX, Down – Nasdaq, RUT Short Term Market Trend: Up

Inverse Head & Shoulders Breakout?

2:35 pm ET The rally continues...with a little more than an hour to go on Monday, the DJIA is up over 300 points the SPX is +35 and the Nasdaq is +65.
Is this an Inverse Head & Shoulders Breakout on the DJIA?
(click image to enlarge)
DECK continues its 30 DMA and Higher Lower Breakout on Monday. (click image to enlarge)
If this breakout on MTW holds through the close it will be on our Moving Above 30 DMA List this evening.
Are you watching the Chart Signals list for 30 DMA breakouts each day?
If not you may be missing out on opportunities that could be yours!
(click image to enlarge) ProphetCharts
We'll be back after the close!

Friday, December 5, 2008

Boy, Oh Boy, Oh Boy, What a Friday...

DJIA + 259.18, +3.09% SP500 + 30.85, +3.65% NASDAQ Comp. + 63.75, +4.41% Russell 2000 + 21.56, +4.91% Exchange NYSE NASD Advancing 2,619 1,965 Declining 1,204 849 Oil $40.81 -$2.86 Gold $750.50 -$13.30 SOX 192.56 +5.92 VIX 59.93 -3.71 Strongest Sectors: XLF +7.92%...XLK +3.94%...XLV +3.41% Weakest Sectors: XLU +0.64%...XLB +1.86%...XLE +2.08% Sector Watch Up Trending: Sideways: XLE, XLP, XLU Down Trending: XLF, XLY, XLV, XLI, XLB, XLK After giving back all of Wednesday's gains on the Thursday the market found support near Monday's lows and rallied over 500 Dow points to regain all of Thursday's drop and more. All sector ETFS moved higher on Friday with Financial, XLF, leading the way for the third time this week. The Retail Industry ETF, XRT, rose 7.10%, while AMZN pulled back and found support just above 43 before rising to 48. The DJIA, SPX, Nasdaq and RUT appeared to make higher lows this week. The DJIA closed in the middle of its 8-week trading range since the Oct. 10 low. Watch for a break above the Nov. 28 high on all four indices for confirmation of this week’s higher low. All fours indices appear to be on the verge of inverse head and shoulders breakouts. Watch for a breakout this next week. Check out our Stocks to Watch on Monday list. Oil and gold continued to fall on Friday. Index Commentary The DJIA first broke down out of its pennant pattern, reversed and broke out and closed above the pennant…closed above its 20 and 30 DMA…formed an outside day…bounced off of Monday’s support low and rallied over 500 points into the close...Friday was the highest close of the week. (click image to enlarge) ProphetCharts The SPX closed above its 20 DMA…formed an outside day…Friday was the highest close of the week. The Nasdaq closed above its 20 DMA…formed an outside day…broke out to the upside of its pennant pattern forming since Monday…Friday was the highest close of the week. The RUT closed above its 20 DMA…formed and outside day…closed just above the falling resistance line of its pennant forming since Monday…Friday was highest close of the week. Stocks to Watch on Monday Leading Stocks: Holding Above 30 DMA AXYS…AYE…DV…EZPW…PCLN…PPD…ASIA…BAP…CBST…DLTR…ESI…FLR…FSTR…TKC…JCOM…JEC…PCR…ATK…B…IRIS…MIG…RTN…SNA…TEVA…WMS…GILD...HAS…JOSB…URBN…AGN…AMZN…ROST (click image to enlarge) Moving Above 30 DMA ACL…AFAM…AIRM…AME…ANSS…BCR…BIIB…BYI…CL…DECK…ESRX…HDB…ICON…LFC…MCRS…NILE…PSSI (click image to enlarge) Moving Below 30 DMA None Staying Below 30 DMA MYGN…GIS…AMX…CERN…CHU……CHTT…DGIT…LAYN…NIHD…NOV…OSIP…RIO…SINA…SOHU…SWN…VMI…MMM…FLIR…PCP…PETS…SPTN…AAPL…AOB…CTSH…FWLT…IT…JW.A…MTD…PRGO…RCI…STRA…VIVO…WAB Friday’s Action Moving Up: MA, FSLR, STRA, POT, GS, SCHN, X, PNRA, NUE, CF, V, ESRX, PCLN, HANS, AFAM, ADM, CNX, ZION, COH, MON, CLF, KRE, UAUA, SOHU, NDAQ, KBE, MOS, FWLT, KMT, INFY, LCC, MS, IPI Moving Down: None Intermediate Term Market Trend: Neutral – DJIA, SPX, Down – Nasdaq, RUT Short Term Market Trend: Up

Thursday, December 4, 2008

Stocks Give Back Wednesday's Gain

DJIA - 215.45, -2.51% SP500 - 21.93, -2.93% NASDAQ Comp. - 46.82, -3.14% Russell 2000 - 14.23, -3.14% Exchange NYSE NASD Advancing 1,059 855 Declining 2,775 2,017 Oil $43.67 -$3.12 Gold $763.80 -$5.00 SOX 186.64 -11.43 VIX 63.64 +2.92 Strongest Sectors: XLY +1.09%...XLF -1.08%...XLP -1.28% Weakest Sectors: XLE -6.93%...XLK -4.05%...XLU -3.61% Sector Watch Up Trending: Sideways: XLE, XLP, XLU Down Trending: XLF, XLY, XLV, XLI, XLB, XLK The DJIA and SPX continue in their intermediate term (8 weeks) sideways trading range. The Nasdaq and RUT are still below key October support, now resistance levels. Retail stocks were strong again on Thursday. The Retail Industry ETF, XRT, rose 3.21%, while AMZN added another 4.67%. Consumer Discretionary, XLY, was the only sector that moved higher on Monday. Financial ETF, XLF, -1.08%, was the second strongest sector Eight of nine sector ETFS moved lower on Thursday. Check out our Stocks to Watch on Friday list. Oil fell another $3.12 to continue its down-trend. Gold and gold stocks fell again on Thursday. Index Commentary The DJIA, SPX, Nasdaq and RUT fell back below Monday's R1 level while forming a pennant pattern with Monday as the base. Watch for a pennant pattern break on Friday for market direction. Stocks to Watch on Friday Leading Stocks: Holding Above 30 DMA AXYS…AYE…DV…EZPW…PCLN…PPD…ASIA…BAP…CBST…DLTR…ESI…FLR…FSTR…TKC…JCOM…JEC…PCR…AME…AOB…ATK…B…IRIS…MIG…RTN…SNA…TEVA…WMS…GILD...HAS…JOSB…URBN Moving Above 30 DMA AGN…AMZN…ROST Moving Below 30 DMA AAPL…AME…ANSS…AOB…BCR…BYI…CL…CTSH…FWLT…IT…JW.A…LFC…MTD…PRGO…RCI…STRA…VIVO…WAB Staying Below 30 DMA MYGN…GIS…AMX…CERN…CHU……AFAM…CHTT…DGIT…ESRX…LAYN…NIHD…NOV…OSIP…RIO…SINA…SOHU…SWN…VMI…MMM…FLIR…PCP…PETS…PSSI…SPTN Thursday’s Action Moving Up: PNRA, NUE, ZION, MS, NDAQ, ESRX, ONXX Moving Down: STRA, FSLR, MA, BTU, POT, CNX, MON, FWLT, PCLN, AEM, CF, V, CLF, INFY, SOHU, KMT, BRCM, ANR, AGU, GS, MEE, SCHN, X, IPI Intermediate Term Market Trend: Neutral – DJIA, SPX, Down – Nasdaq, RUT Short Term Market Trend: Neutral

Wednesday, December 3, 2008

Stocks Continue to Rally and Confirm Bullish Harami

DJIA + 172.60, +2.05% SP500 + 21.93, +2.58% NASDAQ Comp. + 42.58, +2.94% Russell 2000 + 11.94, +2.70% Exchange NYSE NASD Advancing 2,548 1,736 Declining 1,297 1,112 Oil $46.79 -$0.17 Gold $768.80 -$12.50 SOX 198.07 +12.38 VIX 60.72 -2.26 Strongest Sectors: XLF +5.17%...XLY +3.58%...XLK +2.87% Weakest Sectors: XLB -0.18%...XLE +0.06%...XLP +1.21% Sector Watch Up Trending: Sideways: XLE, XLP, XLU Down Trending: XLF, XLY, XLV, XLI, XLB, XLK Stocks continued to rally on Tuesday in part due to strong double digit increase in online spending over the Friday to Monday Thanksgiving weekend. XRT, the Retail Industry ETF rose 4.17%, while AMZN jumped 9.76%. Financial ETF, XLF, was the strongest sector ETF for the second straight day. Eight of nine sector ETFS moved higher on Wednesday. The broad indices and many stocks confirmed Tuesday’s bullish harami pattern while also breaking through Monday’s R1 resistance level and in many cases regaining over Tuesday and Wednesday more than 75% of Monday’s losses. The VIX fell again confirming the rise in the SPX. The SOX rose significantly making up for Tuesday’s under performance providing solid support to today’s tech rise. The DJIA continues in its intermediate term (7 weeks) sideways trading range while the SPX intermediate term trend status changed to neutral after closing above its Oct. 10 low for the second straight day. The Nasdaq and RUT are still below key October support, now resistance levels. Check out our Stocks to Watch on Thursday list. Gold and gold stocks fell on Wednesday and oil slipped just 17 cents. AAPL: Head & Shoulders, Double Bottom, Fibonacci Retracement and Hammer Early this morning in our webcast we pointed out two intra-day patterns a head and shoulders from Tuesday and a potential double bottom in progress on Wednesday. We pointed out that Tuesday's head and shoulders (1) had a price target of $89.25(2) which was achieved just after 2 pm and just before a rally took AAPL to a close at $92.50. We pointed out this morning during the first hour that AAPL was forming a potential double bottom (2) and if it broke the resistance high of $92.50 that the intra-day price target for AAPL would be $96. AAPL then rallied to $94.50 where traders selling formed resistance and caused AAPL to retreat, interestingly enough to a 50% Fibonacci retracement (3), where quite amazingly a hammer and dragonfly doji were formed (3)...only to see buyers step in and drive AAPL to a touchdown at $96 (4) just before closing at $95.90. (click image to enlarge) ProphetCharts These types of occurences are only happening every day and people wonder why Dave believes so strongly in Chart Signals. Dave's Insight: "I know technical analysis is just an accident...but isn't it amazing how the accident keeps happening over and over and over again." Index Commentary The DJIA confirmed Tuesday’s bullish harami and closed above Monday’s R1 level and also above its 20 DMA…closed just below its 30 DMA…remained in sideways trading range…bounced off 50% Fibonacci support and rose above the 23.6% retracement level from the Nov. 21 low. (click image to enlarge) Stocks to Watch on Thursday Leading Stocks: Holding Above 30 DMA AXYS…AYE…DV…EZPW…PCLN…PPD…ASIA…BAP…CBST…DLTR…ESI…FLR…FSTR…TKC…JCOM…JEC…PCR…AME…AOB…ATK…B…CL…CTSH…FWLT…IRIS…JW.A…MIG…RTN…SNA…TEVA…WMS Moving Above 30 DMA AAPL…ANSS…BCR…BYI…GILD...HAS…IT…JOSB…LFC…MTD…RCI…SHW…URBN…VIVO…WAB Moving Below 30 DMA FLIR…PCP…PETS…PSSI…SPTN Staying Below 30 DMA MYGN…GIS…AMX…CERN…CHU……AFAM…AGN…CHTT…DGIT…ESRX…LAYN…NIHD…NOV…OSIP…RIO…SINA…SOHU…SWN…VMI…MMM Wednesday’s Action Moving Up: FSLR, MA, GS, MON, V, ESRX, PNRA, MS, ZION, BRCM, ONXX, COH, BTU, KBE, KRE, KMT, AFAM Moving Down: STRA, POT, ANR, AEM, PCLN, CNX, ADM, CLF Intermediate Term Market Trend: Neutral – DJIA, SPX, Down – Nasdaq, RUT Short Term Market Trend: Up