Markets Pullback at 200 DMA, Oil Hits New High

DJIA + 41.36, +0.32% SP500 + 1.28, +0.09% NASDAQ Comp. - 12.76, -0.50% Russell 2000 - 2.72, -0.37% Oil closed at a record $127.05 The 200 DMA proved to be a resistance area where sellers appeared. Monday’s action was up until about 1:30 ET when markets peaked and moved lower. The DJIA and S&P finished higher with the DJIA closing above its 200 DMA and the S&P closing a point below its 200 DMA. The Nasdaq which was the weakest of the indices closed right at its 200 DMA. The Russell closed below 10 points below did not penetrate its 200 DMA although it did get within a ½ point during the trading session. The DJ Transportation index closed up 0.49% also formed a shooting star. Airline stocks are in a downtrend and rail stocks are in a strong up trend pushing this index higher. The DJIA closed looking like a potential double top, with a shooting star candle and a bearish divergence in the MACD. The S&P which made a higher high on Monday, also had a shooting star candle and bearish divergence in the MACD. The Nasdaq also made a higher high and formed a non-idealized shooting star and a bearish divergence in the MACD. The Russell 2000 also made a higher high with a shooting star but did NOT form a bearish divergence in the MACD. Watch closely on Tuesday for lower highs and lower lows in the indices. If this occurs the markets are likely in a short term pullback similar to the peak reached two weeks ago. At this point the technical evidence indicates that this pullback if it appears is a counter trend move. Trade accordingly. Many individual stocks that closed up also showed similar characteristics as the indices with potential double tops/higher highs, a bearish candle pattern and bearish divergences in the MACD. So watch for potential short-term pullbacks in these stocks on Tuesday. AMZN moved higher on an analyst upgrade. MTL is scheduled to split. Monday’s Action Moving Up: BIDU, AMZN, AA, BA, CVX, V, XLE, XLU Moving Down: FSLR, DRYS, POT, MOS, CF, AGU, MON, X, PCLN, DECK, STRA, UAUA, CELG, BRCM, RIMM, CLF, MEE, CNX, BTU, MA, GRMN, SOHU Intermediate Term Market Trend: Up Short Term Market Trend: Up