Oil Price Drop Fuels Market Rally

DJIA + 34.03, +0.28% SP500 + 5.02, +0.38% NASDAQ Comp. + 32.35, +1.33% Russell 2000 + 7.12, +0.97% Oil closed at $131.93 down $4.75 The broad indices rose today in large part fueled by China’s announcement that it will raise gasoline prices. This is expected to increase production and decrease demand. Advancers led decliners 1,565 to 1,561 on the NYSE and 1,663 to 1,193 on the Nasdaq. The DJIA made a lower low and lower while forming a non-idealized bullish harami. The DJIA is trading below its 20, 30, 50 and 200 DMA and is still under its recent short-term support break at 12, 080. The S&P formed a potential double bottom today at 1,330 accompanied by a bullish divergence in the stochastic, 2-line MACD and MACD histogram. It also formed a non-idealized bullish harami. The S&P is trading below its 20, 30, 50 and 200 DMA. Watch for confirmation of Thursday’s bullish harami and for either a support bounce or a support break. The Nasdaq formed a bullish engulfing pattern today after breaking a bear flag pattern on Wednesday. The Nasdaq closed above its 50 DMA. It is above its January horizontal resistance level. The Nasdaq is below its 20, 30 and 200 DMA. Watch to see if today’s support bounce continues or pulls back. The Russell (RUT) also formed a bullish engulfing pattern while bouncing off its 50 DMA and breaking through and closing above its 20 and 30 DMA. It is trading below its 200 DMA. Watch to see if today’s support bounce continues tomorrow. X followed yesterday’s bullish engulfing pattern rising close to horizontal resistance for 185. RIMM broke out of horizontal resistance at 144.50. BRCM bounce off support with a large white candle. It is in a trading range with resistance at the 29 area. GENZ formed a bullish engulfing pattern. ADBE formed a bullish engulfing pattern after forming a double bottom pattern. Today’s Action Moving Up: X, STRA, GS, RIMM, BIDU, AAPL, DECK, BRCM, SCHN, AMZN, PCLN, UAUA, DRYS, MTL, GRMN, NUE, IBM, CELG Moving Down: MOS, CF, CNX, POT, USO, MON, MEE, AGU, FSLR, IPI, BTU Intermediate Term Market Trend: Down (DJIA, S&P) Short Term Market Trend: Down