The Path was Deep and Wide with Footsteps Leading to...

DJIA - 358.41, -3.03% SP500 - 38.82, -2.94% NASDAQ Comp. - 79.89, -3.33% Russell 2000 - 17.88, -2.50% Oil closed at $139.64 up $5.09 Oil moved broke out of the pennant that has been forming since June 6. The markets moved significantly lower once again proving that double tops, head and shoulders tops and bear flags do have some predictive value in trading. Decliners blew away advancers on the NYSE 2,701 to 468 and on the Nasdaq 2,323 to 604 on the Nasdaq. This down move was broad and wide and deep today. There were 209 new 52 week lows on the NYSE compare with 6 new 52 week highs on the NYSE. The Nasdaq had 109 new 52 week lows and 7 new 52 week highs. For those that positioned themselves paying attention to the Chart Signals today should have been a great day. All four indices formed large black candles and are clearly in down trends. Watch for any retracements that reach the R1 horizontal resistance level of today’s candle. The DJIA hit a 52 week low as it broke the 11,800 support level in continuation of its down trend. The S&P achieved and broke below the 1,296 target price and moved towards its 1,275 horizontal support level. The Nasdaq broke below its one day bear flag and fell within 11 points of its 2,310 price target. The Russell (RUT) back below the neckline of its head and shoulders top with a price target of 670 to 673. Up Trending Coal sector stocks were moderately lower most of which are in bull flag patterns. KOL – ETF in a bull flag pattern formed a hammer for the second day in a row while bouncing off its 30 DMA. BTU in a two day flag bounced off its 20 DMA. MEE formed a hammer like pattern for the second day in a row and is well above its 20 DMA. CNX in a six day flag formed a hammer and bounced off its 30 DMA. ANR in a six day flag formed a hammer that confirmed yesterday’s hammer as it bounced off of its 20 DMA.

Ag-related stocks many of which are also in bull flag patterns moved lower and found intra-day support. POT in a six day flag bounced off its 30 DMA. MOS in a six day flag formed a bullish harami with a higher low and higher high as it closed at its 20 DMA. CF in six day flag formed an inside day and closed at its 20 DMA. AGU in a six day flag formed a lower high and lower low as it closed above its 20 DMA. MON in a six day flag formed an inside day and closed at its 50 DMA.

X in a two day bull flag pulled back to its 185 horizontal support breakout level.

Down Trending

AAPL fell through its double top support again as it bounced down from hitting the resistance of its 50 DMA yesterday. SOHU broke the neckline of its head and shoulders top. MER broke its bear flag and dropped below horizontal support. MS fell to horizontal support at 37. LEH confirmed yesterday’s shooting star and fell to horizontal support at 22.50.

Thursday’s Action Moving Up: (almost nothing) USO, DRYS Moving Down: (almost everything) RIMM, BIDU, FSLR, MA, AAPL, GS, X, NKE, SOHU, CF, PCLN, DECK, MON, AMZN, CLF, IBM, SCHN, STRA, AGU, V, MOS, NUE, FWLT, MER, POT, IPI, LEH, ESRX, BTU, MTL, MS, JASO, GRMN, BRCM, MEE, SBUX, EXPE Intermediate Term Market Trend: Down Short Term Market Trend: Down