Oil Down and Stocks Up Again...A Winning Combination

DJIA + 29.88, +0.26% SP500 + 5.19, +0.41% NASDAQ Comp. + 21.92, +0.95% Russell 2000 + 2.37, +0.33% Advancers & Decliners NYSE 1,965 1,196 NASD 1,674 1,248 Oil closed at $124.44 down $3.98 Oil fell again on Tuesday for the sixth time in the last seven days. The Dow and Russell rose for the fifth time in the last six days. Looks like a winning combination; Oil down, stocks up. If oil continues its down trend we expect the short-term up trend in stocks to become an intermediate term up trend. Check out our *New* features under Earnings Watch... Index Commentary The DJIA stayed above its 30 DMA on Wednesday and formed a small spinning top...this could be a sign that the momentum of the past week is slowing down...the short term trend continues to be up...if a pull back does occur keep your eye on the S1, S2 and S3 levels of Tuesdays candle...a pull back to any of these levels would be a higher low...a 50% Fibonacci retacement would be at 11,262.

The SPX hit resistance at its 30 DMA and pulled back forming a shooting star pattern...suggesting a possible short-term pull back...it is still above its 20 DMA...if a pull back occurs watch the S1, S2 and S3 level of the Tuesday July 22 candle...the 50% Fibonacci retracement is at 1,245.

The Nasdaq broke through its 30 DMA only to see sellers push the index back under by the close...it formed a white candle with a large upper shadow...again watch the support levels on Tuesday's large white candle if a pull back occurs...closed above its 20 DMA...the 50% Fibonacci retracement is at 2,258.

The RUT reached its double bottom breakout target today at 720...moved toward its 200 DMA before seller pushed the index back forming a shooting star pattern...is trading above its 20, 30 and 50 DMA...broke through and closed at its 61.8% Fib retracement of the down trend started on June 5...watch Tuesday's S1, S2 and S3 levels if a pull back occurs and for a higher low...the fast line of the 2-line MACD moves above the 0 line...this looks like an intermediate term uptrend and we'll give it another day to see if it stays above its 50 DMA.

Earnings Watch Tuesday AMC/ Wednesday BMO Earnings Moving Up: ISRG +50.90, ILMN +7.85, GD +5.82, NIHD +5.07 Tuesday AMC/ Wednesday BMO Earnings Moving Down: BRCM, CHRW, LLTC, YHOO, BA, COP, GENZ, COP Wednesday’s AMC Earnings After Hours Market Moving Up: AMZN, BIDU, QCOM Wednesday’s AMC Earnings After Hours Market Moving Down: WFR After Hours: AMZN +6.04, BIDU +38.38, QCOM +8.38, WFR -13.50 *NEW* ATM August Straddle Cost at Close: 70 AMZN 9.95, 290 BIDU 43.24, 45 QCOM 4.79, 55 WFR 8.00 Stock Commentary DECK closed above 124 resistance, bounced down from its 30 and 200 DMA and closed above its 20 DMA. The breakout gives a short-term price target of 136. RIMM closed above resistance of 117...closed above its 20 DMA...the breakout gives it a short-term target of 124. SOHU rose near 84 resistance area and above 50 DMA...watch for resistance breakout POT fell to support and below 50 DMA...watch for support break MOS fell to support and below 50 DMA...watch for support break CF fell below 50 DMA AGU fell to support and below 50 DMA...watch for support break Wednesday’s Action Moving Up: DECK, DRYS, AAPL, SOHU, RIMM, AMZN, UAUA, LEH, ESRX Moving Down: CF, POT, MOS, MON, ANR, FSLR, AGU, CLF, X, IPI, PCLN, BIDU, USO, CNX, MA, MTL, MEE, BTU, SCHN, CELG, FWLT, NUE, BRCM, STRA Intermediate Term Market Trend: Down Short Term Market Trend: Up