You've Gotta Love a Great Trend and This Has Been A Great One

DJIA - 236.77, -2.08% SP500 - 29.01, -2.28% NASDAQ Comp. - 59.55, -2.60% Russell 2000 - 18.97, -2.78% Oil closed at $136.05 up 1 cent Oil soared (tongue in cheek) today rising 1 whole cent. So with oil holding steady why was this market down? Apparently somebody realized that the market is in a down trend and thought it was time to sell. We’re pleased to report that Chart Signals has maintained a neutral or down intermediate term trend status for weeks. We have correctly stressed over and over again that the support bounces are counter trend moves. The DJIA, SPX and Nasdaq were all down more points than they were up yesterday. The RUT was down only 18 points after rising 24 points on Tuesday. We pointed in yesterday’s post and in today’s audio commentary the SOX was casting considerable doubt on the viability of Tuesday’s rise. The SOX was up 0.89%, less than the broader index. We’ll today the SOX dropped 4.31%, more than the Nasdaq. This confirms the current down trend. The DJIA broke through the S1, S2 and S3 level of Tuesday’s bullish engulfing pattern and closed at a new 52-week closing low. The low was still in the support area of the past seven days. This is a key support area. Watch both the 11,150 support area and the R1 resistance level of today’s candle. The trading range between 11,150 and 11,400 looks like a horizontal bear flag, which is generally a trend continuation pattern, but watch for a break in either direction. The SPX broke through the S1 and S2 horizontal support level of Tuesday’s bullish engulfing pattern while staying above the S3 level. Today was also a 52-week closing low. 1,240 is a key support area. A break below this level would give a short-term target of 1,205. The short-term resistance is 1,275. The Nasdaq is still above its January and March lows but also closed at a new closing low for this down trend since early June. Like the SPX, the Nasdaq broke the S1 and S2 horizontal support levels of Tuesday’s large white candle and closed just above S3. A successful break below the 2,225 key support area would give a short-term target of 2,150. The RUT fell less than Tuesday’s gain and only penetrated only the S1 level of yesterday’s large white candle. The key support level here is still 650. Dave’s C – Entry Setup CF closed above the high of the low day and just above its 30 DMA AGU closed above the high of the low day and just above its 30 DMA BIDU rose early but sold off near its 50 DMA and falling back to the double bottom breakout point and in the process formed a shooting star pattern. AAPL found selling at its 50 DMA and formed a bearish engulfing pattern after falling back through its 30 DMA. FSLR gapped over its 30 DMA this morning and rose to its 50 DMA where a sell off followed forming a shooting star pattern. FSLR did end up 1.3% for the day. POT moved above its 30 DMA and found sellers at its 20 DMA and sold off forming a black shooting star while falling back below its 30 DMA. POT finished up 0.65% for the day. Other Stocks MA fell below the S1 level of Tuesday's large white candle. CELG dark cloud cover IPI closed above the high of the low day and near its 30 DMA V pulled back near support MON closed above the high of the low day, bounced off 200 DMA yesterday MOS closed above the high of the low day above 50 DMA, just below 30 DMA X gapped up found selling near 50 DMA and formed an inverted hammer On Tuesday financial stocks had a one day wonder rally and today gave it back for the most part. Many financials could potentially break support for another move down. Look at the support levels on: XLF, GS, MER, MS, LEH, JPM, AXP, AIG, C and BAC for potential bearish support breaks. Wednesday’s Action Moving Up: CLF, CF, X, MOS, ANR, SOHU, FSLR, AGU, NUE, MEE, IPI, POT, PCLN, MON, SCHN Moving Down: MA, GS, AAPL, RIMM, AMZN, DECK, IBM, V, MER, LEH, MS, BIDU, GRMN, NKE, CELG, CNX, BRCM, BTU, EBAY Intermediate Term Market Trend: Down Short Term Market Trend: Down