Friday a Big Day as Sellers Push Oil Lower, Buyers Push Stocks Higher

DJIA + 302.89, +2.65% SP500 + 30.25, +2.39% NASDAQ Comp. + 58.37, +2.48% Russell 2000 + 20.89, +2.93% NYSE NASD Advancing 2,366 2,052 Declining 717 829 Oil $115.20 -$4.82 Gold $864.80 -$13.10 DXY 75.85 +1.22% $SOX 367.19 +7.54 Strongest Sectors: XLY +4.76...XLI +3.45%...XLF +3.44% Weakest Sectors: XLE -1.69%...XLB -0.41%...XLU +0.30% Oil and gold were down on Friday. Macro economic softness and a rising dollar seemed to behind the drop in oil and gold. Ag-related, coal and steel stocks also moved lower on Friday. With the new technical evidence on the chart of the RUT, Nasdaq, DJIA and SPX, we have changed our Intermediate Term trend status to Up. Keep in mind that the decline in oil prices has been a major factor underlying the strong rise in the broad indices over the last three weeks. Should the macro-economic factors, like weakness in demand, begin to change oil prices could reverse and that could lead to a reversal in stock prices. The technical evidence indicates a chart target of 98.50 for oil and we believe that a continuation of the down trend in oil prices is the more likely outcome. Short-term factors like weather or Middle East tensions could cause oil prices to fluctuate to the upside, but would seem unlikely to reverse the intermediate term down trend. Index Commentary The DJIA broke above its 50 DMA…after bouncing down from its 50 DMA yesterday, the break indicates buyers are becoming stronger and seller weaker than they were just yesterday…this is a higher high to go with the recent higher low…this is the second higher high and higher low since the market low three weeks ago…the 2-line MACD crossed above its zero-line today further confirming the new up trend. The SPX after a one-day pull back formed a bullish engulfing pattern that bounced off of its 20 and 30 DMA…formed a new high above Wednesday’s high and a point below its 50 DMA…broke out of it consolidation pattern with a short term chart target of 1,348. The Nasdaq on Thursday formed a shooting star and a potential bearish harami at its 50 DMA that did NOT confirm on Friday…bounced off its 50 DMA and moved over half the distance to its 200 DMA…short term chart target is 2,442. The SOX moved up for the fifth straight day approaching horizontal resistance of 370 and its 50 DMA at 368.9...a breakout of 370 gives a chart target of 410…the SOX continues to give strength to the strong move in the Nasdaq. The RUT broke out of its 200 DMA for the second time in three day a bullish sign with a bullish engulfing pattern after a one-day pullback,…short term chart target is 758. Stock Commentary MA bounced off 200 DMA with a bullish engulfing pattern RIMM breaks through 127.50 resistance...intermediate term chart target 152.50 DECK large white candle closes above 30 DMA after bullish engulfing on Thursday AAPL breaks through horizontal resistance and closes above 30 DMA...chart target 177.50 GS potential bullish harami at support in a sideways trend AMZN bullish engulfing pattern in horizontal earnings flag...new high close V large white candle outside day at support...potential double bottom with bullish divergence in 2-line MACD ESRX bullish engulfing pattern in horizontal earnings flag...new high close...resistance at 74 MS potential horizontal resistance breakout...at 200 DMA...60 chart target on breakout UAUA breakout horizontal resistance at 10.20...short-term chart target 13.60 Friday’s Action Moving Up: MA, RIMM, DECK, AAPL, GS, AMZN, V, ESRX, STRA, MS, UAUA, CELG, DRYS, LEH, EBAY, MER Moving Down: BIDU, FSLR, POT, MOS, X, CF, SCHN, USO, AGU, FWLT, CNX, BUCY, ANR, IPI, MEE, NUE, BTU, FNM Intermediate Term Market Trend: Up Short Term Market Trend: Up