Amazing Gains Day Two

DJIA + 368.75, +3.35% SP500 + 48.57, +4.03% NASDAQ Comp. + 74.80, +3.40% Russell 2000 + 30.06, +4.15% Exchange NYSE NASD Advancing 3,082 2,312 Declining 419 664 Oil $104.55 +$6.67 Gold $864.70 -$32.30 $SOX 333.91 +6.20 Strongest Sectors: XLF +11.84%...XLE +6.52%...XLB +5.75% Weakest Sectors: XLP -0.89%...XLK +0.39%...XLV +0.64% Sector Watch Up Trending: Sideways: XLF, XLI, XLV, XLP, XLY Down Trending: XLE, XLU, XLB, XLK Dave was in Ottawa, Canada on Wednesday and Thursday teaching a two day workshop on how to trade stocks and options. Dave returned on Friday and will be in all next week! The headline could read “The DJIA Ended Another Blasé Week Closing Down Just 33 Points.” While the DJIA did close down just 33 points for the week it had its wildest weekly trading range in over five years covering more than 1,000 points between its high and low The DJIA weekly trading range has been less than 600 points over 75% of the time during the past year and only once has exceeded 800 points. In reality the DJIA experienced dramatic declines on Monday and Wednesday only to have equally dramatic rises on Thursday and Friday moving the broad indices back into the trading range congestion of the past several weeks. The intermediate term trend is neutral. The week ended with the Fed and Treasury proposing a $700 billion bailout of the financial system and an SEC ban on the shorting of 799 financial stocks through October 2. Next week should be filled with interesting developments. Stay focused on key support and resistance levels. Index Commentary The DJIA rallied on Friday breaking through its 61.8 Fibonacci retracement from its August 11 high…it closed above its 20 DMA and at its 30 and 50 DMA… The SPX also moved above its 61.8 Fib retracement and closed above its 20 DMA and just below its 30 and 50 DMA. The Nasdaq rose to its 61.8% Fib retracement where sellers pushed the index back slightly…closed above its 20 DMA and below its 30 and 50 DMA and below its 61.8% Fib level. The SOX found heavier selling pressure than the broad indices at its 50% Fib retracement level as sellers pushed the index back below its 20 DMA with a close at its 38.2% Fib retracement. The RUT which closed above its 200, 50 and 20 DMA on Thursday gapped above and closed above it 30 DMA on Friday...sellers appeared at the 761 horizontal resistance area which is where sellers turned the index lower in June and August…Friday was the third highest daily close in 2008. Friday’s Action Moving Up: GS, FSLR, MA, POT, MOS, DECK, CF, AAPL, NDAQ, RIMM, X, AGU, ANR, MEE, MON, NUE, MER, CLF, DRYS, SOHU, BUCY, V, JASO, CNX, FWLT, BTU, IPI, AEM, SCHN, STRA, MS, AMZN, FMCN, IBM, CELG, INFY, HANS, WRC, NIHD, LAMR, PCLN, MTL, KMT, COH, BRCM, GRMN, GDX, SINA, EXPE Moving Down: BIDU, LDK, PNRA, ESRX Intermediate Term Market Trend: Neutral Short Term Market Trend: Up