Markets Rally Near July 15 Support Area

DJIA + 141.51, +1.30% SP500 + 20.90, +1.75% NASDAQ Comp. + 27.99, +1.28% Russell 2000 + 20.89, +3.03% Exchange NYSE NASD Advancing 1,442 1,691 Declining 1,265 1,253 Oil $91.15 -$4.56 Gold $780.50 -$6.50 $SOX 316.36 +4.60 Strongest Sectors: XLF +7.49%...XLE +4.23%...XLK +1.88% Weakest Sectors: XLU -1.51%...XLE -0.16%...XLP 0.00% Sector Watch Up Trending: XLP, XLY Sideways: XLF, XLI, XLV Down Trending: XLE, XLU, XLB, XLK Markets rallied from a key long-term support level today in what as of today is a counter trend move in the DJIA, SPX and Nasdaq indices. The Fed announced today they were leaving interest rates unchanged. MS reported after the close better than expected earnings. MS gapped down over $8 Tuesday’s open and rose during the day and closed down $3.49 or 10.84%. In after hours trading the stock rose over 10% or $3.05. Watch for active trading on Wednesday and to see if the down trend reverses over the next several trading sessions. SNDK which closed at 15.04 received a buyout offer from Samsung at $26 cash per share. Stock rose over $7 in after hours trading. Oil fell again on Tuesday to under $92 a barrel. If this down trend continues it will likely prove positive for the economy, retail and airline stocks. We mentioned airlines in Monday’s posting. We have been posting about the potential for airline stocks to rise with the down trend of oil and today they did in a big way. The big five rising between 12 and 23% today. Look at: AMR, CAL, DAL, LCC and UAUA. Also the Fed after the close made $85 billion available to assist AIG, the largest insurer in the U.S. and one of the Dow 30 stocks. AIG employs over 116,000 people. Index Commentary The DJIA fell below its July 15 low on Tuesday and then bounced to close up for the day and closed below the R1 level of Monday’s large black candle. The SPX which broke below its July 15 low on Monday, rose above that support level on Tuesday and closed below the R1 level of Monday’s large black candle. The Nasdaq gapped below its July 15 low and bounced near the mid-range of Monday’s trading…this is a counter trend move until it can make a higher high of last Friday’s close. The RUT which broke through it 61.85 Fibonacci level from its July 15 low on Monday bounced before reaching its 78.6% level and bounced up through its 50% Fib level… today’s rise pushed through Monday’s R1 level…the strongest of the four broad indices…still trading below its 20, 30, 50 and 200 DMA…watch Monday’s R2 and its moving averages as important resistance levels. Stock Commentary These uptrending stocks rose on well above average volume caught out attention today: RKT, ACE, ONB, THG, USB, BKE Tuesday’s Action Moving Up: FSLR, CF, POT, MON, X, MON, PCLN, DECK, LDK, PNRA, RIMM, ESRX, NUE, MOS, MA, FWLT, CLF, AGU, SCHN, ANR, IPI, AEM, BTU, GRMN, CNX, UAUA, ONXX, INFY, AMZN, LCC, NIHD, SOHU, BUCY, JASO, DRYS, EBAY, CELG, IBM, COH, STRA, KMT, SNDK Moving Down: BIDU, V, GS, MS, WRC, BRCM, MEE, SINA, Intermediate Term Market Trend: Down Short Term Market Trend: Down