Stock Indices Form Bullish Harami Below Tuesday's R1

DJIA + 38.19, +0.34% SP500 + 7.53, +0.61% NASDAQ Comp. + 18.89, +0.85% Russell 2000 + 9.87, +1.40% Exchange NYSE NASD Advancing 1,707 1,633 Declining 1,394 1,245 Oil $102.58 -$0.68 Gold $762.50 -$29.50 $SOX 321.94 +2.64 Strongest Sectors: XLE +3.94%...XLU +1.11%...XLB +0.86% Weakest Sectors: XLF -1.22%...XLY -1.03%...XLK -0.47% The market rally on Wednesday faded during the final hour of trading as indices closed below their highs of the day. Several indices including the DJIA, SPX, Nasdaq, RUT and SOX all formed a bullish harami candle pattern today. Numerous down trending ETF’s also formed a bullish harami including XLE, KOL, GDX, XLB and XME. The bullish harami patterns in the indices failed to close above the R1 level of Tuesday’s large black candle, this indicates a weak rally as of today. Continue to focus on the recent support levels and the near term resistance R1, R2 and R3 levels. Trade accordingly. Many energy, coal, basic materials, metal, mining, gold and Ag-related stocks rose not withstanding the fall in gold prices and slight drop in oil prices. Financial stocks including XLF fell again in late trading with continuing concerns with LEH. Commodity related stocks rose perhaps as both a potential financial crises and Hurricane Ike weather hedge. Index Commentary The DJIA formed a bullish harami and continues to trade in a sideways congestion…continues below Tuesday’s R1 level and below its 20, 30, 50 and 200 DMA. The SPX formed a bullish harami and is trading slightly above Friday’s low and at its 78.6% Fibonacci level…continues below its 20, 30, 50 and 200 DMA. The Nasdaq formed a bullish harami and rose to its 78.6% Fibonacci level…trading below its 20, 30, 50, and 200 DMA. The RUT formed a bullish harami and bounced up through its 50 DMA and closed less than a point under its 200 DMA…closed above the August 26 support low of the recent M Top Reversal pattern…still above Friday’s hammer low. Sector Watch Up Trending: XLP, XLY Sideways: XLF, XLI, XLV Down Trending: XLE, XLU, XLB, XLK Wednesday’s Action Moving Up: FSLR, BIDU, STRA, MA, X, MOS, RIMM, CF, CLF, DECK, CNX, BTU, AGU, MEE, IBM, POT, FWLT, NUE, DRYS, V, ESRX, WRC, MTL, LDK, CELG, ONXX, BUCY, EBAY, SOHU, ANR, IPI, SCHN, AEM, MON, GDX, GRMN, BRCM, KMT, INFY Moving Down: GS, AMZN, MS, PCLN, MER, LAMR, UAUA, Intermediate Term Market Trend: Neutral Short Term Market Trend: Down