Another Volatile Rebound in the DJIA and S&P

DJIA + 172.04, +2.02% SP500 + 11.33, +1.26% NASDAQ Comp. - 11.84, -0.73% Russell 2000 - 12.05, -2.40% Exchange NYSE NASD Advancing 1,292 824 Declining 2,152 2,032 Oil $67.84 +$1.09 Gold $714.70 -$20.50 $SOX 216.72 -2.98 Strongest Sectors: XLE +5.32%...XLU -2.39%...XLK -2.27% Weakest Sectors: XLV -2.31%...XLB -2.29%...XLF -1.02% Sector Watch Up Trending: Sideways: Down Trending: XLP, XLF, XLY, XLV, XLI, XLE, XLU, XLB, XLK Oil prices rebounded on Thursday in front of the OPEC emergency meeting on Friday. Airline stocks fell as a result. In general commodity related stocks like coal, gold, steel and Ag-related stocks did not participate in the rally. Oil stocks did have big moves today. XLE, +5.32% was the strongest sector. Oil stocks HES, XOM, OXY, CVX, APA, XTO, MRO, HAL, NOV and NE did even better. OPEC will hold its emergency meeting on Friday and it will be of great interest to see if they will cut production and if doing so can actually change the intermediate term down trend. Oil must make a higher low and higher to reverse. Our best sense is that it will be challenge to reverse the intermediate term down trend in oil prices with the drop in demand from economic softening. Five sectors XLE, XLU, XLK, XLP and XLI moved higher, XLY was unchanged while XLF, XLB and XLV moved lower. On Thursday the major indices stayed above or bounced at recent short-term support levels established on October 10 and 16. Stay focused on these key support levels. The past two week are moving in a sideways consolidation area so a support bounce is the most probable outcome. This is what happened Thursday in the DJIA and SPX. We expect consolidation to continue in the market for the near term and will stay alert for a potential support break. Traders must stay focused on what the market does and trade the actual market action. Index Commentary The DJIA found support at 8,243 and rallied to form a bullish harami…watch for confirmation. The SPX found support at 858 and rallied to form a hammer and bullish harami…watch for confirmation. The Nasdaq intra-day hit a new 52-week low about 8 points below its October 10 low before rallying to form a black hammer . The RUT fell to its October 10 low and rallied to form a black hammer like candle…forming a potential double bottom. Stock Commentary DECK fell to its recent support low with the potential to form a double bottom if support holds…after the close reported $1.97 earnings higher than the estimate of $1.85. AAPL formed a hammer…watch for a break of the high of the low day. BIDU broke the low of the high day and dropped 14% after reporting earnings of $1.47 above estimates of $1.28 Wednesday after the close. ORCL moved down from yesterday’s shooting star before finding support and forming a doji. WYNN another 52-week low SHLD another 52-week low CTSH fell continued its move down from resistance and formed a black hammer. HANS formed another spinning top in sideways consolidation. C formed a black hammer around the October 10 S1 level. Wednesday’s Action Moving Up: POT, BUCY, BRCM Moving Down: BIDU, FSLR, STRA, GS, MA, CF, DECK, SOHU, CLF, NIHD, MON, MOS, PCLN, BTU, FWLT, AGU, AEM PNRA, UAUA, ZION, LCC, KRE, CNX, LDK, DRYS, ONXX, JASO, KMT, LAMR, SINA, SCHN, MS, GDX, MEE, RF, ESRX, Intermediate Term Market Trend: Down Short Term Market Trend: Neutral