Markets Break Support After Bill Passes House...

DJIA - 157.47, -1.50% SP500 - 15.05, -1.35% NASDAQ Comp. - 29,33, -1.48% Russell 2000 - 18.27, -2.87% Exchange NYSE NASD Advancing 1,201 818 Declining 2,250 2,073 Oil $93.88 -$0.09 Gold $833.20 -$11.10 $SOX 284.74 -3.81 Strongest Sectors: XLP -0.80%...XLB -0.98%...XLE -1.19% Weakest Sectors: XLF -4.38%...XLY -3.50%...XLV -2.15% Sector Watch Up Trending: Sideways: XLF, XLV, XLP, XLY Down Trending: XLI, XLE, XLU, XLB, XLK Friday is the classic example of why we teach the principle to trade the markets not your thoughts. It was a reasonable thought the way the markets had been trading over the past two weeks that the market would rally once the financial resolution bill passed successfully. Only that's not the way it worked. The market was up significantly before the bill was passed by the House, in anticipation of passage. However once it was clear the bill had passed the markets sold offi in a big way and even broke the support of the recent horizontal low. The Russell continued its break of horizontal support and like the rest of the indices is now in an intermediate term down trend. The breadth of the drop is not as quite as weak as the worst days over the past two weeks...even our small watchlist had several stocks move up on Friday. HANS rallied 11% on Friday and is above its recent breakout level. Chart target is 37.50. NTRI had a modest bull flag support bounce and was up for the day on Friday. Need to break through DMA to have a convincing move up. KRE reversed its bull flag support bounce on Friday. Index Commentary The DJIA, SPX, Nasdaq and RUT broke below horizontal support. Watch the R1 resistance of Thursday's large black candle if any rally is to be more than a counter trend move in the existing down trend. Friday’s Action Moving Up: HANS, STRA, RF, POT, ANR, FWLT, MON,MOS, MS, SOHU Moving Down: FSLR, BIDU, DECK, ESRX, KRE, KBE, GS, PCLN, GRMN, UAUA, DRYS, CF, FMCN, LDK, KMT, INFY, COH, V, LAMR, MER, ONXX Intermediate Term Market Trend: Down Short Term Market Trend: Down