Markets Pull Back After Historic Rise

DJIA - 76.62, -0.82% SP500 - 5.34, -0.53% NASDAQ Comp. - 65.24, -3.54% Russell 2000 - 16.24, -2.84% Exchange NYSE NASD Advancing 1,911 1,138 Declining 1,609 1,853 Oil $78.63 -2.56 Gold $839.50 -$3.00 $SOX 256.40 -13.51 Strongest Sectors: XLF +6.45%...XLV +2.03%...XLY +0.61% Weakest Sectors: XLK -3.38%...XLB -2.90%...XLU -0.83% Sector Watch Up Trending: Sideways: Down Trending: XLP, XLF, XLY, XLV, XLI, XLE, XLU, XLB, XLK The DJIA and SPX had modes pullbacks after Monday’s historic rise. The Nasdaq and RUT had more of a correction. Only nine of the NDX 100 rose on Tuesday. AAPL, MSFT, QCOM, GOOG, ORCL, RIMM, INTC, AMZN, CELG and CSCO were the major contributors to the weakness in the Nasdaq. Be mindful that many of the support bounces of the past two days are counter trend moves in intermediate term down trends…many can be described as bear flag patterns. Watch for weakness to break short-term support levels. Oil moved lower in the direction of its intermediate term down trend and energy, coal, Ag-related and steel stocks moved lower, many forming bearish candle patterns. The Financial sector was the big mover on Tuesday. XLF broke above its resistance at 16.60 with a 4% breakout. This is positive and consistent with our expectations and our recent audio commentaries. This is the first sector to move from its down trend back into its sideways trading range of July to August. We will move XLF to Sideways in the Sector Watch if Wednesday holds above the breakout. Notable financial stocks that contributed to Tuesday’s sector strength include: BAC +16%, WFC +10%, C +18%, GS +10%, BK +13%, AXP +3%, ZION +24% Q3 Earnings releases continue…be aware of the earnings date for your holdings. Wednesday October 15 Notable Earnings: AMR, BBT, BK, BAX, DAL, EBAY, HOG, MER, NVLS, NUE, LUV, STJ, STLD, XLNX Wednesday Regional Bank Earnings: CBSH, CTBI, WABC Index Commentary The DJIA formed a spinning top that traded above the S1 level of Monday’s large white candle. The SPX also formed a spinning top that traded above the S1 level of Monday’s large white candle. The Nasdaq formed a dark cloud cover after two up days…closed near the S1 level of Monday’s large white candle. The RUT formed a dark cloud cover and closed above the S1 level of Monday’s large white candle. Stock Commentary DECK formed a bearish engulfing pattern. AAPL formed a bearish engulfing pattern on 70 million shares BIDU formed a dark cloud cover pattern ORCL formed a dark cloud cover pattern WYNN closed lower forming an outside day SHLD falls to S1 of Friday’s piecing line pattern CTSH traded above Monday’s S1 level while pulling back HANS formed a black spinning top and closed just below its 50 DMA C gapped higher and closed above its 50 DMA Tuesday’s Action Moving Up: GS, ZION, AEM, MS, KBE, RF, KRE, PCLN, MER, DRYS, KMT Moving Down: BIDU, POT, NUE, DECK, AMZN, MOS, MON, ANR, X, BTU, MEE, AGU, SCHN, BUCY, CLF, NIHD, PNRA, STRA, CNX, SOHU, LAMR, ONXX, INFY, BRCM, V, JASO, LDK, FMCN, COH, EXPE, FSLR, GRMN, FWLT, ESRX, Intermediate Term Market Trend: Down Short Term Market Trend: Up