Markets Rise on Inside Day Pattern and Bullish Harami Confirmation

DJIA + 413.21, +4.67% SP500 + 44.85, +4.77% NASDAQ Comp. + 58.74, +3.43% Russell 2000 + 20.41, +3.88% Exchange NYSE NASD Advancing 2,909 2,164 Declining 572 753 Oil $75.32 +$2.40 Gold $790.00 +$2.30 $SOX 243.92 +4.79 Strongest Sectors: XLE +11.65%...XLU +8.43%...XLB +5.05% Weakest Sectors: XLY +0.54%...XLP +0.82%...XLK +3.99% Sector Watch Up Trending: Sideways: Down Trending: XLP, XLF, XLY, XLV, XLI, XLE, XLU, XLB, XLK Markets rose big on Monday, primarily back to Friday's highs. 82% of the stocks on the NYSE and 72% on the Nasdaq rose. All nine sectors ETFs moved higher on Monday. The DJIA, Nasdaq and RUT formed inside days. Only the SPX closed higher than Friday's high. This however is good news as buyers were not overwhelmed by sellers as they were late Friday. Yesterday, Sunday, October 19 was the 21st anniversary of the 1987 crash. No additional selloff on the 2008 Monday as a result. Earning releases continue this week. Oil rose on expectations of OPEC's October 24 emergency meeting would lead to production cuts. Oil, coal, gold, steel and Ag-related stocks rose in sympathy. Potential double bottom and W patterns exist on many of these charts. The price of oil here will be the key to whether these patterns will become reversal patterns or bear flag counter-trend moves. Look for higher lows and higher highs and confirmed breakouts. Otherwise look for potential bearish trades in these down trending stocks. Index Commentary The DJIA did confirm Thursday’s and Friday’s bullish harami on Monday…just barely an inside day closing at its high support…watch for a close above Wednesday’s high. The SPX confirmed Thursday’s bullish harami…Monday was a higher high and higher low. The Nasdaq confirmed Thursday’s and Friday’s bullish harami…and inside day…watch for a breakout of Friday’s high. The RUT confirmed Thursday’s and Friday’s bullish harami…an inside day…watch for a break above Friday’s high. Stock Commentary DECK formed an inside day. AAPL formed a hammer for the third day in a row and a hammer on 55 million shares. BIDU moved up continuing it support bounce. ORCL closed above Friday’s high with a large white candle. WYNN failed to follow through on its counter-trend support bounce forming a large black candle. SHLD fell to a new low in its down trend. CTSH moved higher following Friday’s bullish engulfing pattern…still looking like a potential W bottom. HANS broke through Friday’s inside day high and the high of the low day on Thursday…looks like a potential W pattern bottom. C formed a bullish harami…still forming a potential higher low W bottom. Monday’s Action Moving Up: BIDU, MON, BTU, GS, CLF, STRA, SOHU, CNX, ANR, POT, MOS, NUE, NDAQ, AGU, MEE, NIHD, DRYS, X, AEM FWLT, SCHN, LDK, CF, AMZN, BUCY, FSLR, HANS, GDX, IPI, PCLN, INFY, MER, ONXX, GRMN, ESRX Moving Down: MA, ZION Intermediate Term Market Trend: Down Short Term Market Trend: Neutral