OPEC Cuts 1.5 Million BPD...Oil Prices...Stocks Fall

DJIA - 312.30, -3.59% SP500 - 31.34, -3.45% NASDAQ Comp. - 51.88, -3.23% Russell 2000 - 18.80, -3.84% Exchange NYSE NASD Advancing 638 633 Declining 2,830 2,249 Oil $64.15 -$3.69 Gold $730.30 +$15.60 $SOX 212.33 -2.03 Strongest Sectors: XLV -0.35%...XLU -2.66%...XLB -4.30% Weakest Sectors: XLF -6.49%...XLE -6.23%...XLI -5.76% Sector Watch Up Trending: Sideways: Down Trending: XLP, XLF, XLY, XLV, XLI, XLE, XLU, XLB, XLK OPEC held their emergency meeting on Friday and agree to cut production by 1.5 million bpd. And of course oil price…fell. That’s right we said…fell. This is another example of how economic announcements seldom have the ability to change the intermediate term trend. With the intermediate term trend in oil prices being driven by falling demand and global economic weakness the short-term news of reduced production at least on Friday was not enough to reverse the trend. We won’t take the time to elaborate now but we have stated for more than a year that we felt that oil prices over 50 to 60 a barrel had more to do with geopolitical fears than fundamental supply/demand issues. In general stocks including commodity related stocks moved lower on Friday. Gold stocks like GDX, AEM, GG and GOLD moved higher in a counter trend support bounce with the price of gold. All nine sectors moved lower on Friday. On Friday the DJIA, SPX and RUT stayed above or bounced at recent short-term support levels established since October 10. The Nasdaq established a new intra-day and closing low on Friday. Stay focused on these key support levels. While we expect consolidation to continue in the market for the near term we will stay alert for a potential support break. Traders must stay focused on what the market does and trade the market. Index Commentary The DJIA found support at 8,187 and rallied to form a black candle with a lower shadow…failed to confirm Thursday’s bullish harami. The SPX found support at 852 and rallied to form a hammer like candle with a lower shadow…there was no confirmation of Thursday’s bullish harami. The Nasdaq opened to new 52-week low and rallied but still closed at a new 52-week closing low. The RUT gapped open near its October 10 low and formed a spinning top at a new 52-week closing low. Friday’s Action Moving Up: STRA, AEM, NUE, LCC, ZION Moving Down: BIDU, GS, MA, DECK, SOHU, FSLR, CLF, BUCY, MON, ANR, ESRX, HANS, NDAQ, KBE, KRE, MS, MEE, SINA, MOS, MER, KMT, COH, AMZN, DRYS, LAMR, FMCN, BTU, X, IPI, FWLT, CNX, PNTRA, RF Intermediate Term Market Trend: Down Short Term Market Trend: Down