Second Largest Point Drop on New Uncertainty in Retail Sales

DJIA - 733.08, -7.87% SP500 - 90.17, -9.03% NASDAQ Comp. - 150.68, -8.47% Russell 2000 - 52.54, -9.47% Exchange NYSE NASD Advancing 381 423 Declining 3,125 2,482 Oil $73.42 -$1.12 Gold $839.00 -$0.50 $SOX 233.59 -22.81 Strongest Sectors: XLP -3.43%...XLU -7.44%...XLK -7.52% Weakest Sectors: XLE -14.44%...XLB -12.41%...XLY -11.62% Sector Watch Up Trending: Sideways: Down Trending: XLP, XLF, XLY, XLV, XLI, XLE, XLU, XLB, XLK The DJIA had its second largest point drop in history today falling 733 points. The decline was kicked off by a Commerce Department report that sales declined in September by 1.2%, larger that a forecast decline of 0.7%. In addition the NY Fed Bank Empire State Manufacturing Report dropped to a record -24.6% in September from a -7.4% in September. New negative surprises led to a renewed sell off. Remember “big money” doesn’t like two things; negative surprises and uncertainty. We hope you took to heart what we posted Tuesday: “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 continued its down trend falling another $1.12. Commodity related stocks…energy, coal, Ag-related, gold and steels all moved significantly lower on the day. 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. POT fell another 21%. All sectors including the Financial sector moved lower on Wednesday. XLF fell below its resistance at 16.60 to 15.45. JPM, WFC and KO reported stronger than expected earnings. WFC gave back its early gains to finish down 17 cents while KO gained 49 cents. Q3 Earnings releases continue…be aware of the earnings date for your holdings. Thursday October 16 Notable Earnings: BK, BAX, C, CAL, CY, HOG, MER, NUE, BTU, SHW, LUV, AMD, COF, GILD, GOOG, IBM, ISRG, SNDK, SYK, ZION. Index Commentary The DJIA dropped through the S1 level of Monday’s large white candle…closed above S2…a bear flag break. The SPX dropped below S1 and S2 of Monday’s large white candle…a bear flag break. The Nasdaq confirmed Tuesday’s dark cloud cover…fell below Monday’s S2m S3 and gap up and into Friday’s candle...a bear flag break. The RUT confirmed Tuesday’s dark cloud cover and closed below the S1, S2 and gap up of Monday’s large white candle and closed at the S1 of Friday’s large white candle...a bear flag break. Stock Commentary DECK moved down from its bearish engulfing pattern. AAPL moved down from its bearish engulfing pattern on 56 million shares BIDU moved down from its dark cloud cover pattern ORCL moved down from its dark cloud cover pattern WYNN fell to a new low after Tuesday’s outside day SHLD fell to a new low CTSH broke below the low of its high day on Tuesday HANS gapped up and then reversed forming a bearish engulfing like pattern C fell below the low of the high day on Tuesday Wednesday’s Action Moving Up: None in watchlist Moving Down: BIDU, POT, MA, STRA, FSLR, GS, MON, X, PCLN, ANR, NUE, CNX, BTU, AGU, MOS, ESRX, CLF, CF, V, AMZN, BUCY, SOHU, DECK, DRYS, NIHD, MER, INFY, COH, FMCN, FWLT, AEM, IPI, SHCN, MS, GRMN, MEE, GDX, SINA, NDAQ, PNRA, KRE, KBE, ZION, HANS, LDK, LAMR, KMT, EBAY, ONXX, BRC, EXPE, JASO Intermediate Term Market Trend: Down Short Term Market Trend: Down