Happy Thanksgiving...What a Great Week

DJIA + 102.43, +1.17% SP500 + 8.56, +0.96% NASDAQ Comp. + 3.47, +0.23% Russell 2000 + 4.28, +0.91% Exchange NYSE NASD Advancing 2,267 1,787 Declining 1,133 911 Oil $54.43 -$0.01 Gold $816.20 +$7.70 SOX 198.24 -3.06 VIX 55.28 +0.36 Strongest Sectors: XLF +2.51%...XLI +2.17%...XLU +1.76% Weakest Sectors: XLE -1.60%...XLK +0.13%...XLB +0.43% Sector Watch Up Trending: Sideways: XLE, XLP, XLU Down Trending: XLF, XLY, XLV, XLI, XLB, XLK Friday was a holiday shortened trading day and trading volume was light. The broad indices moved up for the fifth straight day producing the one of the largest weekly gains for 2008: Weekly Gain ending Nov. 28, 2008 DJIA +9.7% SPX +12.0% Nasdq +10.9% RUT +16.5% For some traders this past week could represent an entire year's worth of gain. While a pull back in the first week of December is not out of the question, the strength of stocks this past week is indeed making the past 7 weeks since Oct. 10 look like consolidating basing action and emphasizes the need for traders to stay focused on and trade the short-term trend, whether that trend is up or down. Index Commentary A bullish engulfing pattern on the DJIA weekly chart. (click image to enlarge) A bullish engulfing pattern on the SPX weekly. (click image to enlarge) A bullish engulfing pattern on the Nasdaq weekly. (click image to enlarge) A bullish engulfing patten on the RUT weekly. (click image to enlarge) Stocks to Watch on Monday Leading Stocks: Holding Above 30 DMA TEVA…AXYS…AYE…CL…DV…EZPW…MMM…PCLN…PPD…ANSS…ASIA…BAP…CBST…DLTR…ESI…FLR…FSTR…PRGO…SHW…TKC…WMS…AME…JCOM…JEC…NOV…AOB…ATK…CHTT…CTSH…DGIT…FLIR…JW.A…MIG...MTD…OSIP…PCP…PCR…RIO…SINA…SOHU…SWN…VIVO…VMI Moving Above 30 DMA AFAM…AGN…B…ESRX…IRIS…LAYN…NIHD…RTN…SNA…WAB (click image to enlarge) ProphetCharts Moving Below 30 DMA AMX…BCR…CERN…CHU…GILD…HAS…LFC…PSSI…RCI…URBN Staying Below 30 DMA MYGN…GIS Friday’s Action Moving Up: MON, GS, AEM, PCLN, STRA, LDK, MER, INFY, LAMR, ONXX, AGU, MOS, SINA, NUE, ZION, KBE Moving Down: BIDU, FSLR, DECK, AMZN, CNX, MEE, BTU, BRCM Intermediate Term Market Trend: Neutral – DJIA, SPX, Down – Nasdaq, RUT Short Term Market Trend: Up

Happy Thanksgiving Eve

DJIA + 247.14, +2.91% SP500 + 30.29, +3.53% NASDAQ Comp. + 67.37, +4.60% Russell 2000 + 25.68, +5.79% Exchange NYSE NASD Advancing 3,100 2,273 Declining 581 595 Oil $54.44 +$3.67 Gold $808.50 -$10.00 SOX 201.30 +14.28 VIX 54.92 -5.98 Strongest Sectors: XLY +5.88%...XLE +5.60%...XLF +4.66% Weakest Sectors: XLU -0.34%...XLP +1.28%...XLV +1.57% Sector Watch Up Trending: Sideways: XLE, XLP, XLU Down Trending: XLF, XLY, XLV, XLI, XLB, XLK What a great way to set up Thanksgiving with a continuation of the short-term up trend which began last Friday. Markets are closed on Thursday and will be open for half a day on Friday. Friday after Thanksgiving is traditionally the lightest daily volume of the year. Trading should return in earnest on Monday. Not only did the broad indices and sectors move up strong on Wednesday, many individual stocks flashed entry signals on Wednesday. Be sure to review the charts in our Stocks to Watch on Friday section. Index Commentary The DJIA formed a large white candle…buyer were able to push through the 8,600 resistance level of the past two days…closed just above its 20 and 30 DMA…closed above its Oct. 10 intraday low for fourth straight day…9,000 continues as an important intermediate resistance level. The SPX formed a large white candle…closed above Oct. 10 low for the third straight day…buyers were able to push the SPX through the 865 resistance area …840 continues as a key support area and 915 a key resistance area. The Nasdaq formed a large white candle…buyers broke through the1,500 resistance area…closed just 10 points below its Oct. 10 low and above the Oct. 24 low. The RUT formed a large white candle and Tuesday’s a potential hanging man pattern was negated…closed one point above its Oct. 10 low…broke through the 450 key resistance area…the 20 and 30 DMA’s are the next resistance area. Stocks to Watch on Friday Leading Stocks: Holding Above 30 DMA TEVA… AXYS…AYE…CL…DV…EZPW…MMM…PCLN…PPD ANSS…ASIA…BAP…CBST…DLTR…ESI…FLR…FSTR…PRGO…RCI…SHW...TKC…WMS… AME…JCOM…JEC…NOV Moving Above 30 DMA AMX…AOB…ATK…BCR…CERN…CHTT…CHJ…CTSH…DGIT…FLIR…GILD…HAS…JW.A…LFC…MIG...MTD…OSIP…PCP…PCR…PSSI…RIO…SINA…SOHU…SWN…URBN…VIVO…VMI Moving Below 30 DMA None Staying Below 30 DMA RTN…AFAM…MYGN…GIS Wednesday’s Action Moving Up: BIDU, FSLR, SOHU, MA, DECK, PCLN, GS, STRA, CF, CLF, SCHN, POT, SINA, NUE, CNX, FWLT, X, MEE, AGU, BTU, ANR, V, BUCY, NDAQ, ESRX, HANS, MOS, IPI, MON, NIHD, AMZN, KMT, LDK, ONXX, INFY, EXPE, DRYS, LAMR, BRCM, MER, EBAY, GRMN, AEM, PNRA, KBE Moving Down: None Intermediate Term Market Trend: Neutral – DJIA, SPX, Down – Nasdaq, RUT Short Term Market Trend: Up

Rally Slows Down on Tuesday

DJIA + 36.08, +0.43% SP500 + 5.58, +0.66% NASDAQ Comp. - 7.67, -0.50% Russell 2000 + 6.38, +1.46% Exchange NYSE NASD Advancing 2,505 1,597 Declining 1,195 1,255 Oil $50.77 -$3.73 Gold $819.50 +$0.00 SOX 187.02 -4.18 VIX 60.90 -3.80 Strongest Sectors: XLF +5.83%...XLB +3.67%...XLU +1.99% Weakest Sectors: XLP +0.56%...XLV +0.66%...XLY +1.26% Sector Watch Up Trending: Sideways: XLE, XLP, XLU Down Trending: XLF, XLY, XLV, XLI, XLB, XLK The DJIA, SPX and RUT moved higher on Tuesday, however, upward momentum slowed down. With the Thanksgiving holiday on Thursday and a half trading day on Friday, which is traditionally the lightest trading volume day of the year, this is not overly surprising. Many traders will close positions out on Wednesday and not return until next week. The fact that profit taking did not push the indices below Monday’s S1 level shows that buyers are still in control. If markets move below Tuesday’s low or Monday’s S1 level, some traders will view this as an opportunity to take profits on short-term bullish trades. The Financial Sector, XLF, was the strongest sector again on Tuesday gaining more than 20% over the past two days. Airline stocks had positive gains on Tuesday with LCC and DAL gaining more than 14% and UAUA up over 24%. The SPX closed above its Oct. 10 low for the second straight and is trading in its sideways trend of the past 6 weeks once again. The Nasdaq and RUT are still trading below their October lows. Index Commentary The DJIA formed a white spinning top…sellers appeared at 8,600 level for the second day in a row…closed above its Oct. 10 intraday low for third straight day…watch R3 from Wednesday…8,500 continues as an important intermediate resistance level. The SPX formed a white spinning top…closed above Oct. 10 low for the second straight day…sellers appeared the 865 area for the second day…840 continues as a key support area and 915 a key resistance area. The Nasdaq formed a black spinning top…sellers came in at the 1,486 level…1,500 continues as a key resistance area…still trading below Oct. 10 and 24 lows. The RUT formed a potential hanging man pattern…closed above its Oct. 28 low…450 is still a key resistance area…still trading below Oct. 10 low. Stocks to Watch on Wednesday Leading Stocks Holding Above 30 DMA TEVA… AXYS…AYE…CL…DV…EZPW…MMM…PCLN…PPD ANSS…ASIA…BAP…CBST…DLTR…ESI…FLR…FSTR…PRGO…RCI…SHW...TKC…WMS Stocks Moving Above 30 DMA AME…JCOM…JEC…NOV Stocks Moving Below 30 DMA MIG…OSIP…SWN Stocks Staying Below 30 DMA RTN…AFAM…MYGN…VIVO…AOB…CERN…CHTT…FLIR…GILD…GIS…PSSI Tuesday’s Action Moving Up: STRA, BIDU, MA, FSLR, MON, GS, PNRA, HANS, UAUA, CNX, CF, LAMR, AEM, FWLT, ANR, PCLN, NUE, GDX, COH, ONXX, SINA, MS, SCHN, ZION, KBE, LCC Moving Down: ESRX, INFY Intermediate Term Market Trend: Neutral – DJIA, SPX, Down – Nasdaq, RUT Short Term Market Trend: Up

Markets in Moderate Pullback on Tuesday

1:23 ET DJIA -83...SPX -6.5....Nasdaq -28...RUT -5.6....Sox -5.5....Oil -$3.58 VIX -0.05 After an 1,150 point rally in the DJIA on Friday and Monday stock indices are taking a breather. From a traders perspective this is healthy. The key becomes where does the pullback stop? If support on this pullback becomes a higher low that is positive and becomes a potential entry point for short term bullish trades. Keey your eye on key support levels. For the indices that is the S1 and S2 levels of Monday's large white candle. If those levels hold and buyers step into the market at higher lows that will be a buying opportunity for traders. For the DJIA S1 is the 8,250 area and S2 is the 8,050 area. Since the DJIA has risen above its Oct. 1o low, that 7,882 level is significant relative to the direction of its 6-week intermediate term trend; neutral or down. At this moment the SPX is barely above its Oct. 10 low of 839, which is a key level for the index. Monday's S1 level is 826 and the S2 is 801. So watch the pullback in context of these key support levels. As of this moment only the DJIA has an Intermediate Term Trend reading of Neutral. The Nasdaq and RUT can not change today as they are still trading below their October lows. Airline, Financial, Utility, Basic Material and Healthcare stocks are showing some strength this morning. Tuesday's Early Action Moving Up: BIDU, STRA, UAUA, HANS, PNRA, MA, MON, FWLT, CNX, CF Moving Down: ESRX, ZION, PCLN, POT, AEM, X, BTU, GDX, FSLR, INFY, AMZN, DECK, NIHD, CLF, SOHU

DJIA and SPX Back Above October 10 Low

DJIA + 396.97, +4.93% SP500 + 51.78 +6.47% NASDAQ Comp. + 87.67, +6.33% Russell 2000 + 30.26, +7.44% Exchange NYSE NASD Advancing 3,261 2,211 Declining 489 724 Oil $54.50 +$4.57 Gold $819.50 +$27.70 SOX 191.20 +10.98 VIX 64.70 -7.97 Strongest Sectors: XLF +15.19%...XLY +7.85%...XLE +7.23% Weakest Sectors: XLU +1.01%...XLP +1.26%...XLV +1.99% Sector Watch Up Trending: Sideways: Down Trending: XLP, XLF, XLY, XLV, XLI, XLE, XLU, XLB, XLK The rally that began on Friday broadened as the SPX, Nasdaq and RUT had larger point and percentage gains on Monday than they did on Friday. On the NYSE the number of advancing issues increased by 56% and the number of declining issues fell by 54%. The Nasdaq advancers also increased while decliners fell. The Financial Sector, XLF, was the strongest sector up 15.19% on news of a government rescue plan for C which rose $2.18 or 57%. Our Intermediate Term Trend reading on the DJIA changed to Neutral because the index closed for the second straight day above the Oct. 10 low support area. The Intermediate Term Trend on the SPX, which closed above its Oct. 10 low today, will change to Neutral on Tuesday if the index stays above the Oct. 10 support tomorrow. Index Commentary The DJIA followed Friday’s bullish engulfing pattern with a large white candle that closed above Thursday’s R3, Wednesday’s R1 and R2…closed above its Oct. 10 intraday low for second straight day…watch R3 from Wednesday…8,500 important intermediate resistance level. The SPX confirmed Friday’s bullish harami with a large white candle…closed above Thursday’s R2 and R3 and R1 from Wednesday…closed above Oct. 10 low…840 is key support area and 915 a key resistance area. The Nasdaq confirmed Friday’s hammer with a large white candle…closed above Thursday’s R3 and Wednesday’s R1…1,500 is a key resistance area…still trading below Oct. 10 low. The RUT confirmed Friday’s bullish harami with a large white candle…closed above Thursday’s R2 and R3 and Wednesday’s R1…450 is a key resistance area…still trading below Oct. 10 low. Stocks to Watch Of the 31 stocks we listed to watch for the next trading day only one was negative on Friday or Monday. This is to point out the importance of mental flexibility and being prepared for a support bounce when the Chart Signals suggest a strong probability of a move occuring. Some of the gains on just the stocks were equal to more than some traders' annual gains. Read Thursday's post and look at Monday's gains below. We were expecting this technical bounce as we had posted this Thursday evening: "Stocks continue to be technically oversold in the short-term, so be alert for a potential short-term bounce Friday or Monday. This could provide a bullish move on the few leading stocks or a counter bounce on the many down trending stocks." The emphasis was as originally posted Thursday night. Stocks to Watch Posted on Thursday for Friday Support Bounce AXYS +5.21% Potential Support Bounce SRCL +1.74%...CHRW +4.49%...TEVA +0.50%...SHLD +16.06%...FAST +5.03% VMW +3.22%...WYNN +17.93% Stocks to Watch Posted on Weekend for Monday Potential Double Bottom VRTX +6.86%...MBT +27.96%...UA +7.94% ...FSYS +16.77%...DGX +2.53%...ESRX +5.94%...UTX +5.23%...ARG +2.62% Morning Star Patterns FAST +5.03%...PRE +4.74%...FMC +8.61% Potential Support Bounce TDS +11.73%...CMP +10.48%...OTEX +2.04%...AMAG +4.71%...ESI +8.92%...MHS +7.72%...RIMM +1.03% Support Bounce URS +34.42%...MMM +3.20%...AMGN +1.99% Potential Bull Flag ADM +7.53%...CBST +6.13%...MYGN +1.36% Stocks to Watch on Tuesday Support Bounce and Potential Double Bottom MBT...TDS...WYNN...CBST...ICE...HSC...NFLX...RIMM...WFC...USB...ZION...KEY...UYG...DE...PCP Leading Stocks Holding Above 30 DMA TEVA… AXYS…AYE…CL…DV…EZPW…MMM…PCLN…PPD Stocks Moving Above 30 DMA ANSS…ASIA…BAP…CBST…DLTR…ESI…FLR…FSTR…MIG…OSIP…PRGO…RCI…SHW…SWN…TKC…WMS Stocks Moving Below 30 DMA RTN Stocks Staying Below 30 DMA AFAM…MYGN…VIVO…AOB…CERN…CHTT…FLIR…GILD…GIS…PSSI

Monday’s Action Moving Up: FSLR, GS, STRA, MA, CNX, SOHU, AMZN, NIHD, V, MER, SCHN, PCLN, MS, ZION, ESRX, PNRA, KBE, KRE, NDAQ, X, BTU, NUE, MON, FWLT, SINA, MOS, CLF, BIDU, DECK, INFY, COH, KMT, BRCM, LDK, JASO, ONXX, GDX, MEE, IPI, ANR, AGU, GRMN, AEM, RF, UAUA, HANS, DRYS, BUCY, EBAY, EXPE Moving Down: POT Intermediate Term Market Trend: Neutral – DJIA, Down – SPX, Nasdaq, RUT Short Term Market Trend: Up

Rally Follows Through on Monday

As of 3 pm ET, the rally that began on Friday has continued to move higher. A quick look at key resistance areas to pay attention to: The DJIA which on Friday's close had moved back into the sideways trading range that started on October 10, is continuing to rise and has penetrated Thursday's R3 and Wednesday's R1...currently just below Wednesday's open...watch Wendesday's R2 and R3. Key resistance areas are 8,500 and 9,000. The SPX has moved back above its October 10 low and risen above Thursday's R2 and R3 levels as well as Wednesday's R1...840 is a key resistance/support area that the SPX is currently above...915 is the next key resistance area. The rally is broad with NYSE advancers leading decliners 3,168 to 545 and on the Nasdaq 2,111 to 810.

A Rally From Down Under

DJIA + 494.13, +6.54% SP500 + 47.59 +6.32% NASDAQ Comp. + 68.23, +5.18% Russell 2000 + 21.23, +5.51% Exchange NYSE NASD Advancing 2,049 1,777 Declining 1,161 1,170 Oil $49.93 +$0.51 Gold $791.80 +$43.10 SOX 180.22 +8.90 VIX 72.67 -8.19 Strongest Sectors: XLE +11.16%...XLU +10.00%...XLY +6.86% Weakest Sectors: XLV +0.13%...XLB +1.11%...XLI +2.95% Sector Watch Up Trending: Sideways: Down Trending: XLP, XLF, XLY, XLV, XLI, XLE, XLU, XLB, XLK Stocks rallied from down under support on Friday with the DJIA regaining more than Thursday’s loss and closing above support. The SPX, Nasdaq and RUT regained most of Thursday’s loss but closed just below Thursday’s close. Advancers led decliners by about a 2 to 1 margin which was a respite from Wednesday’s and Thursday’s 9 to 1 margin in favor of decliners. All nine sectors moved higher on Friday. We were expecting this technical bounce as we had posted this Thursday evening: "Stocks continue to be technically oversold in the short-term, so be alert for a potential short-term bounce Friday or Monday. This could provide a bullish move on the few leading stocks or a counter bounce on the many down trending stocks."

The emphasis was as originally posted Thursday night.

Maybe Chart Signals do work.

This is a counter trend rally and only the DJIA has moved above its recent support for a potential breakout and reversal. The DJIA barely broke through so it is too early to conclude that Friday is anything more that a short term technical bounce and counter trend move. Watch the short term resistance areas as stated below in Index Commentary for clues if this counter trend bounce sets up a potential reversal point.

Index Commentary The DJIA formed a bullish engulfing pattern…breaks above below its Oct. 10 intraday low…watch R3 from Thursday and R1 from Wednesday…8,500 important intermediate resistance level. The SPX formed a bullish harami…watch R2 and R3 from Thursday and R1 from Wednesday. The Nasdaq formed a hammer…watch R3 from Thursday and R1 from Wednesday. The RUT formed a bullish harami…watch R2 and R3 from Thursday and R1 from Wednesday.

Stocks to Watch Posted on Thursday for Friday Support Bounce AXYS +4.50% Potential Support Bounce SRCL +0.36% CHRW +9.38% TEVA +0.00% SHLD +1.23% FAST +10.05% VMW -3.42% WYNN +2.46

Stocks to Watch on Monday Potential Double Bottom VRTX...MBT...UA...FSYS...DGX...ESRX...UTX...ARG... Morning Star Patterns FAST...PRE...FMC Potential Support Bounce TDS...CMP...OTEX...URS...AMAG...ESI...MHS...RIMM Support Bounce URS...MMM...AMGN Potential Bull Flag ADM...CBST...MYGN Leading Stocks Holding Above 30 DMA TEVA Stocks Moving Above 30 DMA AXYS…EZPW…MMM…PCLN…PPD…RTN Stocks Moving Below 30 DMA None to report Stocks Staying Below 30 DMA AFAM…CL…DLTR…DV…MYGN…VIVO…ANSS…AOB…AYE…CBST…CERN…CHTT…ESI…FLIR…FSTR…GILD…GIS…PRGO…PSSI…SHW…SWN Friday’s Action Moving Up: CF, DECK, FSLR, AEM, MA, ;POT, PCLN, GDX, ESRX, CLF, X, AGU, ANR, NUE, MOS, BTU, FWLT, SINA, MEE, STRA, SOHU, AMZN, BIDU, KRE, NDAQ, PNRA, CNX, SCHN, IPI, GS, MON, INFY, BUCY, NIHD, COH, LDK, KMT, EBAY, MS Moving Down: V, ONXX, Intermediate Term Market Trend: Down Short Term Market Trend: Down

A Record Bear Market Pecentage Drop

DJIA - 444.99, -5.56% SP500 - 54.14, -6.71% NASDAQ Comp. - 70.30, -5.07% Russell 2000 - 27.07, -6.56% Exchange NYSE NASD Advancing 334 426 Declining 3,414 2,526 Oil $48.70 -$4.92 Gold $748.70 +$12.70 SOX 171.32 -5.78 VIX 80.86 +6.60 Strongest Sectors: XLI -2.68%...XLV -2.85%...XLP -3.48% Weakest Sectors: XLE -12.37%...XLF -10.74%...XLY -5.86% Sector Watch Up Trending: Sideways: Down Trending: XLP, XLF, XLY, XLV, XLI, XLE, XLU, XLB, XLK Thursday was a record day setting, a new record post WWII bear market percentage drop. The prior worst bear market was the 1973-1974 bear market which fell from high to low -46.5%. As of the close today, the DJIA was down from its October 9, 2007 high -46.68%. A new bear market record. All four broad indices have broken support and are again in an intermediate term downtrend.

Decliners again led advancers by a 9 to 1 margin. All nine sectors moved lower. Stocks experienced a technical bounce in the morning that faded as concerns over the auto industry and jobless data weighed on the market as sellers gained the upper hand sending stocks lower. Stocks continue to be technically oversold in the short-term, so be alert for a potential short-term bounce Friday or Monday. This could provide a bullish move on the few leading stocks or a counter bounce on the many down trending stocks. Oil dropped $4.92 sending the Energy ETF (XLE) down over 12%. Gold rose $12.70.

Index Commentary The DJIA large black candle…new 52 week closing low…breaks below its Oct. 10 intraday low. The SPX large black candle breaks support…new 52-week intraday and closing low. The Nasdaq formed a large black candle breaks support…new 52-week intraday and closing low. The RUT formed a large black candle breaks support…new 52-week intraday and closing low.

Trend Reversal Strategy RIMM stopped out at $44.70 today. The options closed out at 2.50 with a 41 cent gain or 19% gain. We stated in our Wednesday morning webcast that it would be valid to move the stop even higher in the current volatile market to lock in the strong one day gains, but that we would follow the strategy rules for illustrative purposes.

Stocks to Watch on Friday Support Bounce AXYS Potential Support Bounce SRCL, CHRW, TEVA, SHLD, FAST, VMW, WYNN Broke Support from Wednesday Stocks to Watch GILD…JNJ…IBM…BCR…CELG At Support PCP Below Support BA formed an inverted hammer…watch for a potential counter trend bounce Leading Stocks Holding Above 30 DMA TEVA Stocks Moving Below 30 DMA AFAM…CL…DLTR…DV…MYGN…VIVO Stocks Staying Below 30 DMA ANSS…AOB…AYE…CBST…CERN…CHTT…ESI…FLIR…FSTR…GILD…GIS…MMM…PCLN…PRGO…PSSI…SHW…SWN Thursday’s Action Moving Up: None in our Watchlist Moving Down: FSLR, POT, MA, MOS, AGU, CF, BTU, X, BUCY, MON, ANR, GS, ESRX, V, LDK, SOHU, CLF, NIHD, SCHN, FWLT, CNX, NUE, PCLN, IPI, STRA, KBE, KRE, NDAQ, ZION, RF, UAUA, MEE, SINA, MS, KMT, MER, DRYS, BIDU, LAMR, INFY, ONXX, AMZN, GRMN, PNRA Intermediate Term Market Trend: Down Short Term Market Trend: Down

SPX, Nasdaq and RUT Break Support

DJIA - 427.47, -5.07% SP500 - 52.54, -6.12% NASDAQ Comp. - 96.85, -6.53% Russell 2000 - 35.13, -7.85% Exchange NYSE NASD Advancing 303 336 Declining 3,390 2,568 Oil $53.62 -$0.77 Gold $736.00 +$3.30 SOX 177.10 -14.79 VIX 74.26 +6.62 Strongest Sectors: XLU -2.14%...XLP -2.57%...XLV -4.04% Weakest Sectors: XLF -10.47%...XLI -6.46%...XLY -6.42% Sector Watch Up Trending: Sideways: Down Trending: XLP, XLF, XLY, XLV, XLI, XLE, XLU, XLB, XLK Wednesday was a good old fashioned down day with all broad indices, sectors and most stocks moving lower. Decliners led advancers by a 9 to 1 margin. Concerns over the auto industry played a major role in the tone for the day. The price of GM and F indicates the market is not expecting much for these companies, but the real concern is the economic impact and the potential for more lost jobs should government help not be forth coming. Oil moved fell another 77 cents hitting a new 22 month low. Gold rose $3.30. The SPX, Nasdaq and RUT made new closing lows and can be considered to have broken support today. The SPX is 4% below its Oct. 10 low. The Nasdaq is 7% below its Oct. 24 low. The RUT is 6.6% below its Oct. 28 low. Only the DJIA closed above its Oct. 10 low today. Index Commentary The DJIA formed a large black candle…new 52 week closing low…holds above Oct. 10 intraday support low. The SPX large black candle breaks support…new 52-week intraday and closing low. The Nasdaq large black candle breaks support…new 52-week intraday and closing low. The RUT large black candle breaks support…new 52-week intraday and closing low. Trend Reversal Strategy RIMM stop was moved to $44.70 this morning. RIMM fell to 45.33 and did not stop out. Stocks to Watch on Thursday Potential Support Bounce or Break GILD…at support with a potential 5 point target JNJ…at support with a potential 4 point target IBM…at support with a potential 9 point target PCP…at support with a potential 6 point target BCR…at support with a potential 7 point target CELG…at support with a potential 6 point target Broke Support BA Leading Stocks Holding Above 30 DMA TEVA…VIVO Stocks Moving Below 30 DMA ANSS…AOB…AYE…CBST…CERN…CHTT…ESI…FLIR…FSTR…GILD…GIS…MMM…PCLN…PRGO…PSSI…SHW…SWN Stock Commentary CELG lower high…lower low…lower close at support ESRX large black candle…break support…target 49 GE large black candle…new 52-week low MMM large black candle…near support in sideways move…watch for bounce or break UTX large black candle no confirmation of Tuesday’s piercing line pattern HPQ shooting star after Tuesday’s gap up Wednesday’s Action Moving Up: None in our Watchlist Moving Down: BIDU, MA, FSLR, GS, POT, CF, SOHU, AEM, MON, ESRX, X, BTU, SCHN, V, DRYS, AMZN, BUCY, CLF, NUE, AGU, MOS, MEE, SINA, CNX, NDAQ, PNRA, UAUA, KBE, KRE, ZION, LCC, HANS, MS, PCLN, ANR, FWLT, GRMN, IPI, LDK, MER, DECK, INFY, KMT, ONXX, COH, LAMR, FMCN, GDX, RF Intermediate Term Market Trend: Down SPX, Nasdaq, RUT Short Term Market Trend: Down

Support Holds on Tuesday

DJIA + 151.17, +1.83% SP500 + 8.37, +0.98% NASDAQ Comp. + 1.22, +0.08% Russell 2000 - 3.79, -0.84% Exchange NYSE NASD Advancing 1,306 1,163 Declining 2,325 1,749 Oil $54.39 -$0.56 Gold $732.70 -$9.30 SOX 191.89 -3.83 VIX 67.64 -1.51 Strongest Sectors: XLE +2.80%...XLK +1.39%...XLP +0.69% Weakest Sectors: XLF -1.43%...XLB -1.12%...XLU -1.08% Sector Watch Up Trending: Sideways: Down Trending: XLP, XLF, XLY, XLV, XLI, XLE, XLU, XLB, XLK Stocks rallied late Tuesday moving the DJIA and SPX into positive territory for the day. However market breadth was weak as the Nasdaq was essentially even and the RUT was down for the day. Decliners led advancers by almost a 2 to 1 margin. Five sectors were up for the day while four were lower. Oil moved fell another 56 cents hitting a new 52-week low and continuing the down trend since July. Gold was down $9.30. Continue to maintain mental flexibility and trade with the current trading range (sideways trend – bullish at support and bearish at resistance) while at the same time being prepared to trade bearish if support breaks. Index Commentary The DJIA formed lower high and lower low …white spinning top bullish harami …held above Oct. 10 support. The SPX formed a hammer and bullish harami…closed at the S2 level of Thursday’s large white candle…closed above Thursday’s low. The Nasdaq formed a hammer and bullish harami…closed above Thursday’s intraday low. The RUT formed a hammer…made a new 52-week intraday and closing low…still forming potential double or triple bottom. Trend Reversal Strategy In our webcast Monday evening we demonstrated a a real-time virtual trade on RIMM because it met the criteria of our Trend Reversal Strategy that we shared in our October 25, 2008 post. We shared this strategy because we saw that several individual stocks were beginning to exhib it Trend Reversal characteristics at that time. We invite you to revistit that Strategy. Specificially RIMM's chart showed a potential double bottom pattern, a bullish engulfing candle pattern and a bullish divergence on the 14/5 stochastic. RIMM closed on Monday at 42.24 and we entered on Monday evening a Buy Stop to buy 10 December 55 calls if RIMM rose to 42.82 on Tuesday morning. A stop contingent on the order being filled was entered at a stock price of 37.72. The order was triggered at 7:31 am and filled at 2.09 per contract. RIMM rose $5.01 or 11.86% from Monday's close and the Dec 55 calls closed at 3.45, a gain of $1.36 or 65% from our Tuesday morning entry. The trailing stop is moved up to 44.70 after the first day. Stocks to Watch on Wednesday Potential Bull Flag GILD…forms low day hammer Potential Trend Reversal IBM Leading Stocks Holding Above 30 DMA TEVA…GIS…MMM…VIVO…AYE…FLIR…PSSI Stocks Moving Above 30 DMA ANSS…CERN…CHTT…CL…PCLN…PRGO…SHW Moving Below 30 DMA ASIA…ESRX…JCOM…LFL… Stock Commentary CELG lower high…lower low…lower close in sideways pattern ESRX lower high…lower low…lower close…holding support GE doji…no confirmation of hammer, inverted hammer or Monday’s bullish harami MMM piercing line patter on bounce off 30 DMA UTX lower high…lower low…piercing line pattern HPQ gaps higher forms dragonfly doji on strong than expected preliminary Q4 results and full year results Tuesday’s Action Moving Up: MA, PCLN, PNRA, V, SOHU, LDK, AEM, MS, POT, STRA Moving Down: DECK, BIDU, FSLR, ANR, BTU, FWLT, SCHN, MEE, NIHD, AMZN, DRYS, BUCY, CLF, ESRX, NDAQ, GRMN, CNX, NUE, Intermediate Term Market Trend: Neutral – 5 weeks Short Term Market Trend: Down

Dow Continues Pullback to Support

DJIA - 223.73, -2.63% SP500 - 22.54, -2.58% NASDAQ Comp. - 34.80, -2.29% Russell 2000 - 5.22, -1.14% Exchange NYSE NASD Advancing 899 933 Declining 2,769 1,935 Oil $54.95 -$2.09 Gold $742.00 -$0.50 SOX 195.72 -5.67 VIX 69.15 +2.84 Strongest Sectors: XLU -0.17%...XLP -1.32%...XLV -1.72% Weakest Sectors: XLF -6.36%...XLY -2.87%...XLK -2.84% Sector Watch Up Trending: Sideways: Down Trending: XLP, XLF, XLY, XLV, XLI, XLE, XLU, XLB, XLK Stocks moved down towards the horizontal support level from which they rose just last Thursday. Oil moved lower on the day forming a new 52-week. The Financial Sector was the weakest sector on Monday as C announced 50,000 job cuts. Watch closely on Tuesday as indexes trade near support. Watch for a support bounce or break. Traders should maintain mental flexibility and trade with the higher probability of a trading range (sideways trend – bullish at support and bearish at resistance) while at the same time being prepared to trade bearish if support breaks. Index Commentary The DJIA formed lower high and lower low …pulled back to Thursday’s S2 support level. The SPX formed a lower high and lower low…closed at the S2 level of Thursday’s large white candle…closed above Thursday’s low. The Nasdaq formed an inverted hammer…a lower high and higher low…a new closing low…closed above Thursday’s intraday low. The RUT formed a lower high and higher low…while trading above Thursday’s intraday low…still forming potential double or triple bottom. Stocks to Watch on Tuesday Potential Bull Flag GILD Potential Trend Reversal RIMM Leading Stocks Holding Above 30 DMA Breaking Below Support WYNN TEVA…ESRX…GIS…MMM…PRGO…VIVO Stocks Moving Above 30 DMA AYE…FLIR…JCOM…LFL…PSSI Moving Below 30 DMA ANSS…BLUD…CELG…DNA…EZPW…PRGO…RCI…RTN…SHW Stock Commentary CELG lower high…lower low…lower close pullback ESRX lower high…lower low…lower close…holding support GE bullish harami…no confirmation of Friday’s inverted hammer or Thursday’s hammer MMM lower high…lower low…holding at 30 DMA UTX lower high…lower low…lower close Monday’s Action Moving Up: STRA, PCLN Moving Down: BIDU, MA, GS, CF, DECK, AEM, IPI, ZION, SOHU, BUCY, AMZN, LAMR, V, MER, FSLR, AGU, ANR, X, SCHN, NDAQ, KBE, BTU, MOS, GDX, NUE, SINA, MS, CNX, GRMN, ONXX, KMT Intermediate Term Market Trend: Neutral – 5 weeks Short Term Market Trend: Down

Stocks Pull Back on Friday

DJIA - 337.94, -3.82% SP500 - 38.00, -4.17% NASDAQ Comp. - 79.85, -5.00% Russell 2000 - 34.71, -7.07% Exchange NYSE NASD Advancing 773 605 Declining 2,780 2,261 Oil $57.04 -$1.20 Gold $742.50 +$37.50 SOX 201.39 -13.76 VIX 66.31 +6.48 Strongest Sectors: XLY +2.98%...XLB +1.16%...XLI +0.86% Weakest Sectors: XLE -4.15%...XLK -4.57%...XLU -2.37% Sector Watch Up Trending: Sideways: Down Trending: XLP, XLF, XLY, XLV, XLI, XLE, XLU, XLB, XLK On Friday stocks opened and moved lower until mid-day when a rally drove the DJIA up 400 points to 8,900. Then the market began a 400 point sell off during the last 45 minutes of the day with the DJIA closing near 8,497. Decliners led advancers by a large margin and six of nine sectors moved lower. Since the October 10 low in the DJIA, the SPX, Nasdaq and RUT have all made intra-day lower lows. The DJIA so far has held above its October 10 low. As we posted on October 10, if support did hold building a new base would take at least four to eight weeks. The market is five weeks into that process and still looks like a new base building. Traders need to maintain mental flexibility and trade with the higher probability of a trading range (sideways trend – bullish at support and bearish at resistance) while at the same time being prepared to trade bearish if support breaks. We returned Thursday night from teaching a two-day workshop to more than 200 traders on advanced and combination option strategies. The workshop was a succes and many of those in attendance let us know it made an important difference for them. One trader described it this way; "Great workshop in LA! I really enjoyed learning the strategies of combination options from you. I have learned many valuable lessons from this workshop but the lessons I value the most are your comments about a trader's mentality: attitude, discipline, and consistency. I know I struggle with this the most; it has always been a battle within. Your comments have inspired me to take a more disciplined approach to trading. Thank you for motivating and enlightenign me! I have learned so much about myself trading in the past 2 months trading. I never expected to be analyzing myself more than the stock charts." Index Commentary The DJIA formed a higher high and higher low with sellers appearing at the 30 DMA…pulled back to Thursday’s S1 support level while closing lower for the day. The SPX moved slightly above Thursday’s high before pulling back to the S1 level of Thursday’s large white candle…still above Thursday’s low. The Nasdaq formed a lower high and higher low…an inside day…closed near the open or mid-point of Thursday’s price bar. The RUT formed a lower high and higher low…an inside day…closed near Thursday’s open…still forming potential double or triple bottom.

Stocks to Watch on Monday Leading Stocks Holding Above 30 DMA EZPW…TEVA…ANSS…BLUD…CELG…DNA…ESRX…GIS…MMM…PRGO…RCI…RTN…SHW…VIVO Stocks Moving Above 30 DMA No new stocks listed for Friday. 23 of the 35 stocks that moved above their 30 DMA on Thursday fell below their 30 DMA on Friday…the 12 that stayed above are listed just above. Stock Commentary CELG higher high…higher low…lower close pullback ESRX higher high…higher low…lower close…inverted hammer at support GE inverted hammer…did not confirm bullish harami and hammer from Thursday MMM higher high…higher low…lower close doji UTX higher high…higher low…lower close inverted hammer Friday’s Action Moving Up: STRA, IPI Moving Down: BIDU, FSLR, MON, CF, DECK, AMZN, POT, MA, GS, AGU, BTU, MEE, NUE, CNX, NDAQ, ZION, ESRX, KRE, SOHU, FWLT, X, ANR, MOS, GRMN, SCHN, SINA, PCLN, MS, GDX, DRYS, CLF, INFY, NIHD, EBAY, COH, ONXX, FMCN, BRCM, HANS, UAUA, RF, LCC Intermediate Term Market Trend: Neutral – 5 weeks Short Term Market Trend: Neutral

The Dow Bounces Over 900 Points At Support

DJIA + 552.59, +6.67% SP500 + 58.99, +6.92% NASDAQ Comp. + 97.54, +6.50% Russell 2000 + 38.43, +8.49% Exchange NYSE NASD Advancing 2,650 2,089 Declining 919 799 Oil $58.24 +$2.08 Gold $705.00 -$13.30 SOX 215.15 +14.36 VIX 59.83 -6.63 Strongest Sectors: XLE +11.75%...XLB +8.14%...XLY +7.81% Weakest Sectors: XLP +4.00%...XLV +5.36%...XLI +5.36% Sector Watch Up Trending: Sideways: Down Trending: XLP, XLF, XLY, XLV, XLI, XLE, XLU, XLB, XLK After the DJIA fell to 7,965 around 1 pm ET buyers stepped into the market just like they had on 10, 16 and 22 to 27. Just last night we posted; “If the DJIA 7,882 to 8,143 support area is good we should see big money step in and begin to buy in that area as they did on Oct. 10, 16, 22, 23, 24, 27 and 28. Thursday and Friday become a major retest area.” And did they buy…while the DJIA rose 552.59 from yesterday’s close, the range from the low to the high on Thursday was 911.17 points. The daily range on October 13, the single largest daily point rise in Dow history, was 965.81. The daily range on October 28, the second largest daily point rise in Dow history, was 907.35. Today’s point rise from its intraday was equivalent to record setting days. So are the big money buyers still there in the area of support? Yes and in a very big way just like they have been since October 10.

Check out our leading stocks crossing above their 30 DMA today...Wow...35 stocks!

As we posted Wednesday, "If traders have been trading the short-term trend correctly they are already in short-term bearish trades and could be looking to lock in profits if support holds." We hope you were prepared to lock in profits as the markets did bounce today! Index Commentary The DJIA formed a bullish engulfing pattern…outside day…broke broke through the R1, R2 and R3 levels of Thursday’s large black candle…rose to 20 DMA…bounced at major support area. The SPX formed a bullish engulfing pattern…outside day…potential ripple bottom bounce. The Nasdaq fell to new 52-week low…formed a bullish engulfing pattern…outside day…broke through Thursday’s high. The RUT formed a bullish engulfing pattern…outside day…broke through the R1, R2 and R3 level of Thursday’s large black candle…formed a lower low that negated the potential head and shoulders bottom…forming potential double or triple bottom. Stocks to Watch on Friday Leading Stocks Holding Above 30 DMA EZPW…TEVA 35 Stocks Moving Above 30 DMA AMED…AMX…ANSS…AXYS…AYE…BAP…BCR…BIIB…BLUD…CELG…CHU…CL…DNA…ESRX…FLIR…GIS…JCOM…JW.A…LFL…MMM…MTD…OSIP…PRGO…PSSI…PSYS…QSII…RCI…RIO…TN…SAY…SHW…TECH…UTX… VIVO…WMS Stock Commentary CELG higher low…outside day…support bounce ESRX bullish engulfing…higher low GE hammer…bullish harami MMM bullish engulfing pattern TECH outside day…support bounce…higher low UTX higher low…outside day Thursday’s Action Moving Up: FSLR, MA, CF, BIDU, SOHU, PCLN, POT, CNX, NUE, BTU, ANR, MOS, X, IPI, AGU, AEM, MON, SCHN, GS, STRA, BUCY, AMZN, CLF, V, COH, ZION, PNRA, MEE, GDX, KRE, ESRX, KBE, DRYS, KMT, INFY, LAMR, DECK, NIHD, EBAY, BRCM, LDK, ONXX, UAUA, LCC, GRMN, SINA, FWLT, MS, HANS, RF, Moving Down: None In Our Watchlist Intermediate Term Market Trend: Neutral – 4 weeks Short Term Market Trend: Neutral

Stock Indexes Approach Support

DJIA - 411.30, -4.73% SP500 - 46.65, -5.19% NASDAQ Comp. - 81.69, -5.17% Russell 2000 - 29.49, -6.11% Exchange NYSE NASD Advancing 323 412 Declining 3,250 2,504 Oil $56.16 -$3.17 Gold $718.30 -$14.50 SOX 200.79 -10.64 VIX 66.46 +5.02 Strongest Sectors: XLP -2.14%...XLV -2.21%...XLU -3.32% Weakest Sectors: XLE -8.19%...XLB -6.36%...XLF -6.16% Sector Watch Up Trending: Sideways: Down Trending: XLP, XLF, XLY, XLV, XLI, XLE, XLU, XLB, XLK Stocks, oil and gold moved lower on Wednesday near the area of support established since October 10. If the DJIA 7,882 to 8,143 support area is good big money should step in and begin to buy in that area as they did on Oct. 10, 16, 22, 23, 24, 27 and 28. Watch this major support area on Thursday and Friday for a potential bounce or break. This is an important retest of the October lows. If traders have been trading the short-term trend correctly they are already in short-term bearish trades and could be looking to lock in profits if support holds. If support breaks they could hold existing bearish trades or enter new bearish trades as stocks break support. Even though oil moved lower airline stocks which have been relatively stronger moved lower on concerns for falling demand in air travel related to the current economic slowdown. Index Commentary The DJIA broke below the Oct. 28 S1 support and fell near the S2 level forming a large black candle…approaching major support area. The SPX also broke the Oct. 28 S1 support…nearing 839 Oct. 10 low. The Nasdaq fell to within 6 point of its Oct. 24 low at 1,493…forming a large black candle. The RUT formed a large black candle falling within 11 point of its Oct. 28 low…a lower low would negate the potential head and shoulders bottom. Stocks to Watch on Thursday Leading Stocks Holding Above 30 DMA EZPW…TEVA Stocks Falling Below 30 DMA ANSS…BCR…BIIB…BLUD…ESRX…LFL…OSIP…PRGO…QSII…RTN…SAY…TECH…UTX Monday’s At Resistance Stocks Again Moved Lower on Wednesday CLI -6.66%…AVP -9.34%…DB -10.93%…CRDN -3.41%…SPG -10.98%…DRIV -6.18% Wednesday’s Action Moving Up: None in our Watchlist Moving Down: FSLR, POT, BIDU, GS, STRA, CF, DECK, MON, MA, X, ZION, AMZN, LDK, BUCY, SOHU, CLF, V, INFY, UAUA, NDAQ, PNRA, ESRX, LCC, KRE, KBE, MOS, PCLN, IPI, BTU, NUE, AGU, CNX, AEM, MEE, SCHN, GDX, FWLT, MS, ANR, MER, KMT, NIHD, ONXX, DRYS, GRMN, SINA, JASO, BRCM, COH, FMCN, LAMR, EBAY Intermediate Term Market Trend: Neutral – 4 weeks Short Term Market Trend: Down

Oil, Gold and Stocks Move Lower on Tuesday

DJIA - 176.58, -1.99% SP500 - 20.26, -2.20% NASDAQ Comp. - 35.84, -2.22% Russell 2000 - 10.81, -2.19% Exchange NYSE NASD Advancing 674 723 Declining 2,889 2,119 Oil $59.33 -$3.08 Gold $732.80 -$13.70 SOX 211.43 -3.05 VIX 61.44 +1.46 Strongest Sectors: XLU +0.00%...XLV -1.79%...XLK -2.16% Weakest Sectors: XLB -3.98%...XLY -3.49%...XLF -3.48% Sector Watch Up Trending: Sideways: Down Trending: XLP, XLF, XLY, XLV, XLI, XLE, XLU, XLB, XLK Eight of nine sectors moved lower on Tuesday as the DJIA, SPX, Nasdaq and RUT headed lower towards support. The broad indexes continue in their sideways trading range of the past four weeks moving from resistance to support. Oil and gold also fell on Tuesday. Oil slipped below $60 a barrel for the first time in over a year continuing the intermediate term down trend that we have continually pointed out for more than 3 months. We pointed out on our Monday webcast that the breaking of the 62.45 support on Monday gave a new short-term price target of 53.40 a barrel. Index Commentary The DJIA fell and bounced off the S1 support of its Oct. 28 large white candle…again failed to confirm Friday’s bullish harami. The SPX also fell and bounced off the S1 support of its Oct. 28 candle…failed to confirm Friday’s bullish harami. The Nasdaq traded found support just below the Oct. 28 S1 support level…broke Thursday support low…failed to confirm Friday’s bullish harami. The RUT fell below Monday’s low and closed near its low of the day without a support bounce like the other indexes…did not confirm Friday’s bullish harami…continues to form a potential head and shoulders bottom. Stocks to Watch on Wednesday Leading Stocks Holding Above 30 DMA ANSS…BCR…BIIB…BLUD…EZPW…LFL…OSIP…QSII…RTN….SAY…TECH…TEVA…ESRX…PRGO…UTX Stocks Falling Below 30 DMA BAP…CELG…CHTT…CTSH…DNA…ICON…KNL…MBT…SHW…SYNA…TKC…VIP Monday’s At Resistance Stocks Moved Lower on Tuesday CLI…AVP…DB…CRDN…SPG…DRIV Tuesday’s Action Moving Up: GS, V, BUCY Moving Down: BIDU, SOHU, FSLR, FMCN, CLF, SINA, MON, BTU, CNX, MOS, FWLT, CF, DRYS, AGU, AEM, POT, X, GDX, MA, SCHN, ANR, IPI, PNRA, STRA, AMZN, LDK, NIHD, DECK, INFY, ZION, NUE, GRMN, MEE, ONXX Intermediate Term Market Trend: Neutral – 4 weeks Short Term Market Trend: Down

Stocks Pull Back in Continuing Trading Range

DJIA - 73.27, -0.82% SP500 - 11.78, -1.27% NASDAQ Comp. - 30.66, -1.86% Russell 2000 - 12.69, -2.51% Exchange NYSE NASD Advancing 1,155 857 Declining 2,372 1,985 Oil $62.41 +$1.37 Gold $746.50 +$12.30 SOX 214.48 -8.71 VIX 59.98 +3.88 Strongest Sectors: XLE +0.34%...XLP +0.29%...XLI +0.04% Weakest Sectors: XLF -2.95%...XLU -2.41%...XLY -2.32% Sector Watch Up Trending: Sideways: Down Trending: XLP, XLF, XLY, XLV, XLI, XLE, XLU, XLB, XLK Buyers came in early Monday to follow through on Friday’s rally but a sell off began in the first 30 minutes and by mid-day E.T. the broad indexes were turning negative. While the DJIA and SPX kept more than half of Friday’s gains, the Nasdaq gave back more than 75% its gains and the RUT fell more on Monday than it rose on Friday. Monday is a good example of why pre-market futures are an inconsistent guide to the trading day. Today was just another example of futures being up nicely and the open and the market finishing down for the day. Both gold and oil rose on Monday and commodity related stocks gold, coal oil, steel and Ag-related were relatively strong. Solar stocks were weak on Monday as were financial and tech stocks especially semiconductors. The market continues to trade in the current sideways trading range since the October 10 low bouncing between support and resistance. The failure of all four broad indexes to confirm Friday’s bullish harami is classic sideways trading range price action; Buyers and sellers fighting it out. As we wrote on Friday;”Either way Monday should prove to be an exciting day of market action as buyers and sellers continue to battle it out.” And sure it enough that’s exactly the way it was. Index Commentary The DJIA rose to its 30 DMA where sellers pushed it back to close under its 20 DMA…failed to confirm Friday’s bullish harami. The SPX rose above and then closed below its 20 DMA…failed to confirm Friday’s bullish harami. The Nasdaq traded and above and then closed below its 20 DMA and failed to confirm Friday’s bullish harami. The RUT gapped up to its 20 DMA and sold off below Thursday’s low…did not confirm Friday’s bullish harami…continues to form a potential head and shoulders bottom. In the DJIA, SPX and Nasdaq Thursday’s low and Monday’s high is the key short-term support and resistance areas to watch. On the RUT it is Monday’s high and low. Stocks to Watch on Tuesday Leading Stocks Breaking Above 30 DMA ESRX...PRGO...SHW...UTX Support Bounce FLS...VMI...MTD...AZO...SYNA...UNP...BNI At Resistance CLI...AVP...DB...CRDN...SPG...DRIV Stock Commentary PCLN pulled back at its 30 DMA for the second straight day. ONXX rose further confirming its breakout out of head and shoulders bottom with price target of $34.50 NVDA pulled back after rising to 9.10 and did not breakout above $9.11…pulling back from its 50 DMA to the support of its 30 DMA. Monday’s Action Moving Up: ANR, BTU, AEM GDX, POT, CF, CNX, BUCY, ONXX, ESRX, STRA, HANS Moving Down: FSLR, BIDU, GS, MA, DECK, LAMR, V, MER, PNRA, NIHD, LDK, NDAQ, ZION, KMT, JASO, RYS, AMZN, MS, KBE Intermediate Term Market Trend: Down Short Term Market Trend: Down

Four Weeks and Counting...

DJIA + 248.02, +2.85% SP500 + 26.11, +2.89% NASDAQ Comp. + 38.70, +2.41% Russell 2000 + 9.95, +2.01% Exchange NYSE NASD Advancing 2,386 1,781 Declining 1,046 1,074 Oil $61.04 +$0.27 Gold $734.20 +$2.00 SOX 219.44 +3.75 VIX 56.10 -7.58 Strongest Sectors: XLK +4.17%...XLF +1.27%...XLB +0.08% Weakest Sectors: XLY -1.21%...XLU -1.20%...XLI -0.86% Sector Watch Up Trending: Sideways: Down Trending: XLP, XLF, XLY, XLV, XLI, XLE, XLU, XLB, XLK It has been four weeks since the October 10 low and the market continues to build a base with buyers becoming more aggressive and sellers less aggressive during the past two weeks. The base building is not over and it is still not possible to say with certainty that October 10 is the bottom, but each day has been adding positive technical action on the chart. In our Thursday night webcast we pointed out that the short-term Momentum line was in the lower reversal zone for the second straight day and said that the indicator seldom spends more than two days, so don’t be surprised if the market moves up within a day or two. We also referred to our comments of the past four weeks regarding the October 10 low and how if that support level did hold that it would likely take at least four to eight weeks to build a base from which a new up trend could move. We also reiterated how the buying in the market had become more aggressive and the selling less aggressive last week until Tuesday of this week. We also said that if the market did bounce from a higher low that would be further indication that buyers were getting more aggressive. On Friday buyers stepped in and this time from the 8,640 level on the DJIA. If stocks follow through and continue to move higher on Monday watch the price action for strength or weakness at the 9,650 horizontal resistance level on the DJIA during the week. Either way Monday should prove to be an exciting day of market action as buyers and sellers continue to battle it out. Index Commentary The DJIA closed just below its 20 DMA after bouncing off the S1 level of the October 28 large white candle…formed a bullish harami. The SPX bounced off the S1 level of its October 28 large white candle at 900 and formed a bullish harami. The Nasdaq closed bounced off the S1 support level of its October 28 large white candle at 1,600 and formed a bullish harami. The RUT bounced off the 495 support level and formed a bullish harami…continues to form a potential head and shoulders bottom. Stocks to Watch on Monday Leading Stocks Breaking Above 30 DMA ANSS…BAP…BCR…BIIB…BLUD…CTSH…DNA…EZPW…FLR…GIS…KNL…LFL…MBT…OI…OSIP…QSII…RTN…SAY…TECH…TEVA…TKC…VIP…WMS Stock Commentary PCLN rose after better than expected earnings Thursday afternoon, watch for potential double bottom breakout. ONXX gapped up after better than expected earnings Thursday, broke out of head and shoulders bottom with price target of $34.50 NVDA rose after positive earnings on Thursday, bounced from higher low…watch for breakout above $9.11. RRGB after a gap down rose to form a large white candle after positive earnings on Thursday…broke through old support resistance at 13. HANS rose from a higher low after a positive earnings report on Thursday...forming higher low? FLR rose from a positive earnings report Thursday...forming a head and shoulders bottom…watch for potential breakout and chart price target of 58. DIS gapped lower and then rose on Friday after reporting 43 cents earnings below estimates of 49 cents a share on Thursday…potential triple bottom? Friday’s Action Moving Up: BIDU, PCLN, FSLR, CF, ONXX, MA, AEM, CNX, MOS, SCHN, STRA, ESRX, HANS, ZION, NUE, X, POT, BTU, AGU, MEE, AMZN, V, INFY, LDK, BUCY, LAMR, IPI, SINA, Moving Down: DECK, GS, NDAQ, DRYS Intermediate Term Market Trend: Down Short Term Market Trend: Down

Stocks, Oil, Gold Fall For Second Day

DJIA - 443.48, -4.85% SP500 - 47.89, -5.03% NASDAQ Comp. - 72.94, -4.34% Russell 2000 - 18.80, -3.65% Exchange NYSE NASD Advancing 598 634 Declining 2,893 2,244 Oil $60.77 -$4.53 Gold $732.20 -$10.20 SOX 219.44 -16.81 VIX 63.68 +9.12 Strongest Sectors: XLP -1.07%...XLV -2.43%...XLI -4.69% Weakest Sectors: XLF -6.87%...XLE -6.02%...XLK -5.52% Sector Watch Up Trending: Sideways: Down Trending: XLP, XLF, XLY, XLV, XLI, XLE, XLU, XLB, XLK For the second day in a row all of our watchlist stocks were down. This is not negative since many of readers know how to trade the downside wheter shorting stocks, put options or advanced option strategies. All nine sectors moved lower with Financials, XLF, leading the way and Energy, XLE, was the second weakest sector. Oil and Gold and related stocks moved lower on Thursday. Index Commentary The DJIA closed below its 20 DMA and at the S1 level of the October 28 large white candle. The SPX closed below its 20 DMA and at the S1 level of the October 28 large white candle. The Nasdaq closed below its 20 DMA falling for the second straight day. The RUT formed closed below its 20 DMA…may be in process of forming a head and shoulders bottom. Thursday’s Action Moving Up: None in our watchlist Moving Down: MA, FSLR, BIDU, POT, GS, CNX, X, PCLN, ANR, BTU, MOS, FWLT, CLF, V, AMZN, BUCY, CF, DECK, DRYS, SOHU, AEM, ESRX, NDAQ, AGU, MON, NUE, SCHN, INFY, LDK, FMCN, COH, NIHD, KMT, MER, SINA, MS, MEE, GDX, IPI, GRMN, ZION, KBE, HANS Intermediate Term Market Trend: Down Short Term Market Trend: Down

Profit Taking Drives Stocks Down From Resistance

DJIA - 486.01, -5.05% SP500 - 52.98, -5.27% NASDAQ Comp. - 98.48, -5.53% Russell 2000 - 31.13, -5.74% Exchange NYSE NASD Advancing 690 596 Declining 2,765 2,272 Oil $65.30 -$5.23 Gold $742.40 -$14.90 SOX 236.25 -11.46 VIX 54.56 +6.83 Strongest Sectors: XLV -1.47%...XLP -1.77%...XLU -1.85% Weakest Sectors: XLF -9.15%...XLK -6.05%...XLY -5.52% Sector Watch Up Trending: Sideways: Down Trending: XLP, XLF, XLY, XLV, XLI, XLE, XLU, XLB, XLK Tuesday’s Election Day rise into resistance reversed on Wednesday as profit takers sold at resistance. The decline was relatively modest until just before mid-day when the sell off accelerated. Wednesday’s sell off took back all of Tuesday’s gain and more. Stocks, oil and gold all fell pulling over 75% stocks down on both the NYSE and Nasdaq. The sell-off was broad as all nine sectors moved lower. Many stocks, like the DJIA and other indices, over the last six days had moved into the horizontal resistance, established since October 14. The broad indices have been in a sideways trading range over the past three weeks bouncing between support and resistance. Wednesday’s move down did break the low of the high day creating an entry signal for short-term bearish trades on many stocks, ETFs and indices. The price action was also an exit signal for many short-term bullish trades. Index Commentary The DJIA formed a bearish engulfing pattern in the area of horizontal resistance candle closing below its 30 DMA. The SPX formed a bearish engulfing like pattern closing below its 30 DMA and near its 20 DMA. The Nasdaq formed a large black candle that broke the low of the high day and closed at its 20 DMA. The RUT formed a large black candle falling from horizontal resistance, breaking the low of the high day and closing just below its 20 DMA. Wednesday’s Action Moving Up: None in our watchlist Moving Down: FSLR, BIDU, MA, GS, POT, ANR, MON, AMZN, CF, DECK, SOHU, V, NUE, CNX, FWLT, MEE, X, MOS, BTU, IPI, SCHN, SINA, ZION, KRE, KBE, PNRA, CLF, NIHD, LDK, BUCY, MER, INFY, FMCN, DRYS, MS, AEM, PCLN, KMT, JASO, ONXX, HANS, LCC, UAUA, RF, NDAQ, STRA, AGU, GRMN, EBAY, EXPE, LAMR Intermediate Term Market Trend: Down Short Term Market Trend: Neutral

Election Day: Stocks, Oil, Gold Rise Big

DJIA + 305.45, +3.28% SP500 + 39.45, +4.08% NASDAQ Comp. + 53.79, +3.12% Russell 2000 + 7.47, +1.39% Exchange NYSE NASD Advancing 2,779 1,843 Declining 743 1,041 Oil $67.81 +$6.62 Gold $757.30 +$30.50 SOX 247.71 +10.61 VIX 47.71 -5.95 Strongest Sectors: XLE +6.44%...XLF +5.63%...XLB +4.69% Weakest Sectors: XLV +1.31%...XLP +1.47%...XLU +1.88% Sector Watch Up Trending: Sideways: Down Trending: XLP, XLF, XLY, XLV, XLI, XLE, XLU, XLB, XLK After falling through its 30 DMA on Monday, the VIX dropped another 5.95 points or 11.08% to close at 47.72 on Election Day. The closing high for the VIX was October 27 at 80.06. In just a week and a half the VIX has fallen by 40% while the markets have risen. Oil prices rose for the second day in a row, rising 10.36%. Energy stocks were the leading sector as a result. Gold rose $30.50 and commodity related stocks also performed well on Election Day. The broad market indexes rose into the zone of resistance formed on October 14. Today the DJIA had a higher close than on October 14 and this is the highest close since Monday, October 6. Additionally all nine sectors closed higher with XLE, XLF and XLB the strongest on Tuesday. The DJIA closed above its 30 DMA for the first time since September 8. The SPX closed a point above its 30 DMA, which is its first close above that level since September 2. The Nasdaq and RUT are still below their respective 30 DMA. While it is still too early to say a new uptrend has begun, there is certainly more and more technical evidence each day that the big money institutions are becoming more aggressive in their buying and less aggressive in their selling. Our blog post on October 10, “Is this the beginning of the down trend?” appears more and more insightful every single day. What were you feeling on October 10 and how far off did you think we were when we posted that day? Most stocks in our watchlist had very solid gains on Tuesday...see Tuesday's action below. Index Commentary The DJIA formed a large white candle closing above its 20 DMA in the area of horizontal resistance. The SPX formed a large white candle that continued the short term uptrend…Monday’s inside day was a pause rather than a short term reversal…closed a point above its 30 DMA. The Nasdaq formed a spinning top 16 points below it 30 DMA in the area of horizontal resistance. The RUT formed a spinning top in the area of resistance. Tuesday’s Action Moving Up: BIDU, MA, FSLR, POT, V, MON, GS, AEM, FWLT, MOS, BUCY, DECK, CLF, SOHU, AMZN, CF, X, GDX, IPI, CNX, SINA, AGU, SCHN, ZION, NDAQ, KBE, PNRA, KRE, ANR, NUE, PCLN, MEE, BTU, FMCN, NIHD, INFY, LDK, MER, EBAY, JASO, MS, RF Moving Down: STRA, UAUA, LCC, Intermediate Term Market Trend: Down Short Term Market Trend: Up

ALERT: DJIA Breaks 30 DMA to the Upside

The DJIA has an intra-day Upside Breakout on its 30 DMA. The SPX is just below its 30 DMA with a potential breakout setting up. The Nasdaq and RUT are moving towards their respective 30 DMA.

VIX Gives Clue on Monday to Stocks Big Election Day

Last night in my internet commentary, I was asked about why the SPX and VIX were not consistent on Monday. The listener noticed that the SPX was unchanged and the VIX had moved down. I responded that it was not inconsistent and that the correlation was not always 100% from moment to moment. I added that sometimes the VIX will act ahead of the market and give us a clue of what the market is going to do. Tuesday morning it looks like the market is not doing what some in the media said was happening on Monday...that the market was waiting for the outcome of the presidential electon on Tuesday. At 11:49 ET the DJIA and SPX are up over the 3%. The VIX on Monday did give us the clue that the market was ready to move higher on Tuesday. Maybe the market is just glad to have the election process done, regarless of the outcome? Oil is also moving higher, so energy and commodity related stocks are having a big day also..airline stocks are not. MA and V up big Tueday morning. Check out the big 6 to 17% gains on these stocks: JASO, AEM, FWLT, IPI, MA, V, GDX, MOS, MEE, BTU, AGU, BUCY, CLF, LDK FSLR, FMCN, NIHD, BIDU, SCHN, CNX, POT, ANR, X, MON, ZION.

Lighther Volume, Lower Volitility and Smaller Trading Range

DJIA - 5.18, -0.06% SP500 - 2.45, -0.25% NASDAQ Comp. + 5.38, +0.31% Russell 2000 + 0.98, +0.18% Exchange NYSE NASD Advancing 1,963 1,600 Declining 1,508 1,271 Oil $63.91 -$3.90 Gold $726.80 +$8.60 $SOX 237.10 -2.37 Strongest Sectors: XLP +1.53%...XLU +1.04%...XLV +0.75% Weakest Sectors: XLE -3.09%...XLY -2.87%...XLK -1.71% Sector Watch Up Trending: Sideways: Down Trending: XLP, XLF, XLY, XLV, XLI, XLE, XLU, XLB, XLK The DJIA had it's smallest daily trading range since September 3. Ironically Monday was also the lowest DJIA trading volume since Septermber 3. This was attributed to big money remaining on the sidelines until the outcome of the Presidential election on Tuesday. While the broad indices traded in a narrower range on Monday, many individual stocks had strong gains like CVD, ENER, PRU, SPWRA, FSLR, HUM, CLF, UBB, EQ, CTL, CEPH and BIIB.

Oil prices continued their down trend. Inversely airline stocks rose. Look at the charts of ALK, AMR, CAL, DAL, LCC and UAUA.

Index Commentary The DJIA formed a doji and closed above its 20 DMA for the third straight trading day. The SPX formed an inside day, a small black spinning top candle while closing above its 20 DMA for the third straight day. The Nasdaq formed a small white spinning top and closed above its 20 DMA for the second trading day in a row. The RUT formed a small white spinning top that could be seen as a shooting star and closed above its 20 DMA for the second day. Monday’s Action Moving Up: FSLR, LDK, CLF, ZION, DRYS, UAUA,CNX, X, AEM, JASO, LAMR, SOHU, LCC, Moving Down: DECK, MA, GS, NUE, MOS, ANR, V, NIHD, CF, AMZN, BIDU, STRA, NDAQ, MON, MEE, IPI, FWLT, BTU, INFY Intermediate Term Market Trend: Down Short Term Market Trend: Up