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