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