Higher Low Support Bounce - Bullish Continuation

DJIA + 64.59, +0.75% SP500 + 6.14, +0.70% NASDAQ Comp. + 32.84, +2.18% Russell 2000 + 17.22, +3.82% Exchange NYSE NASD Advancing 2,278 1,941 Declining 1,518 902 Oil $46.28 -$1.70 Gold $818.90 -$6.00 SOX 212.94 +9.57 VIX 54.28 -1.50 Strongest Sectors: XLF +1.93%...XLK +1.19%...XLU +0.63% Weakest Sectors: XLE -0.98%...XLY -0.33%...XLP +0.13% Sector Watch Up Trending: Sideways: XLE, XLP, XLU Down Trending: XLF, XLY, XLV, XLI, XLB, XLK This was an interesting week with plenty of bad news that threatened to send the market lower. We saw some interesting non-confirmations from the VIX on Monday suggesting a pullback on Tuesday and on Thursday suggesting a rally on Friday both non-confirmation signals were successful. The SOX and the momentum line were also helpful in staying focused on the chart and see through the smoke screen being created by the news. In the end the market formed a higher low and is showing many positive breakouts in the indices and the stocks in our watchlists. We posed the question on October 10…”Was this the beginning of the end?” We also stated that if it was the market would take at least 4 to 8 weeks before it would likely be ready to go up. After 9 weeks it continues to appear that Oct. 10 may have been the beginning of the end. And while the markets are at best in a neutral trading range, they are showing signs of higher lows with bullish potential.

This is the time to watch closely leading stocks that are breaking above their 30 DMA and making higher lows for bullish trading opportunities. Watch our Stocks to Watch list each day for stocks closing above their 30 DMA.

Index Commentary The DJIA formed a hammer and bullish harami while making a higher low on Friday as it closed above its 30 DMA. The SPX formed a hammer as it made a higher low closing just below its 30 DMA. The Nasdaq formed a piercing line pattern while making a higher low and closing just above its 30 DMA. The RUT formed a formed a piercing line pattern while making a higher low and closing just above its 30 DMA. Watch for confirmation of these bullish candle patterns in the indices on Monday. Stocks to Watch on Monday Leading Stocks: Holding Above 30 DMA AYE…EZPW…PCLN…BAP…DLTR…FLR…FSTR…JCOM…JEC…PCR…ATK…B…IRIS…RTN…SNA…WMS…HAS…JOSB…AMZN…BIIB…BYI…HDB…LFC…MCRS…PSSI…AMX…CERN…FWLT…GME…MTW…NEU…NIHD…QSII…VMI…WAB…OI…PPD…CHU…FLS…MBT…RIO Moving Above 30 DMA = 17 AAPL…ANSS…BCO…CCC…CTSH…DECK…DV…EPR…GILD…JW.A…LNN…MOS…NDAQ…NILE…ROST…SHW…VIVO Bullish Engulfing Pattern (click images to enlarge) Piercing Line Pattern Bull Flag Pattern ProphetCharts Moving Below 30 DMA = 3 ESRX…ICLR…MBT Staying Below 30 DMA DGIT…LAYN…NOV…OSIP…SINA…SOHU…SWN…MMM…FLIR…PETS…SPTN…STRA…BCR…CL…ACL…AIRM…AME…CBST…CHTT…GIS…MYGN…PRGO…PTNR…TECH…AXYS…PRXL…RCI…AFAM…AGN…CAM…ESI…HLF…MON…MTD…PCP…POT…TEVA…URBN Friday’s Action Moving Up: STRA, PCLN, AEM, PNRA, X, POT, CLF, IPI, BRCM, KRE, AFAM, HANS, SINA, NUE, V, KMT, SCHN, AGU, NDAQ Moving Down: MON, ZION, GS, ADM, BTU Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Down