Indices Rise in Pennant Pattern

DJIA + 70.09, +0.81% SP500 + 10.57, +1.19% NASDAQ Comp. + 18.14, +1.17% Russell 2000 + 10.69, +2.30% Exchange NYSE NASD Advancing 2,696 1,841 Declining 1,146 1,003 Oil $43.52 +$1.45 Gold $807.10 +$34.70 SOX 208.57 +2.92 VIX 55.73 -3.18 Strongest Sectors: XLE +5.17%...XLB +3.09%...XLY +2.33% Weakest Sectors: XLF -1.75%...XLK -0.83%...XLV -0.26% Sector Watch Up Trending: Sideways: XLE, XLP, XLU Down Trending: XLF, XLY, XLV, XLI, XLB, XLK (click images to enlarge) On Wednesday XLE was again the strongest sector and XLF the weakest. XLF is in a bull flag pattern. Stocks rallied after Tuesday's pullback. The VIX fell over 5% confirming the move up in the SPX. The SOX gained slightly more than the Nasdaq. These combined with the red momentum line in the lower reversal zone for the second straight day suggest the potential for a continued rise on Thursday. Also the pennant on the DJIA and SPX is a short-term continuation pattern with a greater probability to breakout to the upside. Index Commentary The DJIA formed a bearish harami that did not confirm Tuesday’s bearish harami…forming a pennant since Monday…held just above its 30 DMA. The SPX formed a bearish harami that did not confirm Tuesday’s bearish harami…forming pennant since Monday …closed just above its 30 DMA. ProphetCharts The Nasdaq formed a doji that did not confirm Tuesday’s tombstone doji…formed inside day…closed just above its 30 DMA. The RUT formed a bearish harami that did not confirm Tuesday’s bearish harami/shooting star-like pattern…formed an inside day…closed just above its 30 DMA. Stocks to Watch on Thursday Leading Stocks: Holding Above 30 DMA AYE…EZPW…PCLN…BAP…DLTR…ESI…FLR…FSTR…JCOM…JEC…PCR…ATK…IRIS…MIG…RTN…SNA…WMS…HAS…JOSB…SHW...URBN…AGN…AMZN…AFAM…ANSS…BIIB…BYI…DECK…ESRX…HDB…LFC…MCRS…NILE…PSSI…AAPL…AMX…CERN…CTSH…FWLT…GME…ICLR…JW.A…MON…MTW…NDAQ…NEU…NIHD…QSII…VMI…WAB…MOS…OI…PPD MTW from our intra-day post on Monday continues to move higher Moving Above 30 DMA = 15 CAM…CCC…CHU…EPR…FLS…GILD…HLF…MBT…MTD…PCP…POT…RIO…ROST…TEVA…VIVO

Moving Below 30 DMA AXYS…RCI Staying Below 30 DMA LAYN…NOV…OSIP…SINA…SOHU…SWN…MMM…FLIR…PETS…SPTN…STRA…BCR…CL…DV…ACL…AME…CBST…CHTT…GIS…MYGN…PRGO…TECH Wednesday’s Action Moving Up: POT, AEM, BTU, CLF, SCHN, AGU, CNX, NUE, FSLR, ANR, X, FWLT, MOS, MEE, GDX, STRA, MA, CF, IPI, NIHD, COH, ESRX, GRMN, ADM Moving Down: AFAM, GS, SINA, MON Intermediate Term Market Trend: Neutral – DJIA, SPX, Down – Nasdaq, RUT Short Term Market Trend: Up