SPX It's Worst January...Barometer or Not...You've Been Misled

DJIA - 148.15, -1.82% SP500 - 19.26, -2.28% NASDAQ Comp. - 31.42, -2.08% Russell 2000 - 9.71, -2.14% Exchange NYSE NASD Advancing 986 916 Declining 2,722 1,837 Oil Gold SOX 208.26 -4.07 VIX 44.84 +2.21 The VIX moved up confirming the drop in the SPX on Friday. Strongest Sectors: XLV -1.06%...XLE -1.39%...XLU -2.00% Weakest Sectors: XLB -3.92%...XLP -3.06%...XLK -2.97% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK Down Trending: XLF The SPX finished the month of January down -8.6%. The SPX closed Friday at 825.88 down from 903.25 on December 31. So what does that tell us? We are regularly asked about the “January Barometer” and what do we think about it? Sometimes the questioner is even equipped with a statistic from some source that makes it sound like all a trader needs to do is look at January and then wah-la the odds are in trader’s favor for the rest of the year. We respond with something like, “you can’t trade the market based on past statistics because if you don’t know the range, the mean, the deviation, the R2, the drawdown, the draw-up, the correlation coefficient” and a few other terms we throw in for clarity, “you don’t really know what the statistic you just cited actually means.” By the time we complete the answer, the questioner is often disappointed because they thought they had found the “holy grail” to trading successfully for the rest of the year and our response correctly destroyed any confidence they had in a worthless statistic. Yes, you are reading correctly “a worthless statistic." Actually, it’s not worthless to a financial writer, because someone who doesn’t really know what the he_ _ they are talking about, but wants to sound like they do, loves to bring up the January Barometer. Why? Because it makes them sound like they know what they are talking about. (In case you are wondering the blank fill in is he c k.) What too many people and traders are not aware of is the old adage, “there are lies, there are damn lies and then there are statistics.” You see a good statistician or quantitative analyst can take a numerical state and create whatever leading or misleading impression they want depending on what they choose to focus on and what they choose to delete. Having spent many years doing quantitative analysis we could run a least a couple dozen statistical variations on the “JB” and help you reach any conclusion we wanted. Not that it would help you trade better, but it certainly would impress you. Just to prove the point we will share with you one statistical variation that we have never seen in print or heard mentioned before about the “JB.” Did you know, and we suspect that you didn’t, that since 1960 when the SPX was down in January, 53% of the time the SPX is higher at the end of the year than it closed at the end of January! What that means is that it is more probable that the SPX will close higher than the January close, when January produces a negative return. Now how does that help you trade in 2009? The reality is, it doesn’t and neither does the January Barometer. The reality is regardless of what the market does in January you had better focus on Dave’s Insight: To trade profitably focus on trend, support and resistance and momentum. In fact what does the “JB” tell you about trend, support and resistance and momentum for the balance of 2009? Absolutely nothing! “Say it again, one, two what is it good for? Absolutely nothing,” as it relates to the trend, support and resistance and momentum for the balance of the year. So help your friends pull their head out of the “JB” and trade the trend! The broad indices fell for the second consecutive day on Friday. The downward momentum slowed from Thursday as the number of advancing stocks rose by 300 on the Nasdaq. SOX momentum also slowed on Friday. After strong earnings Thursday evening AMZN rose $8.82 or 17.64% closing above horizontal resistance for a breakout. Index Commentary The DJIA, SPX, Nasdaq and RUT which moved below the low of the high day on Thursday all moved lower towards horizontal support on Friday. Stock Commentary Rail stocks BNI, CSX and UNP moved lower while NSC formed a hammer, potential bullish harami. The chart patterns on steel, semiconductor and coal stocks which weakened on Thursday STLD rolled over NUE, SCHN and X confirmed Thursday’s bearish harami NVLS formed an inverted hammer MRVL formed a white spinning top XLNX formed a bearish engulfing pattern NSM, ALTR, LLTC moved lower TXN formed a black hammer KOL, BTU, JRCC MEE, CNX, FCL and WLT followed Thursday’s bearish candles by moving lower. Earnings Friday, Jan 30 AME +0.66 inline +0.66 estimates ACI +0.44 beat +0.39 est. CVX +2.44 beat +1.81 est. XOM +1.55 beat +1.45 est. HON +0.97 inline +0.97 est. IVZ +0.17 inline +0.17 est. KLIC -0.37 below -0.26 est. FSTR +0.55 beat +0.49 est. PCAR +0.31 beat +0.30 est. PG +1.58 inline +1.58 Numbers exclude non-recurring items Mon Feb 2 BMO – HUM AMC – AFL, HOLX, MSTR, SNDK Tues Feb 3 BMO – AFAM, ADM, AVP, BP, CAM, CME, DOW, DHI, MRO, MRK, MOT, MYGN, NOC, PRGO, UPS AMC – BYI, CTX, LIMN, MEE, MET, ERTS, USNA, DIS, YUM Wed Feb 4 BMO – AGN, BCO, CLX, ITT, KFT, NOV, PM, RL, SNA AMC – AKAM, CSCO, EXBD, XRAY, DLB, EOG, FMC, LVS, NVLS, PRU, PHM, RJECT, SPTN, SUN, V Thu Feb 5 Fri Feb 6 BMO – BIIB Stocks to Watch on Monday Leading Stocks: Holding Above 30 DMA BCO…ESI…JW.A…MYGN…BCR…MON…RIMM…SYNA…BLUD…AME…APH…DLTR…STRA…AYE…PCP…AET…GES…GME…IIVI…NE…RIO…SWN…URBN…POT…ATW…CAM…MOS…NOV…RIG…AAPL…BIIB…JCOM…WCG…VAR…CELG…GILD…RCI..CL…ICLR Moving Above 30 DMA = 4 AMZN…CHTT…FLS…RTN Moving Below 30 DMA = 10 CTSH, DNA, GIS, JOSB, K, MMM, MTD, NIHD, PCR, ROST Staying Below 30 DMA AGN, AMED, ATK, BYI, CIR, ESRX, HLF, HP, MCRS, NDAQ, NEU, NGS, PSSI, SPN, WMS, DV, LAYN, CCC, TEVA, CERN, FLIR, QSII, JEC, KEX, OSIP, PCLN, PETS, SHW, TECH, UTX, BAP, ACL, FWLT, HDB, LNN, OI, ADBE, AMX, CBST, DECK, FLR, MBT, SNA, VMI, AFAM, EPR, FSTR, HAS, LFC, MTW, SOHU, VIP, NDAQ, ANSS, CHU, EZPW, NILE, PSYS, VIVO, WAB, ENDP, IRIS, ISRG, SPTN, PPD, PRGO, SINA, AXYS Friday’s Action Moving Up: MA, FSLR, V Moving Down: SCHN, X, POT, FWLT, NUE, MON, DRYS, STRA, HANS, ESRX, BRCM, ZION, CNX, CF, MS, UAUA, CLF, GS, AGU, BTU, ANR, GRMN, INFY, PNRA, SOHU, KMT, LCC, LAMR, IPI, KRE, AEM Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Down

Market Wrap 4:30 ET

Dave Johnson will be joining Tom Sosnoff and Ben Watson in the Market Wrap today at 2:30 pm MT/4:30 pm ET. Please join us if you have access!

Stocks Retreat on Rising Unemployment, Weak Housing

DJIA - 226.44, -2.70% SP500 - 28.95, -3.31% NASDAQ Comp. - 50.50, -3.24% Russell 2000 - 19.78, -4.18% Exchange NYSE NASD Advancing 708 616 Declining 3,046 2,168 Oil $41.44 -$0.72 Gold $905.10 +$16.90 SOX 212.33 -10.26 VIX 42.63 +2.97 The VIX moved up confirming the drop in the SPX on Thursday. Strongest Sectors: XLU -0.74%...XLP -0.87%...XLV -1.41% Weakest Sectors: XLF -7.86%...XLY -4.03%...XLI -3.66% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK Down Trending: XLF All sectors moved lower on Thursday as the broad market indices gave back Wednesday’s gains as unemployment claims reached a record high and new home sales reached a record low. Many stocks pulled back from Wednesday’s high over continued concerns about economic weakness. After the close AMZN reported earnings of 52 cents above estimates of 39 cents. AMZN which closed at 50 rose over $6 on 5.9 million shares in after-hours trading. Stock Commentary Rail stocks BNI, CSX, NSC and UNP appear to be in a bear flag pattern. The chart patterns on steel, semiconductor and coal stocks weakened on Thursday: STLD may be rolling over at resistance NUE, SCHN and X formed a bearish harami NVLS, MRVL, XLNX, NSM, ALTR, LLTC, TXN bounced down at resistance KOL, BTU, JRCC MEE and WLT bounced down at resistance. CNX formed a bearish engulfing and FCL formed a bearish harami. Index Commentary The DJIA formed a large black candle that fell back through short-term resistance at 8,250 The SPX formed a large black candle that fell back through short-term support at 860. The Nasdaq formed a large black candle that fell back through new short-term support at 1,525…closed below its 20, 30 and 50 DMA. The RUT formed a large black candle that closed below the new support of 468…closed below its 50 DMA. Earnings Thursday, Jan 29 MMM +0.97 beat +0.93 AMZN +0.52 beat +0.39 ALK, BUD, AZN, BDK, CELG, CHTT, CL, CNX, CAL, EK, LLY, F, HP, JBLU, LLL, ERIC, OXY, RTN, TROW, UA, LCC, BRCM, BCR, CA, DRIV, JNPR, KLAC, MXIM, MCHP, VAR Friday, Jan 30 BMO – AME, ACI CVX, XOM, HON, IVZ, KLIC, FSTR, PCAR, PG Stocks to Watch on Friday Leading Stocks: Holding Above 30 DMA JOSB…BCO…ROST…ESI…JW.A…MYGN…BCR…MON…RIMM…SYNA…BLUD…AME…APH…DLTR…STRA…AYE…K…PCP…AET…GES…GME…IIVI…NE…RIO…SWN…URBN…POT…ATW…CAM…CTSH…MOS…NIHD…NOV…RIG…AAPL…BIIB…GIS…JCOM…WCG…DNA…VAR…CELG…GILD…MTD…PCRI…RCI Moving Above 30 DMA = 3 CL…ICLR…MMM Moving Below 30 DMA = 17 AGN, AMED, ATK, BYI, CHTT, CIR, ESRX, FLS, HLF, HP, MCRS, NDAQ, NEU, NGS, PSSI, SPN, WMS Staying Below 30 DMA DV, LAYN, RTN, CCC, TEVA, CERN, FLIR, QSII, JEC, KEX, OSIP, PCLN, PETS, SHW, TECH, UTX, BAP, ACL, AMZN, FWLT, HDB, LNN, OI, ADBE, AMX, CBST, DECK, FLR, MBT, SNA, VMI, AFAM, EPR, FSTR, HAS, LFC, MTW, SOHU, VIP, NDAQ, ANSS, CHU, EZPW, NILE, PSYS, VIVO, WAB, ENDP, IRIS, ISRG, SPTN, PPD, PRGO, SINA, AXYS Thursday’s Action Moving Up: AEM, GDX, STRA Moving Down: FSLR, MA, GS, DRYS, AFAM, PCLN, CLF, KMT, MS, SOHU, ZION, NUE, ESRX, PNRA, KRE, UAUA, SINA, LAMR, X, MOS, BTU, ANR, NDAQ, FWLT, KBE, POT, MEE, GRMN, AGU, NIHD, V, BRCM, CF, LCC, IPI, ONXX Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Neutral

Stocks Bounce With Momentum

DJIA + 200.72, +2.46% SP500 + 28.38, +3.36% NASDAQ Comp. + 53.44, +3.55% Russell 2000 + 17.44, +3.83% Exchange NYSE NASD Advancing 3,247 2,165 Declining 563 615 Oil $42.16 +$0.58 Gold $888.20 -$11.30 SOX 222.59 +5.31 VIX 39.66 -2.59 The VIX moved down confirming the rise in the SPX on Wednesday. Strongest Sectors: XLF +12.80%...XLY +4.25%...XLI +2.87% Weakest Sectors: XLU +0.64%...XLP +1.01%...XLV +1.55% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK Down Trending: XLF Stocks finally bounced off of support with some force on the news of the proposal for the government to buy bad assets from banks. All sectors gained on Wednesday with financial gaining three times more than the second strongest sector. The financial sector has been the one sector recently down trending and the proposal certainly brought fresh buying into the sector. Regional bank ZION gained 27.56% after rising +15.5% on Tuesday. BAC +13.69%c, C +18.59%, WFC +30.88% JPM +10.38%, USB +11.61% Watch the chart patterns on steel stocks: STLD, NUE, SCHN, X and semiconductor stocks: NVLS, MRVL, XLNX, NSM, ALTR, LLTC, TXN Coal stocks bounced on Wednesday: KOL, BTU, CNX, FCL, JRCC, MEE, WLT

Index Commentary The DJIA formed a large white candle that broke through short-term resistance at 8,250 The SPX formed a large white candle that broke through short-term resistance at 860. The Nasdaq formed a large white candle that broke through short-term resistance at 1,525…closed above its 20, 30 and 50 DMA. The RUT formed a large white candle that broke through short-term resistance at 468…closed above its 50 DMA at its 20 and 30 DMA. Earnings Wednesday, Jan 28 T +0.64 below +0.65 estimates BHI +1.41 beat +1.26 est. BDX +1.26 beat +1.15 est. BA +0.62 below +0.78 est. COP +1.28 beat +1.22 est. GD +1.62 beat +1.59 est. HES -0.23 below +0.33 est. PX +1.01 beat +0.96 est. WLP +0.65 below +1.36 est. WFC -0.79 below +0.33 est. ARG +0.76 beat +0.75 est. ALL +0.97 below +1.35 est. CTXS +0.48 beat +0.47 est. KEX +0.72 below +0.79 est. LRCX -0.09 below -0.05 est. OTEX +0.64 beat +0.57 est. OI +0.45 beat 0.39 est. QCOM +0.31 below +0.47 est. SEPR +0.92 beat +0.56 est. SBUX +0.15 below +0.17 est. SYMC +0.42 beat +0.32 est. WDC +0.55 beat +0.31 est. Numbers exclude non-recurring items. Thursday, Jan 29 BMO – MMM, ALK, BUD, AZN, BDK, CELG, CHTT, CL, CNX, CAL, EK, LLY, F, HP, JBLU, LLL, ERIC, OXY, RTN, TROW, UA, LCC AMC – AMZN, BRCM, BCR, CA, DRIV, JNPR, KLAC, MXIM, MCHP, VAR Friday, Jan 30 BMO – AME, ACI CVX, XOM, HON, IVZ, KLIC, FSTR, PCAR, PG Stocks to Watch on Thursday Leading Stocks: Holding Above 30 DMA JOSB…BCO…ROST…ESI…JW.A…MYGN…AMED…BCR…MON…RIMM…SYNA…BLUD…AME…APH…DLTR…STRA…AYE…K…PCP…AET…GES…GME…HP…IIVI…NE…RIO…SWN…URBN…POT…ATW…CAM…CTSH…MOS…NIHD…NOV…RIG…AAPL…BIIB…GIS…JCOM…WCG…ATK…CHTT…DNA…HLF…VAR Moving Above 30 DMA = 17 AGN…BYI…CELG…CIR…ESRX…FLS…GILD…MCRS…MTD…NDAQ…NEU…NGS…PCR…PSSI…RCI…SPN…WMS Moving Below 30 DMA = 1 DV Staying Below 30 DMA LAYN, RTN, CCC, ICLR, TEVA, CERN, FLIR, QSII, JEC, KEX, OSIP, PCLN, PETS, SHW, TECH, UTX, BAP, ACL, AMZN, CL, FWLT, HDB, LNN, OI, ADBE, AMX, CBST, DECK, FLR, MBT, SNA, VMI, AFAM, EPR, FSTR, HAS, LFC, MMM, MTW, SOHU, VIP, NDAQ, ANSS, CHU, EZPW, NILE, PSYS, VIVO, WAB, ENDP, IRIS, ISRG, SPTN, PPD, PRGO, SINA, AXYS Wednesday’s Action Moving Up: GS, MA, SCHN, FSLR, NUE, ZION, SOHU, MS, V, X, POT, KBE, CF, PCLN, ESRX, CLF, KRE, CNX, SINA, COH, AGU, NDAQ, FWLT, ANR, MOS, GRMN, BTU, MEE, INFY, ONXX, NIHD, KMT, DRYS Moving Down: STRA, AFAM, GDX Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Up

This Was Posted Last Night

"Such detail. All the earnings and stocks that will be announcing in the next few days. It is great to put the stocks staying above or below the 30 MA in a watch list and see how they behave each day. Don't know when you find the time to post all this GREAT INFO. Maybe in your "spare time"!! That serves as a good example for all of us, who in general are much less busy then you, Dave, proving that it all CAN be done.. Thanks again......." Scott Avery Dave's Insight: We all have 24 hours a day. And almost everyone of us fills those 24 hours with something. The only question is with what do we fill those 24 hours? It comes down to our priorities for all of us. If we make reviewing the charts, looking for our setups, wait for the buy signal and then buy when we are supposed to buy a priority then anyone of us can do this consistently and expect consistent results over a series of trades. Thanks Scott for your comment and insight. Look for more benefis to come here at Chart Signals over the next few weeks... Fed Announcement today at 2:15 ET - Keep this in mind as you plan your trading for today.

Stocks Rise, Gold and Oil Fall

DJIA + 58.70, +0.72% SP500 + 9.14, +1.09% NASDAQ Comp. + 15.44, +1.04% Russell 2000 + 5.52, +1.23% Exchange NYSE NASD Advancing 2,579 1,729 Declining 1,169 1,047 Oil $41.58 -$4.15 Gold $899.50 -$9.30 SOX 217.28 +7.39 VIX 42.25 -3.44 The VIX moved down confirming the rise in the SPX on Tuesday. Strongest Sectors: XLF +3.51%...XLV +2.08%...XLI +1.82% Weakest Sectors: XLY -0.30%...XLE +0.17%...XLk +0.60% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK Down Trending: XLF Today was a classic example of the “bad new was good news” that we have spoken about in the past. AXP which missed analysts estimates yesterday by one cent rose 9.74% today and was the strongest stock in the Dow. Apparently, traders were relieved the news was not worse than it was. Another great example that it is not the news, rather how the market decides to interpret the news that counts. Financial stocks were the strongest sector on Tuesday with regional bank ZION rising +15.5%, insurance companies AFL +12.84% and TRV +6.15%, banks BAC +8.33%, C +6.61%, WFC +4.59% and USB +5.3%. Steel stocks STLD +15.04%, NUE +6.25%, SCHN +7.24% and X +6.89% moved higher. Semiconductor stocks were also strong: NVLS, MRVL, XLNX, NSM, ALTR, LLTC, TXN Index Commentary The DJIA formed a spinning top that further confirmed Friday’s hammer…short-term resistance still 8,250 The SPX formed an inside day that further confirmed Friday’s hammer…short-term resistance still 860. The Nasdaq formed a white spinning top…short-term resistance 1,525. The RUT formed a white spinning top…short-term resistance 468. Earnings Tuesday, Jan 28: AKS -3.88 below +0.02 estimates BMY +0.46 beat + 0.41 est. CHKP +0.50 beat + 0.47 est. DAL -0.50 below + -0.34 est. DD -0.28 below -0.24 est. EMC +0.24 beat +0.23 est. ENR +1.93 beat +1.73 est. HSY +0.59 beat +0.54 est. KCI +0.98 beat +0.85 est. LXK +0.75 inline +0.75 est. NUE +0.34 beat +0.13 est. BTU +1.11 beat +0.74 est. STJ +0.60 beat +0.58 est. TRV +1.58 beat +1.46 est. X +2.00 beat +0.71 est. ALTR +0.28 beat +0.27 est. AMLN -0.36 beat -0.49 est. BBOX +0.88 beat +0.82 est. CHRW +0.52 inline +0.52 est. DV +0.59 inline +0.59 est. GILD +0.56 beat +0.55 MOLX +0.20 beat +0.14 est. NSC +1.21 beat +1.18 est. STM -0.06 below +0.03 est. SYK +0.74 inline +0.74 est. JAVA 0.15 beat -0.10 est. WBSN +0.31 beat +0.29 est. YHOO +0.17 beat +0.13 est. Numbers exclude non-recurring items. Wednesday, Jan 29 BMO – T, BHI, BDX, BA, COP, GLW, GD, HES, LM, PM, PJC, PX, USG, WLP, WFC AMC – ARG, ALL, CTXS, KEX, LRCX, MTW, OI, QCOM, SBUX, WDC Thursday, Jan 30 BMO – MMM, ALK, BUD, AZN, BDK, CELG, CHTT, CL, CNX, CAL, EK, LLY, F, HP, JBLU, LLL, ERIC, OXY, RTN, TROW, UA, LCC AMC – AMZN, BRCM, BCR, CA, DRIV, JNPR, KLAC, MXIM, MCHP, VAR Friday, Jan 31 BMO – AME, ACI CVX, XOM, HON, IVZ, KLIC, FSTR, PCAR, PG Stocks to Watch on Wednesday Leading Stocks: Holding Above 30 DMA JOSB…BCO…ROST…ESI…JW.A…MYGN…AMED…BCR…MON…RIMM…SYNA…BLUD…AME…APH…DLTR…DV…STRA…AYE…K…PCP…AET…GES…GME…HP…IIVI…NE…RIO…SWN…URBN…POT…ATW…CAM…CTSH…MOS…NIHD…NOV…RIG… AAPL…BIIB…GIS…JCOM…WCG Moving Above 30 DMA = 5 ATK…CHTT…DNA…HLF…VAR Moving Below 30 DMA = 2 LAYN, RTN Staying Below 30 DMA CCC, AGN, GILD, ICLR, TEVA, CERN, FLIR, MTD, QSII, CIR, JEC, KEX, OSIP, PCLN, PCR, PETS, SHW, SPN, TECH, UTX, BAP, NGS, ACL, AMZN, BYI, CL, FLS, FWLT, HDB, LNN, OI, ADBE, AMX, CBST, DECK, FLR, MBT, SNA, VMI, WMS, AFAM, EPR, FSTR, HAS, LFC, MMM, MTW, NEU, RCI, SOHU, VIP, MCRS, NDAQ, ANSS, CHU, EXPW, NILE, PSSI, PSYS, VIVO, WAB, CELG, ENDP, IRIS, ISRG, SPTN, ESRX, PPD, PRGO, SINA, AXYS Tuesday’s Action Moving Up: GS, MA, BTU, SCHN, X, NUE, FSLR, ZION, CNX, V, AFAM, ANR, ESRX, HANS, CLF, MS Moving Down: AEM, ONXX, SOHU, UAUA, LCC, CF, PNRA Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Neutral

Semiconductors and Steel Stocks Strong on Tuesday

Semiconductor and steel stocks are moving big on Tuesday morning. ALTR NVLS MRVL XLNX NSM TXN Steel stocks STLD X NUE SCHN Sideways Trading Range Support Bounce: JOYG

Indices Move Higher

DJIA + 38.47, +0.48% SP500 + 4.62, +0.56% NASDAQ Comp. + 12.17, +0.82% Russell 2000 + 5.70, +1.28% Exchange NYSE NASD Advancing 2,483 1,725 Declining 1,312 1,056 Oil $45.73 -$0.74 Gold $908.80 +$13.00 SOX 209.89 +1.61 VIX 45.69 -1.58 The VIX moved down confirming the rise in the SPX on Mondday. Strongest Sectors: XLU +2.40%...XLE +1.85%...XLK +1.21% Weakest Sectors: XLF -1.78%...XLB -1.18%...XLV -0.54% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK Down Trending: XLF Indices formed a higher high and higher low on Monday before closing below the day’s high. Prices held above support and moved slightly higher on the day. Utility, Energy and Technology sectors moved higher. AAPL gave 3 Green Arrows. Index Commentary The DJIA formed a spinning top that confirmed Friday’s hammer by just 8 Dow points…intra-day break above the high of the low day. The SPX formed an inverted hammer that confirmed Friday’s hammer by 5 SPX points. The Nasdaq formed an inverted hammer that confirmed Friday’s bullish harami by 12 Nasdaq points. The RUT formed an inverted hammer that confirmed Friday’s white spinning top by 6 RUT points. Earnings Monday, Jan 26: ACV +0.41 beat +0.34 estimates BOH +0.82 below +0.87 est. CAT +1.08 below +1.21 est. FCX +0.06 beat -1.12 est. HAL +0.87 beat +0.73 est. KMB +1.01 below +1.03 est. MCD +0.87 beat +0.83 est. DGX +0.87 beat +0.80 est. AXP +0.21 below +0.22 est. AMGN +1.06 below +1.07 est. CNW +0.10 beat -0.03 est. JEC +0.90 beat +0.89 est. NFLX +0.38 beat +0.34 est. QLGC +0.34 beat +0.29 est. STLD -0.45 below -0.33 est. TXN +0.21 beat +0.12 est. VMW +0.36 beat +0.26 est. ZION -0.32 below -0.30 est. Tuesday, Jan 28: BMO - AKS, BMY, CHKP, DAL, DD, EMC, ENR, HSY, KCI, LXK, NUE, BTU, STJ, TRV, X AMC – ALTR, AMLN, BBOX, CHRW, DV, ETFC, GILD, JBHT, MOLX, NSC, STM, SYK, JAVA, WBSN, YHOO Wednesday, Jan 29 BMO – T, BHI, BDX, BA, COP, GLW, GD, HES, LM, PM, PJC, PX, USG, WLP, WFC AMC – ARG, ALL, CTXS, KEX, LRCX, MTW, OI, QCOM, SBUX, WDC Thursday, Jan 30 BMO – MMM, ALK, BUD, AZN, BDK, CELG, CHTT, CL, CNX, CAL, EK, LLY, F, HP, JBLU, LLL, ERIC, OXY, RTN, TROW, UA, LCC AMC – AMZN, BRCM, BCR, CA, DRIV, JNPR, KLAC, MXIM, MCHP, VAR Friday, Jan 31 BMO – AME, ACI CVX, XOM, HON, IVZ, KLIC, FSTR, PCAR, PG Stocks to Watch on Tuesday Leading Stocks: Holding Above 30 DMA JOSB…BCO…ROST…ESI…JW.A…MYGN…AMED…BCR…MON…RIMM…SYNA…BLUD…AME…APH…DLTR…DV…STRA…AYE…K…PCP…AET…GES…GME…HP…IIVI…NE…RIO…SWN…URBN…POT…ATW…CAM…CTSH…LAYN…MOS…NIHD…NOV…RIG Moving Above 30 DMA = 6 AAPL…BIIB…GIS…JCOM…RTN…WCG Moving Below 30 DMA = 3 CCC…CHTT…DNA Staying Below 30 DMA AGN, ATK, GILD, ICLR, TEVA, CERN, FLIR, HLF, MTD, QSII, CIR, JEC, KEX, OSIP, PCLN, PCR, PETS, SHW, SPN, TECH, UTX, VAR, BAP, NGS, ACL, AMZN, BYI, CL, FLS, FWLT, HDB, LNN, OI, ADBE, AMX, CBST, DECK, FLR, MBT, SNA, VMI, WMS, AFAM, EPR, FSTR, HAS, LFC, MMM, MTW, NEU, RCI, SOHU, VIP, MCRS, NDAQ, ANSS, CHU, EXPW, NILE, PSSI, PSYS, VIVO, WAB, CELG, ENDP, IRIS, ISRG, SPTN, ESRX, PPD, PRGO, SINA, AXYS Monday’s Action Moving Up: PNRA, FSLR, POT, MOS, MEE, HANS, DRYS Moving Down: STRA, MA, NUE, V, AFAM, PCLN, AEM, X, SCHN, ZION, ONXX, GS Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Neutral

Support Holds Again

DJIA - 45.24, -0.56% SP500 + 4.45, +0.54% NASDAQ Comp. + 11.80, +0.81% Russell 2000 + 1.51, +0.34% Exchange NYSE NASD Advancing 2,046 1,308 Declining 1,737 1,453 Oil $46.47 +$2.80 Gold $895.80 +$37.00 SOX 208.28 +8.29 VIX 47.27 -0.02 The VIX moved down slightly confirming the modest rise in the SPX on Friday. Strongest Sectors: XLF +3.33%...XLE +2.91%...XLB +1.52% Weakest Sectors: XLI -3.01%...XLP -0.97%...XLY -0.30% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK Down Trending: XLF The combination of weaker earnings in the financial sector and stronger earnings in other companies seems to offset each other and keep the indices holding above support. The weakness in bank stocks seemed to prevent a significant support bounce in the broad indices. The SOX, +4.15%, was stronger than the broad indices as it formed a bullish engulfing pattern on Friday. Oil appears to be forming a potential double bottom and potential trend change. See our comment below on USO. Gold had a horizontal breakout Friday suggesting trend continuation. Index Commentary The DJIA formed a hammer in the 7,900 to 8,100 support area. The SPX formed a hammer in the 800 to 830 support area. The Nasdaq formed a bullish harami in the 1,450 support area. The RUT formed a white spinning top in the 430 to 450 support area. Earning releases had a large impact with stock prices this past week beginning with STT on Tuesday and other financial stocks missing estimates and leading the financial sector lower. On the positive side IBM, AAPL and GOOG experienced strong support bounces. Earnings announcements continue this coming week. We have listed below many of the announcements that we’ll be watching. Earnings Friday, Jan 23 GE +0.37 inline +0.37 estimates HOG +0.34 below +0.57 est. SLB +1.03 below +1.05 est. XRX +0.30 below +0.34 est. Monday, Jan 26: BMO - BOH, CAT, FCX, HAL, KMB, MCD, DGX, AMC - AXP, AMGN, CNW, JEC, NFLX, QLGC, STLD, TXN, VMW, ZION Tuesday, Jan 28: BMO - AKS, BMY, CHKP, DAL, DD, EMC, ENR, HSY, KCI, LXK, NUE, BTU, STJ, TRV, X AMC – ALTR, AMLN, BBOX, CHRW, DV, ETFC, GILD, JBHT, MOLX, NSC, STM, SYK, JAVA, WBSN, YHOO Wednesday, Jan 29 BMO – T, BHI, BDX, BA, COP, GLW, GD, HES, LM, PM, PJC, PX, USG, WLP, WFC AMC – ARG, ALL, CTXS, KEX, LRCX, MTW, OI, QCOM, SBUX, WDC Thursday, Jan 30 BMO – MMM, ALK, BUD, AZN, BDK, CELG, CHTT, CL, CNX, CAL, EK, LLY, F, HP, JBLU, LLL, ERIC, OXY, RTN, TROW, UA, LCC AMC – AMZN, BRCM, BCR, CA, DRIV, JNPR, KLAC, MXIM, MCHP, VAR Friday, Jan 31 BMO – AME, ACI CVX, XOM, HON, IVZ, KLIC, FSTR, PCAR, PG Stock Commentary AET – potential horizontal breakout bull flag support bounce GME – support bounce in narrow trading range, potential breakout HP – bullish engulfing JEC – piercing line MOS – bullish engulfing MYGN – Up trend consolidation near horizontal resistance, potential horizontal bull flag, <> PCLN – bullish engulfing on 50 DMA support USO – bullish engulfing support bounce at potential double bottom with bullish divergence in the 14/5 stochastic Stocks to Watch on Monday Leading Stocks: Holding Above 30 DMA JOSB…BCO…ROST…ESI…JW.A…MYGN…AMED…BCR…MON…RIMM…SYNA…BLUD…AME…APH…DLTR…DV…STRA…AYE…K…PCP…AET…CCC…GES…GME…HP…IIVI…NE…RIO…SWN…URBN…POT Moving Above 30 DMA = 10 ATW…CAM…CHTT…CTSH…DNA…LAYN…MOS…NIHD…NOV…RIG Moving Below 30 DMA = 8 AGN, ATK, BIIB, GILD, GIS, ICLR, RTN, TEVA Staying Below 30 DMA CERN, FLIR, HLF, MTD, QSII, CIR, JEC, KEX, OSIP, PCLN, PCR, PETS, SHW, SPN, TECH, UTX, VAR, BAP, NGS, WCG, ACL, AMZN, BYI, CL, FLS, FWLT, HDB, LNN, OI, ADBE, AMX, CBST, DECK, FLR, MBT, SNA, VMI, WMS, AAPL, AFAM, EPR, FSTR, HAS, LFC, MMM, MTW, NEU, RCI, SOHU, VIP, JCOM, MCRS, NDAQ, ANSS, CHU, EZPW, NILE, PSSI, PSYS, VIVO, WAB, CELG, ENDP, IRIS, ISRG, SPTN, ESRX, PPD, PRGO, SINA, AXYS Friday’s Action Moving Up: AEM, GS, GDX, CF, FWLT, AGU, MOS, NDAQ, POT, PCLN, MS, CLF, BRCM, IPI, PNRA, SCHN, X Moving Down: MA, AFAM, STRA Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Neutral

Update on Thursday's Earnings Releases

2:50 ET Just a review of Thursday's earnings releases that beat estimates BAX, IGT, ESI, NITE, POT, CBST, EZPW, GOOG and SYNA are up. GOOG is up over $22, any surprise? Only LMT, UNP and LUV are lower. ISRG that was inline is lower.

Nasdaq, SPX, RUT Turn Positive

The Nasdaq Composite, SPX and RUT all turned positive for the day in afternoon trading. The Dow is still in negative territory. Obviously more stocks are turning positive in our Action watch list. Friday's Afternoon Action Moving Up: AEM, GDX, PCLN, STRA, FSLR, CF, CLF, GS, POT, FWLT, MOS, SCHN, AGU, X, NDAQ, BRCM, SINA, MS, MON, IPI, INFY, KMT, ESRX, NIHD, SOHU, BTU, MEE, GRMN, ANR Moving Down: AFAM, MA

Support Holds As Markets Open Lower, Gold Higher

The SPX opened about 20 points lower around 807 bounced and rose to the 827 area during the first two hours of trading. Since that time it has become range bound between 818 and 827. The SPX is just below even for the day at 12:50 ET. Gold is higher trading up over $34 around the 893 level. Many gold and commodity related stocks are moving higher in Friday tradubg. Airline stocks also are stronger. Friday's Early Action: Moving Up: AEM, GDX, PCLN, CF, CLF, POT, FWLT, GS, MOS, AGU, X, SCHN Moving Down: MA, MON, FSLR, V, STRA, AFAM

Stocks Pull Back and Bounce Again

DJIA - 105.30, -1.28% SP500 - 12.74, -1.52% NASDAQ Comp. - 41.58, -2.76% Russell 2000 - 13.91, -3.05% Exchange NYSE NASD Advancing 930 696 Declining 2,835 2,070 Oil $43.67 +$0.12 Gold $858.80 +$8.70 SOX 199.99 -5.19 VIX 47.29 +0.87 The VIX moved up confirming the move down in the SPX on Thursday. Strongest Sectors: XLV +0.42%...XLU -0.03%...XLP -0.09% Weakest Sectors: XLF -6.15%...XLE -2.74%...XLK -2.26% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK, XLF Down Trending: Indices fell near Wednesday’s lows and bounced creating an inside day o the DJIA, SPX, Nasdaq and RUT. Weakness in financial stocks again contributed to the drop in stocks. BAC, C and MSFT contributed to the drop in the DJIA. Weakness in ADBE, EBAY, JOYG and MSFT contributed to the weakness in the NDX. AAPL rose 6.68% on Thursday after earnings reported after the close on Wednesday beat estimates. Airline stocks LUV, UAUA, DAL, LCC and ALK also moved higher. IBM retraced a portion of yesterday's gain to the S1 level of Wednesday's large white candle.

POT formed a bullish engulfing pattern after earnings beat estimates.

The 7,900 support area on the DJIA continues to hold. Earnings Thursday, Jan 22 BAX +0.91 beat +0.89 estimate CIT -0.54 below -0.48 est. CY -0.08 inline -0.08 est. IBKR +0.49 below +0.53 IGT +0.29 beat +0.27 est. ESI +1.61 beat +1.44 est. KEY – 1.13 below -0.02 est. NITE +0.56 beat +0.38 est. LMT +2.05 beat +1.92 est. MSFT +0.47 below +0.49 est. POT +2.56 beat +2.28 est. SHW +0.50 below +0.53 est. LUV +0.08 beat +0.05 est. STI -1.08 below +0.07 est. UNP +1.31 beat +1.23 est. UNH +0.78 inline +0.78 est. AMD -0.68 below -0.54 est. COF -1.59 below +0.33 est. CBST +0.71 beat + 0.52 est. EZPW +0.35 beat +0.34 est. GOOG +5.10 beat +4.95 est. ISRG +1.27 inline +1.27 est. SYNA +0.84 beat +0.62 est. Friday: GE, HOG, MBFI, SLB, XRX Stocks to Watch on Friday Leading Stocks: Holding Above 30 DMA JOSB…BIIB…BCO…ROST…ESI…JW.A…MYGN…AGN…AMED…BCR…MON…RIMM…ICLR…SYNA…BLUD…RTN…AME…APH…DLTR…DV…STRA…AYE…GIS…K…PCP…AET…ATK…CCC…GES…GILD…GME…HP…IIVI…NE…RIO…SWN…TEVA…URBN Moving Above 30 DMA = 1 POT Moving Below 30 DMA = 9 CAM…CERN…CTSH…DNA…FLIR…HLF…LAYN…MTD…QSII Staying Below 30 DMA AXYS…SINA…PRGO…PPD…ESRX…SPTN…ISRG…IRIS…CHTT…ENDP…CELG…WAB…VIVO…PSYS…PSSI…NILE…EZPW…CHU…ANSS…NDAQ…MCRS…JCOM…VIP…SOHU…RCI…NEU…MTW…MMM…LFC…HAS…FSTR…EPR…AFAM…AAPL…WMS…VMILLLSNA…MBT…FLR…DECK…CBST…AMX…ADBE…RIG…OI…NOV…LNN…HDB…FWLT…FLS…CL…BYI…ATW…AMZN…ACL…WCG…NGS…BAP…VAR…UTX…TECH…SPN…SHW…PETS…PCR…PCLN…OSIP…NIHD…MOS…MOS…KEX…JEC…CIR Thursday’s Action Moving Up: STRA, POT, GS, PNRA, IPI, ESRX, MS Moving Down: DRYS, FSLR, MA, EBAY, KRE, NUE, INFY, ZION, CF, X, FWLT, MEE, BTU, CNX, KMT, SOHU, KBE, ANR, RF Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Neutral

IBM, Financial Stocks Lead Market Higher From Support

DJIA + 279.01, +3.51% SP500 + 35.02, +4.35% NASDAQ Comp. + 66.21, +4.60% Russell 2000 + 23.11, +5.33% Exchange NYSE NASD Advancing 2,936 2,104 Declining 877 716 Oil $43.55 +$2.71 Mar 09 contract Gold $850.10 -$5.10 SOX 205.18 +6.11 VIX 46.42 -10.23 The VIX moved down confirming the move up in the SPX on Tuesday. Strongest Sectors: XLF +14.73%...XLE +6.72%...XLK +4.82% Weakest Sectors: XLP +0.49%...XLU +1.13%...XLV +2.12% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK, XLF Down Trending: Indices rebounded from Tuesday’s sell off. IBM shares which rose in after-market trading on Tuesday after earnings beat estimates, continued to rise on Wednesday gaining $9.44 or 11.52%. Financial stocks including JPM, BAC, WFC and GS rose sharply on Tuesday. Earnings Wednesday Jan 21 ABT +1.06 inline +1.06 estimate ATI +1.15 beat 0.90 est. AMR -0.77 inline -0.77 est. COH +0.67 inline +0.67 est. IIVI +0.28 inline +0.28 est. UAUA -4.22 inline -4.22 est. UTX +1.23 beat +1.22 est. USB +0.15 below +0.22 est AAPL +1.78 beat +1.39 est. BNI +1.79 beat +1.74 est EBAY +0.41 beat +0.39 est. FFIV +0.40 inline +0.40 est. SLM +0.08 below +0.19 est. Thur: BK, BAX, CIT, CY, F, IGT, ESI, KEY, NITE, KLIC, LMT, POT, SHW, LUV, STI, UNP, UNH, LCC AMC – AMD, COF, CBST, EZPW, GOOG, IBKR, ISRG, MSFT, SYNA, Fri: GE, HOG, MBFI, SLB, XRX Index Commentary The DJIA and SPX formed a piercing line pattern with a new support bounce…closed below their 20, 30 and 50 DMA. The Nasdaq and RUT formed a bullish harami…closed below their 20, 30 and 50 DMA. Stocks to Watch on Thursday Leading Stocks: Holding Above 30 DMA JOSB…BIIB…BCO…ROST…ESI…JW.A…MYGN…DNA…AGN…AMED…BCR…CTSH…MON…RIMM…ICLR…SYNA…BLUD…CERN…RTN…AME…APH…DLTR…DV…STRA…AYE…GIS…K…PCP Moving Above 30 DMA = 19 AET…ATK…CAM…CCC…FLIR…GES…GILD…GME…HLF…HP…IIVI…LAYN…MTD…NE…QSII…RIO…SWN…TEVA…URBN Moving Below 30 DMA = 0 Staying Below 30 DMA AXYS…SINA…PRGO…PPD…ESRX…SPTN…ISRG…IRIS…CHTT…ENDP…CELG…WAB…VIVO…PSYS…PSSI…NILE…EZPW…CHU…ANSS…NDAQ…MCRS…JCOM…VIP…SOHU…RCI…NEU…MTW…MMM…LFC…HAS…FSTR…EPR…AFAM…AAPL…WMS…VMILLLSNA…MBT…FLR…DECK…CBST…AMX…ADBE…RIG…OI…NOV…LNN…HDB…FWLT…FLS…CL…BYI…ATW…AMZN…ACL…WCG…NGS…BAP…VAR…UTX…TECH…SPN…SHW…POT…PETS…PCR…PCLN…OSIP…NIHD…MOS…MOS…KEX…JEC…CIR Wednesday’s Action Moving Up: MA, GS, STRA, MS, FSLR, MON, CLF, CNX, SCHN, NDAQ, ANR, BTU, MEE, AEM, ADM, PCLN, DRYS, V, ZION, SOHU, ESRX, KRE, KMT, PNRA, SINA, IPI, NIHD, KBE, X, POT, MOS, AGU, GRMN, FWLT, BRCM, LAMR, ONXX, NUE, EBAY, GDX Moving Down: COH, UAUA Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Neutral

Financial Stocks Pull Market Lower

DJIA - 332.13, -4.01% SP500 - 44.90, -5.28% NASDAQ Comp. - 88.47, -5.78% Russell 2000 - 32.80, -7.03% Exchange NYSE NASD Advancing 442 407 Declining 3,369 2,400 Oil $40.84 -$1.73 Mar 09 contract Gold $854.60 +$15.30 SOX 199.07 -15.35 VIX 56.65 +10.54 The VIX moved up confirming the move down in the SPX on Tuesday. Strongest Sectors: XLP -1.18%...XLU -1.73%...XLV -2.42% Weakest Sectors: XLF -16.53%...XLY -5.87%...XLB -5.63% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK Down Trending: XLF Indices fell from the open starting with disappointing news from STT. See our early Tuesday post. The Financial Sector ETF, XLF, fell -16.53%. Indices fell below Thursday's low creating a failed support bounce. IBM shares rose in after-market trading after earnings beat estimates. Dave was traveling Tuesday to teach an AT Workshop. Earnings Tuesday, Jan 20: FAST +0.43 beat +0.41 estimates JNJ +0.94 beat +0.92 est. LOGI -0.22 below +0.43 est. PETS +0.21 beat +0.20 est., PCP +1.74 beat 1.70 est., AMTD +0.31 in line +0.31, BK +0.92 beat +0.69 est., CREE +0.12 beat +0.09 est., IBM +3.28 beat +3.03 est. Wed: BMO – ABT, ATI, AMR, COH, DAL, FCX, IIVI, PJC, UAUA, UTX, USB AMC – AAPL, EBAY, FFIV, NE, SLM, TER Thur: BK, BAX, CIT, CY, F, IGT, ESI, KEY, NITE, KLIC, LMT, POT, SHW, LUV, STI, UNP, UNH, LCC AMC – AMD, COF, CBST, EZPW, GOOG, IBKR, ISRG, MSFT, SYNA, Fri: GE, HOG, MBFI, SLB, XRX Index Commentary The DJIA formed a large black candle and broke Thursday’s support…support bounce failed…closed below its 20, 30 and 50 DMA. The SPX formed a large black candle and broke Thursday’s suppor… support bounce failed…closed below its 20, 30 and 50 DMA. The Nasdaq formed a large black candle and broke Thursday’s support…support bounce failure…closed below its 20, 30 and 50 DMA. The RUT formed a large black candle and broke Thursday’s support…closed below its 20, 30 and 50 DMA. Stocks to Watch on Wednesday Leading Stocks: Holding Above 30 DMA JOSB…BIIB…BCO…ROST…ESI…JW.A…MYGN…DNA…AGN…AMED…BCR…CTSH…MON…RIMM…ICLR…SYNA…BLUD…CERN…RTN…AME…APH…DLTR…DV…STRA…AYE…GIS…K Moving Above 30 DMA = 1 PCP Moving Below 30 DMA = 30 AET…ATK…CAM…CCC…CIR…FLIR…GES…GME…HLF…HP…JEC…KEX…LAYN…MOS…MTD…NIHD…OSIP…PCLN…PCR…PETS…POT…QSII…RIO…SHW…SPN…TECH…TEVA…URBN…UTX…VAR Staying Below 30 DMA GIS…PTNR…AXYS…SINA…PRGO…PPD…ESRX…CHTT…IRIS…ISRG…SPTN…ENDP…ANSS…CHU…EZPW…NILE…PSSI…PSYS…VIVO…WAB…JCOM…MCRS…NDAQ…AAPL…AFAM…EPR…FSTR…HAS…LFC…MMM…MTW…NE…NEU…RCI…SOHU…VIP…AMX…CBST…DECK…FLR…MBT…SNA…VMI…WMS…ADBE…ACL…AMZN…ATW…BYI…CL…FLS…FWLT…GILD…HDB…LNN…NOV…OI…RIG…SWN…BAP…NGS…WCG…IIVI Tuesday’s Action Moving Up: None Moving Down: GS, MA, FSLR, PCLN, V, POT, MON, ZION, MOS, KBE, AGU, SCHN, X, NDAQ, FWLT, ANR, PNRA, CF, ESRX, MS, KRE, SOHU, NUE, STRA, AEM, DRYS, CNX, INFY, SINA, RF, KMT, LAMR, BRCM, NIHD, CLF, COH, BTU, MEE, GRMN, IPI, ONXX, LCC, HANS, EBAY Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Down

STT Sends Bank Stocks and Markets Lower in Early Trading

STT reported fourth quarter operating income of +1.18 per share ahead of estimates of +1.14, however net income including non-recurring charges were +0.15 down from +0.57 in the year ago period. STT also stated they expected 2009 revenues to approximate 2008 below their long term growth of 8% to 12%. This warning of no growth sent STT lower in pre-market trading and shares gapped down $16 on the open as 4 million shares traded in the first 4 minutes. After falling to $16.31 in those first 4 minutes, shares have stablized and started to rise from that low during the first 60 minutes of trading. The STT has sent bank stocks lower once again and indices have slipped below Friday's low and held above Thursday's low during the first half hour of trading. During the second half of trading stocks have begun to rally and are now above Friday's lows. This certainly is making for an interesting trading day on this historical Inauguration Day. 10:40 ET - DJIA -134 , SPX -18, Nasdaq -38

Thursday's Reversal Confirmed as Stocks Move Higher

DJIA + 68.73, +0.84% SP500 + 6.38, +0.76% NASDAQ Comp. + 17.49, +1.16% Russell 2000 + 3.83, +0.83% Exchange NYSE NASD Advancing 2,499 1,521 Declining 1,276 1,229 Oil $36.51 +$1.11 Gold $839.30 +$32.60 SOX 214.42 +7.35 VIX 46.11 -4.89 The VIX moved down confirming the move up in the SPX on Friday. Take notice of the fact that the SPX on Thursday reached all but it lowest low for November, however the VIX was 10 to 25 points below its November highs. Strongest Sectors: XLU +1.98%...XLY+1.18%...XLB +1.12% Weakest Sectors: XLF -3.01%...XLI +0.55%...XLK +0.67% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK, XLF Down Trending: Did you catch Friday's Weekly Wrap with Tom Sosnoff and Dave Johnson? More than 1,000 other traders did! Markets rallied on Friday confirming Thursday's key reversal day. Friday was the break of the high of the low day on the DJIA, SPX, Nasdaq, RUT and several individual stocks. This is an entry signal for some short-term traders. Oil rallied on Friday after making a new multi-year low on Thursday. Oil is forming a potential double bottom. Gold formed a large bullish engulfing pattern on Friday breaking out of a bull flag pattern. Several gold stocks bounced in a bull flag pattern including: GDX, AEM, GG, GOLD, ABX, NEM Earnings Friday, Jan 16 - BAC -0.48 missed estimates +0.08, SCHW in line at +0.26, C -1.72 missed -1.31, JCI -0.14 missed +0.01. Tues: BMO - FAST, JNJ, LOGI, PETS, PCP, STT, AMTD AMC – CREE, IBM Wed: BMO – ABT, ATI, AMR, COH, DAL, FCX, IIVI, PJC, UAUA, UTX, USB AMC – AAPL, EBAY, FFIV, NE, SLM, TER Thur: BMO - BK, BAX, CIT, CY, F, IGT, ESI, KEY, NITE, KLIC, LMT, POT, SHW, LUV, STI, UNP, UNH, LCC AMC – AMD, COF, CBST, EZPW, GOOG, IBKR, ISRG, MSFT, SYNA, Fri: BMO - GE, HOG, MBFI, SLB, XRX Index Commentary The DJIA formed a white candle that confirmed Thursday’s hammer…continuation of support bounce…closed below its 20, 30 and 50 DMA. The SPX formed a white spinning top that confirmed Thursday’s hammer…made higher low and higher high on continuation of support bounce…closed below its 20, 30 and 50 DMA. The Nasdaq formed dragonfly doji-like pattern that confirmed Thursday’s bullish harami pattern…made a daily higher low and higher high in its support bounce continuation…closed just below its 20, 30 and 50 DMA. The RUT formed a white hammer pattern that confirmed Thursday’s bullish harami hammer pattern…daily higher low and higher high…closed just below its 50 DMA and below its 20 and 30 DMA. Stocks to Watch on Monday If you read our comment on Tuesday Jan. 13 under Stocks to Watch you are likely to be paying closer attention to the number of stocks Moving Above versus Moving Below. On Monday Above was 1 and Below was 17, Wednesday was Above 2 and Below 30. Did you notice Thursday and Friday Above 14 and 13, Below 4 and 1. Hopefully you understand our Tuesday comment and why we have been showing the number each day. Leading Stocks: Holding Above 30 DMA PCLN…JOSB…BIIB…QSII…BCO…ROST…AET…ESI…GES…JW.A…MYGN…DNA…HLF…OSIP…AGN…LAYN…AMED…BCR…CAM…FLIR…CTSH…HP…GME…MON…RIMM…ICLR…SYNA…BLUD…CERN…RTN…TEVA…AME…APH…DLTR…DV…KEX…MOS…MTD…NIHD…RIO…SPN…STRA…TECH…URBN Moving Above 30 DMA = 13 ATK…AYE…CCC…CIR…GIS…JEC…K…PCR…PETS…POT…SHW…UTX…VAR Moving Below 30 DMA = 1 IIVI Staying Below 30 DMA PTNR…AXYS…SINA…PRGO…PPD…ESRX…CHTT…IRIS…ISRG…SPTN…ENDP…ANSS…CHU…EZPW…NILE…PSSI…PSYS…VIVO…WAB…JCOM…MCRS…NDAQ…AAPL…AFAM…EPR…FSTR…HAS…LFC…MMM…MTW…NE…NEU…RCI…SOHU…VIP…AMX…CBST…DECK…FLR…MBT…SNA…VMI…WMS…ADBE…PCP…ACL…AMZN…ATW…BYI…CL…FLS…FWLT…GILD…HDB…LNN…NOV…OI…RIG…SWN…BAP…NGS…WCG Friday’s Action Moving Up: STRA, AEM, SOHU, FSLR, PNRA, POT, GDX, HANS, AGU, ESRX, NUE, CF, MON, LCC, UAUA, MOS, NDAQ, Moving Down: MA, V, ZION, GS, KBE Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Neutral

Support Bounce Follows Through on Friday

Friday's Action Leading Stocks: GDX, AEM, HANS, STRA, LCC, SOHU, UAUA, PNRA, NUE, ESRX, FSLR, SINA, BRCM, AGU, NDAQ, POT, MOS, MEE Stock's to Watch Leading Stocks: CCC, SOHU, DV, AET, K, NDAQ, CIR, MYGN, LAYN, ATK, SWN, BIIB, POT, DECK, PCR, JOSB, RIMM, FLS, GME, MOS, ESRX Market's are closed Monday, January 19 in observance of Martin Luther King, Jr. Day. We'll be back later with Friday's Comments and what to watch for on Tuesday.

Key Reversal Day?

DJIA + 12.35, +0.15% SP500 + 1.12, +0.13% NASDAQ Comp. + 22.20, +1.49% Russell 2000 + 9.45, +2.09% Exchange NYSE NASD Advancing 2,006 1,602 Declining 1,787 1,183 Oil $35.40 -$1.88 Gold $806.70 -$1.50 SOX 207.07 +5.06 VIX 51.00 +1.86 The VIX moved up and did not confirm the move up in the SPX on Thursday. Strongest Sectors: XLB +3.79%...XLB+2.96%...XLY +2.46% Weakest Sectors: XLF -4.59%...XLP +0.44%...XLU +0.53% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK, XLF Down Trending: Stocks rallied off of support lows for each of the broad indices on Thursday forming a potential key reversal day. Watch for confirmation and a higher low and a higher high on Friday's candle. Focus on leading stocks. Friday earnings: C, JCI Earnings reports increase significantly next week. Index Commentary The DJIA formed a hammer…fell to 8,000 support and bounced…closed below its 20, 30 and 50 DMA. The SPX formed a hammer…fell to 817 support and bounced…closed below its 20, 30 and 50 DMA. The Nasdaq formed a bullish harami hammer pattern…fell to 1,450 support and bounced…closed below its 20, 30 and 50 DMA. The RUT formed a bullish harami hammer pattern…fell to 440 support and bounced…closed below its 20, 30 and 50 DMA. Stocks to Watch on Friday Check out the support bounce with volume increase on AME, ESI, GES, MON, PCLN, RIMM Leading Stocks: Holding Above 30 DMA PCLN…JOSB…BIIB…QSII…BCO…ROST…AET…ESI…GES…JW.A…MYGN…DNA…HLF…OSIP…AGN…LAYN…AMED…BCR…CAM…FLIR…CTSH…HP…GME…MON…RIMM…ICLR…SYNA…BLUD…CERN…RTN…TEVA Moving Above 30 DMA = 14 AME…APH…DLTR…DV…IIVI…KEX…MOS…MTD…NIHD…RIO…SPN…STRA…TECH…URBN Moving Below 30 DMA = 4 BAP…NGS…POT…WCG Staying Below 30 DMA GIS…PTNR…AXYS…SINA…PRGO…PPD…ESRX…CHTT…IRIS…ISRG…SPTN…ENDP…ANSS…CHU…EZPW…NILE…PSSI…PSYS…VIVO…WAB…JCOM…MCRS…NDAQ…AAPL…AFAM…EPR…FSTR…HAS…LFC…MMM…MTW…NE…NEU…RCI…SOHU…VIP…AMX…CBST…DECK…FLR…MBT…SNA…VMI…WMS…ADBE…ATK…PCP…PETS…ACL…AMZN…ATW…AYE…BYI…CCC…CIR…CL…FLS…FWLT…GILD…HDB…JEC…K…LNN…NOV…OI…PCR…RIG…SHW…SWN…UTX…VAR Thursday’s Action Moving Up: STRA…FSLR…CF…MON…AEM…SCHN…X…MOS…AGU…PCLN…HANS…CLF…NUE…IPI…ONXX…ADM…FWLT…UAUA…COH…INFY…GDX… Moving Down: MA…ZION…V…SOHU…GS…KBE…AFAM…MS…RF Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Down

Stocks Break Recent Lows

DJIA - 248.42, -2.94% SP500 - 2917, -3.35% NASDAQ Comp. - 56.82, -3.67% Russell 2000 - 20.62, -4.35% Exchange NYSE NASD Advancing 486 513 Declining 3,330 2,287 Oil $37.28 -$0.50 Gold $808.20 -$11.90 SOX 202.01 -8.78 VIX 49.14 +5.87 The VIX moved up confirming the move down in the SPX on Wednesday. Strongest Sectors: XLU -1.23%...XLV-1.42%...XLP -2.20% Weakest Sectors: XLF -5.77%...XLE -4.78%...XLY -3.91% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK, XLF Down Trending: The broad indices broke below the Dec 29 horizontal support level and moved lower after a weaker -2.7% than forecast -1.2% retail sales report for December. News about Steve Jobs taking a leave of absence for health reasons drove down another 7% in after-hours trading after falling almost 3% during regular trading hours. Decliners led advancers by more than 6 to 1 on the NYSE and more than 4 to 1 on the Nasdaq. All nine sector ETFs closed lower on Wednesday. Selling drove prices below Tuesday’s low making Wednesday the new low day in the current move down from resistance. Downward momentum accelerated after Tuesday’s slowdown in downward momentum. Earnings On Wednesday SHFL reported +0.12 better than expected +0.08 earnings. XLNX reported +0.32 in line earnings. Thursday earnings: JPM, DNA, INTC Friday earnings: C, JCI Earnings reports increase significantly next week. Index Commentary The DJIA formed a large black candle breaking below its Dec 29 low and falling to its Dec 5 horizontal support area…closed below its 20, 30 and 50 DMA. The SPX formed a large black candle falling below its Dec 12 horizontal support…closed at it Oct 10 horizontal support low…next horizontal support Dec 1 low of 815…closed below its 20, 30 and 50 DMA. The Nasdaq formed a large black candle falling to its Dec 12, Dec 29 horizontal support low …moved and closed above its 30 DMA…next horizontal support from Dec 5 at 1,400 area…closed below its 20, 30 and 50 DMA. The RUT form a large black candle breaking below its Oct 10 and Dec 29 lows…next horizontal support from Oct 29 and Dec 12 at 440…closed below its 20, 30 and 50 DMA. Stocks to Watch on Thursday Check out the support bounce with volume increase on AGN and RTN Leading Stocks: Holding Above 30 DMA PCLN…BAP…JOSB…BIIB…QSII…BCO…ROST…AET…POT…ESI…GES…JW.A…MYGN…DNA…HLF…OSIP…AGN…WCG…LAYN…AMED…BCR…CAM…FLIR…NGS…CTSH…HP…GME…MON…RIMM…ICLR…SYNA…BLUD…CERN Moving Above 30 DMA = 2 RTN…TEVA Moving Below 30 DMA = 30 ACL…AMZN…ATW…AYE…BYI…CCC…CIR…CL…FLS…FWLT…GILD…HDB…IIVI…JEC…K…KEX…LNN…MOS…MTD…NIHD…NOV…OI…PCR…RIG…RIO…SHW…SPN…SWN…UTX…VAR Staying Below 30 DMA GIS…PTNR…AXYS…URBN…SINA…PRGO…PPD…ESRX…CHTT…IRIS…ISRG…SPTN…CELG…ENDP…TECH…ANSS…CHU…EZPW…NILE…PSSI…PSYS…VIVO…WAB…JCOM…MCRS…NDAQ…AAPL…AFAM…AME…DLTR…EPR…FSTR…HAS…LFC…MMM…MTW…NE…NEU…RCI…SOHU…VIP…AMX…CBST…DECK…DV…FLR…MBT…SNA…VMI…WMS…ADBE…APH…ATK…PCP…PETS…STRA Wednesday’s Action Moving Up: None (for the second time this week) Moving Down: FSLR, POT, STRA, MA, CLF, SCHN, ADM, PNRA, CF, CNX, NUE, V, MON, X, BTU, FWLT, GS, AGU, AEM, PCLN, GDX, HANS, MS, SOHU, ONXX, LAMR, KRE, NIHD, EBAY, COH, KMT, IPI, MOS, ANR, NDAQ, GRMN, KBE, MEE, INFY, ZION, LCC, ESRX, UAUA, AFAM Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Down

Stocks Stabalize at Horizontal Support Levels

DJIA - 25.41, -1.46% SP500 + 1.53, +0.18% NASDAQ Comp. + 7.67, +0.50% Russell 2000 + 4.99, +1.06% Exchange NYSE NASD Advancing 1,947 1,538 Declining 1,829 1,242 Oil $37.78 +$0.19 Gold $820.10 -$0.20 SOX 210.79 +1.70 VIX 43.27 -2.57 The VIX moved down confirming the move up in the SPX on Tuesday. Strongest Sectors: XLE +2.50%...XLF+1.37%...XLV +0.85% Weakest Sectors: XLU -1.89%...XLI -1.72%...XLY -1.29% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK, XLF Down Trending: The broad indices traded in a relatively narrow range on Tuesday suggesting the recent drop in stock prices was slowing as price levels reached the Dec 29 horizontal support area. Advancers led decliners on both the NYSE and Nasdaq. Five of the nine sector ETFs close higher on Tuesday. Today is the low day in the current pull back, indices are at horizontal support and downward momentum abated today. A break above the high of the low day is an entry signal for some short-term traders. Watch for a potential support bounce on Wednesday. Earnings Earnings season started on Monday with AA -0.28 and LPHI +0.51 reporting lower than expected earnings. On Tuesday BMO (Before Market Open) INFY +0.56 and IIIN -0.08 reported better than expected earnings. After the close, LLTC +0.38 also reported better than expected earnings. Wednesday earnings: SCHW, XLNX Thursday earnings: JPM, DNA, INTC Friday earnings: JCI Earnings reports increase significantly next week. Index Commentary The DJIA formed a spinning top as buyers appeared near the Dec 29 low…Tuesday is the low of its recent pullback…closed below its 20, 30 and 50 DMA. The SPX formed a white spinning top…Tuesday is the low day of the recent pullback… closed below its 20, 30 and 50 DMA. The Nasdaq formed a white spinning top with the low a fraction of a point lower than Monday’s low…moved and closed above its 30 DMA…closed below its 20 and 50 DMA. The RUT fell below Thursday’s low…closed just above its 20 and 50 DMA and just below its 30 DMA. Stocks to Watch on Wednesday Have you been watching the number of stocks moving above and below the 30 DMA each day? If you have you might notice how this number in each direction expands and contracts near resistance and support levels. On Monday there was only one moving above and 17 moving below. Notice today’s numbers. Just a clue on why we have been including that number each day. Enjoy! Leading Stocks: Holding Above 30 DMA AYE…PCLN…BAP…PCR…JOSB…AMZN…BIIB…BYI…QSII…OI…FLS…BCO…MOS…ROST…AET…POT…UTX…CAM…CCC…CIR…CL…ESI…GES…JW.A…MYGN…ACL…DNA…HLF…OSIP…AGN…KEX…LAYN…RIO…SHW…AMED…BCR…CAM…FLIR…NGS…NOV…SPN…CTSH…K…NIHD…HP…ATW…GME…MON…RIMM…ICLR…SYNA…BLUD…CERN Moving Above 30 DMA = 10 FWLT…GILD…HDB…IIVI…JEC…LNN…MTD…RIG…SWN…VAR. Moving Below 30 DMA = 8 ADBE…APH…ATK…PCP…PETS…RTN…STRA…TEVA Staying Below 30 DMA GIS…PTNR…AXYS…URBN…SINA…PRGO…PPD…ESRX…CHTT…IRIS…ISRG…SPTN…CELG…ENDP…TECH…ANSS…CHU…EZPW…NILE…PSSI…PSYS…VIVO…WAB…JCOM…MCRS…NDAQ…AAPL…AFAM…AME…DLTR…EPR…FSTR…HAS…LFC…MMM…MTW…NE…NEU…RCI…SOHU…VIP…AMX…CBST…DECK…DV…FLR…MBT…SNA…VMI…WMS Tuesday’s Action Moving Up: MA, POT, SCHN, INFY, NUE, CNX, AEM, BTU, FWLT, NDAQ, ZION, AGU, X, ANR, ADM, CLF, CF Moving Down: FSLR, STRA, PNRA, PCLN Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Down

Stocks Short Term Drop Continues

DJIA - 125.21, -1.46% SP500 - 20.09, -2.26% NASDAQ Comp. - 32.80, -2.09% Russell 2000 - 12.50, -2.60% Exchange NYSE NASD Advancing 899 684 Declining 2,880 2,121 Oil $37.59 -$3.24 Gold $820.30 -$34.00 SOX 209.09 -6.19 VIX 45.84 +3.02 The VIX confirmed the move down in the SPX on Monday. Friday’s VIX small rise did not indicate a Friday or Monday bottom. Strongest Sectors: XLU +0.04%...XLU +0.03%...XLV -1.30% Weakest Sectors: XLF -5.28%...XLB -4.16%...XLE -3.95% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK, XLF Down Trending: The broad market indices continued their move towards horizontal support. Oil followed through on its bear flag and can potentially form a double bottom or W bottom. Gold fell forming a potential bull flag. As markets near support watch for a potential support bounce. Many of the leading stocks in our Stocks to Watch list are forming bull flag patterns. Index Commentary The DJIA formed a black candle as the index neared its Dec 29 low…closed below its 20, 30 and 50 DMA. The SPX formed a black candle as it moved below its 30 and 50 DMA and near its Dec 29 low… closed below its 20, 30 and 50 DMA. The Nasdaq formed a black candle as it moved below its 20, 30 and 50 DMA and 45 points above its Dec 29 horizontal support…closed below its 20, 30 and 50 DMA. Stocks to Watch on Tuesday Leading Stocks: Holding Above 30 DMA AYE…PCLN…BAP…PCR…ATK…RTN…JOSB…AMZN…BIIB…BYI…QSII…OI…FLS…BCO…MOS…ROST…AET…POT…UTX…APH…CAM…CCC…CIR…CL…ESI…GES…JW.A…MYGN…ACL…DNA…HLF…OSIP…AGN…KEX…LAYN…RIO…SHW…AMED…PETS…BCR…CAM…FLIR…NGS…NOV…SPN…CTSH…K…NIHD…PCP…HP…ADBE…ATW…GME…MON…RIMM…ICLR…SYNA…BLUD…STRA…TEVA Moving Above 30 DMA = 1 CERN Moving Below 30 DMA = 17 AMX…CBST…DECK…DV…FLR…FWLT…GILD…HDB…IIVI…JEC…LNN…MBT…RIG…SNA…SWN…VMI…WMS Staying Below 30 DMA GIS…PTNR…AXYS…URBN…MTD…SINA…PRGO…PPD…ESRX…CHTT…IRIS…ISRG…SPTN…CELG…ENDP…TECH…ANSS…CHU…EZPW…NILE…PSSI…PSYS…VIVO…WAB…JCOM…MCRS…NDAQ…AAPL…AFAM…AME…DLTR…EPR…FSTR…HAS…LFC…MMM…MTW…NE…NEU…RCI…SOHU…VIP Monday’s Action Moving Up: None Moving Down: FSLR, POT, GS, CF, X, MOS, AEM, PCLN, SOHU, NIHD, MON, AGU, SCHN, NUE, CNX, V, CLF, GDX, IPI, ANR, BTU, FWLT, GRMN, STRA, DRYS, ADM, MEE, KBE, KMT, SINA, ZION, KRE, COH, NDAQ, HANS Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Down

Failure to Confirm Thursday's Candle Patterns

DJIA - 143.28, -1.64% SP500 - 19.38, -2.13% NASDAQ Comp. - 45.42, -2.81% Russell 2000 - 20.71, -4.13% Exchange NYSE NASD Advancing 1,157 720 Declining 2,645 2,080 Oil $40.83 -$0.87 Gold $854.30 +$0.40 SOX 215.28 -7.26 VIX 42.82 +0.61 The VIX moved up slightly confirming the move down in the SPX on Friday. There was, however, a disparity with the small rise in the VIX and the larger drop in the SPX, suggesting that the pull back was not accompanied by an similar increase in fear. We will see if this equates into a short-term bottom Friday or early next week. Strongest Sectors: XLU -0.78%...XLV -1.06%...XLP -1.71% Weakest Sectors: XLE -3.36%...XLF -3.18%...XLY -3.07% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK, XLF Down Trending: The indices closed below Thursday's low on Friday. The indices are well above their late December lows so continue to watch for a potential support bounce and a higher low on Monday. Index Commentary The DJIA did not confirm Thursday’s hammer…closed just below its 20, 30 and 50 DMA. The SPX did not confirm Thursday’s hammer… closed below its 20 DMA and above its 30 and 50 DMA. The Nasdaq did not confirm Thursday’s piercing line pattern…closed above its 20, 30 and 50 DMA. The RUT fell below Thursday’s low…closed below its 20 DMA and above its 30 and 50 DMA.

Stocks to Watch on Monday Leading Stocks: Holding Above 30 DMA AYE…PCLN…BAP…FLR…JEC…PCR…ATK…RTN…SNA…WMS…JOSB…AMZN…BIIB…BYI…HDB…FWLT…QSII…VMI…OI…FLS…BCO…MOS…ROST…AET…POT…UTX…APH…CAM…CCC…CIR…CL…DECK…ESI…GES…GILD…JW.A…MYGN…ACL…DNA…HLF…OSIP…AGN…KEX…LAYN…RIO…SHW…AMED…PETS…BCR…CAM…FLIR…NGS…NOV…SPN…CTSH…IIVI…K…NIHD…PCP…SWN…AMX…HP…ADBE…ATW…GME…MBT…MON…RIMM…LNN…RIG… ICLR…SYNA…CBST…BLUD Moving Above 30 DMA = 3 DV…STRA…TEVA Moving Below 30 DMA = 15 AAPL…AFAM…AME…DLTR…EPR…FSTR…HAS…LFC…MMM…MTW…NE…NEU…RCI…SOHU…VIP Staying Below 30 DMA GIS…PTNR…AXYS…URBN…MTD…SINA…PRGO…PPD…ESRX…CHTT…IRIS…ISRG…SPTN…CELG…ENDP…TECH…ANSS…CHU…EZPW…NILE…PSSI…PSYS…VIVO…WAB… CERN…JCOM…MCRS…NDAQ Friday’s Action Moving Up: STRA, FSLR, DRYS, Moving Down: AFAM, COH, ESRX, MA, SCHN, X, GS, ANR, ONXX, MON, PCLN, CLF, KRE, NUE, CNX, SINA, SOHU, MOS, KBE, NIHD, CF, PNRA Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Down