Indices Are Lower - Third White Soldier Appears AWOL

During the first two hours of trading the DJIA, S&P, Nasdaq and Russell are clearly pausing with modest pullbacks. At this moment the DJIA is slipping below yesterday's low. The S&P, Nasdaq and Russell near their lows of the morning have made a higher high and higher low so far today. Watch the S1 support levels. AAPL is moving higher after Monday's confirmation of Friday's hammer. AAPL is up over $3. Today's Action: Moving Up CF, FSLR, POT, DRYS, BIDU, MON, AGU, MOS, CLF, AAPL, BTU, RIMM, MA, IPI, MTL, AMZN, MEE, CNX, V Moving Down: STRA, MS, IBM, GRMN, GS, MER, LEH, CELG, BRCM, ESRX

Futures Trading Higher in Pre-Market

7:31 MT - The market is open and AAPL is trading up $1.20 and moving higher. Pre-market Futures are trading higher this morning. This at least an indication that today MIGHT be a third large white candle or the three white soldiers pattern. I emphasis MIGHT because even pre-market futures don't always lead to an up day. Trade with the trend and watch at those key resistance areas if momentum turns to the downside. Last night there was some discussion about AAPL being down in the after-market on approximately 176,000 shares on some rumor...we said watch what the big money does in the regular market tomorrow. If the pre-market is any indication it is suggesting the stock could go higher as it is trading up $1.20 from yesterday's close.

Two White Candles - Three White Soldiers Next?

DJIA - 38.27, -0.31% SP500 + 0.11, +0.01% NASDAQ Comp. + 20.28, +0.83% Russell 2000 + 7.13, +0.97% Oil closed at $134.61 down 25 cents Oil traded as high as 138.69 on Monday before selling off and closing down 25 cents for the day. The broad indices started the day moving down from Friday’s close and found support around the S1 level of Friday’s and rebounded to close above their lows. The DJIA formed a higher low near the S1 support of Friday’s large white candle. Monday was a higher low and higher high even though the DJIA closed down for the day. The DJIA continues trading below its 20, 30, 50 and 200 DMA. The S&P also found support above the S1 support level of Friday’s large white candle and formed a higher low and higher high. Today’s candle was a small white spinning top. The S&P is still well below its 20, 30, 50 and 200 DMA. The Nasdaq opened lower in the support area of its 50 DMA and found buyers early in Monday’s trading session. The index closed near its highs of the day, making a higher low and higher high while forming a second large white candle. If Tuesday forms a large white candle, this will be a three white soldiers candle pattern. The Nasdaq which closed above its 50 DMA on Friday also closed right at its 20 and 30 DMA. Monday was the second consecutive day the index closed above the May 23 double top support low and the January horizontal resistance. The Nasdaq is below its 200 DMA at 2,510. Watch trading closely to see if it continues to trade above the important 2,425 – 2,430 support area. The Russell (RUT) opened just slightly lower than Friday’s close and found buyers early also making a higher low and higher high while forming a second large white candle. Like the Nasdaq a large white candle tomorrow would form a three white soldiers pattern. The RUT broke through and closed above its 30 and 20 DMA on Monday. The RUT’s 200 DMA is 744 just four points higher than Monday’s close. Watch for a potential breakout of this resistance area. AAPL formed a bullish engulfing pattern on Monday confirming Friday’s hammer pattern. Today’s close was near the R1 resistance area of Thursday’s large black candle and above the May 23 double top support low. FSLR made a higher low and higher high on Monday as it closed above its 50 DMA. FSLR closed above Friday’s close and below Monday’s open and intra-day high, which formed a small black spinning top. This is likely a result of oil prices pulling back today. If Tuesday’s price were to move lower FSLR could form an evening star pattern. If the price moves higher it obviously won’t form an evening star. BIDU closed above the high of its low day on Thursday June 12 when it bounced off its 200 DMA. Monday’s price closed near its 20 and 50 DMA. This is a support bounce chart with BIDU currently below but very near to its 20, 50 and 30 DMA. MA moved higher on Monday after closing above the high of the low day on Friday. MA is in a support bounce move closing today above both its 20 and 30 DMA. DRYS formed a second small spinning top in a row on Monday. Trading below its 20, 30, 50 and 200 DMA appears to be forming a bear flag pattern. Moving Up: STRA, BIDU, RIMM, CF, DECK, AAPL, POT, GS, SOHU, FSLR, MEE, AMZN, IPI, AGU, DRYS, MA, MTL, FWLT, V, JASO, CELG, LEH, MS, NUE, BRCM, MER, GRMN Moving Down: X, MON, ESRX Intermediate Term Market Trend: Down (DJIA, S&P) Short Term Market Trend: Up

Markets Continue to Rally

The S&P has joined the Nasdaq and Russell in positive territory. The DJIA is near breakeven for the day. AAPL's bullish engulfing pattern is getting bigger. RIMM which we mentioned for a buy stop at 136.25 in our audio commentary last Thursday morning triggered this morning in the simulation account and is now up $4 plus on the stock. This is confirmation of Friday's bullish harami.

Nasdaq and Russell Above Friday's High

Just over two hours into Monday's trading both the Nasdaq and Russell are positive and above Friday's high. The DJIA and S&P are still negative and below Friday's high. AAPL has erased its early weakness and at this moment is a bullish engulfing pattern on Friday's hammer. Monday's Early Action: Moving Up: BIDU, STRA, RIMM, CF, DECK, POT, GS, MA, AGU, MTL, PCLN, IPI, MON, FSLR, USO, DRYS, MOS, MEE, LEH, AMZN, FWLT, CELG, MS, BRCM, V, MER, SOHU, CNX, JASO

Indices Bounce Near Friday's S1 Support

Indices are bouncing off the S1 support of Friday's large white candle. Monday's Early Action Moving Up: FSLR, GS, DECK, RIMM, MA, POT, AGU, USO, STRA, DRYS, MTL, BIDU, MOS,k MEE, X, IPI, LEH, MS, CNX, FWLT, MON, AMZN, BRCM Moving Down: AAPL

Indices are Down on Monday Morning

The DJIA is down over 90 points, the S&P is down over 7 points, the Nasdaq is down over 10 points and the Russell is down just over 2 points. Watch the S1 and S2 support levels on Friday's large white candle to see if the Thursday/Friday rally fizzles and prices fall below support or if there is a continuation with a bounce off of short-term support. Oil is rising up over $3.80 in early trading. AAPL is down falling below the May 22 double top low and the hammer pattern does not yet show signs of confirmation. Monday Morning Action: Moving Up: DECK, USO, RIMM, POT, FSLR, AGU, BIDU, DRYS Moving Down: PCLN, ESRX, SCHN, AAPL, CLF, IBM

A Personal Observation

I'm sure that most everyone is aware that Tim Russert, the "Meet the Press" host and NBC political analyst and commentator passed away on Friday afternoon of a heart attack at work. He had recently returned from a family vacation in Italy. You likely have seen much of the televised tributes to him by his professional colleagues. He was a man respected by many and was a true professional in his field. He will be missed by millions of Americans. While I never had the privilege to meet him, I admired his professionalism and enthusiasm as a viewer for many years, as did many others. His situation is an important reminder of those things that are most important; life, health, family and faith. Trading is about money. But if that is all it is about, it is not enough. Rember as amazing as trading is, it takes a distant second place to those significantly more important aspects of life. Being a profitable trader can provide the money to enagage in wonderful, enjoyable and memorable activities with families, friends and loved ones. Let's make the most of the time, talents and resources we have and be the best we can be in all aspects of our life, not just trading. Remember, none of us knows the day... It is my understanding that his son Luke will be interviewed on "Today" Monday morning, June 16 at 7 am.

Friday the 13th Good Luck - a Bullish Harami Confirmation

DJIA + 165.77, +1.37% SP500 + 20.16, +1.50% NASDAQ Comp. + 50.15, +2.09% Russell 2000 + 13.77, +1.91% Oil closed at $134.86 down $1.88 Friday was a strong rally day with advancers leading decliners by more than a two to one margin. On the NYSE advancers led decliners 2,271 to 852 and on the Nasdaq advancers led 2,081 to 821 decliners. The DJIA confirmed Thursday’s inverted hammer bullish harami on Friday. The DJIA is still trading below its 20, 30, 50 and 200 DMA. It is still in a four week down trend and two day short-term up trend. Watch the R1 and R2 resistance levels of the June 6 large black candle. The S&P also confirmed Thursday’s inverted hammer bullish harami on Friday. The S&P is trading below it 20, 20, 50 and 200 DMA and is in a four week down trend and two day short-term up trend. Watch the R1 and R2 levels of the June 6 large black candle. The Nasdaq confirmed its bullish harami pattern from Thursday with a breakout that closed above it 50 DMA, the double top support area established on May 23 and the January horizontal resistance area. Watch to see if this breakout holds. The Nasdaq has a relatively stronger chart pattern than either the DJIA or S&P. The Nasdaq is trading below its 20, 30 and 200 DMA. The Russell (RUT) also confirmed on Friday the inverted hammer bullish harami formed on Thursday with a breakout. The RUT closed above its 50 DMA and above the January horizontal resistance area and right at its 30 DMA. It is still trading below its 20 and 200 DMA. Watch the resistance areas of the 30, 20, 200 DMA and the January horizontal area that it closed above on Friday. AAPL one of the few stocks in our watchlist to close down on Friday, is in a short-term down trend and formed a hammer candle pattern on Friday. After a strong sell off it managed to close above the double top low made on May 22. If AAPL moves up on Monday it could form a morning star candle pattern. Even though oil was down on Friday energy related stocks were strong right along with most other stocks. XLE formed a bullish engulfing pattern on Friday. USO which was down was an exception to Friday’s strong move up and seems to be forming a horizontal bull flag. FSLR which has been trading well above its 200 DMA broke through both its 20 and 30 DMA on Friday and is just 2 points below it 50 DMA. FSLR traded 3.4 million shares which was below average volume. BIDU which was up on Friday is trading just above its 200 DMA for the fourth straight day. Watch this key pivot area for a bounce or break. BIDU traded 2.9 million shares which was below average volume. GS had a large support bounce on Friday on 14.3 million shares approximately 150% of average volume. It broke above the key 177.50 resistance area. If it holds above this area the chart measuring technique suggests a potential move to the next key resistance area of 192.50 during the next two weeks. MA closed on Friday above the high of the low day on 2.1 million shares, which is approximately half of average volume. Look at a similar bounce day on May 27 on similarly weak volume. This below average volume on May 27 support bounce did not keep MA from moving from 279 to 320 over the following four trading days on June 2. Of course, past price action does not guarantee future price action. Friday’s Action Moving Up: FSLR, GS, BIDU, MA, X, STRA, MOS, CF, DECK, MEE, SCHN, PCLN, CLF, CNX, SOHU, AGU, POT, RIMM, NUE, LEH, AMZN, FWLT, MS, DRYS, MON, IBM, NKE, IPI, V, MER, BTU, CELG, JASO Moving Down: USO, AAPL, GRMN Intermediate Term Market Trend: Down (DJIA, S&P) Short Term Market Trend: Up Watch for expanded stock commentary starting today and more intra-day posts!

Markets Close at High on Friday

The S&P, Nasdaq and Russell 2000 (RUT) closed at their high for the day on Friday, while the DJIA close with two points of its high. This was a strong rally off of bullish harami candle patterns on Thursday. This is a strong finish to what had been a week of selling after last Friday's, June 6, large selloff following a weak unemployment report that morning. Friday's rally brings the Nasdaq Composite and RUT back above their respecitve 50 DMA. Today's candle for both indices is confirmation of Thursday's bullish harami candle pattern. The Nasdaq closed above its 50 DMA and is still below the 20, 30 and 200 DMA. Friday's close is above the January - April high 2,425 horizontal resistance area. This is also above the double top support low that was formed on May 23. Key question: Will this be a failed double top support break or is this simply a test of the break that will form a lower high and then resume the move to the double top target price area of 2,300? The RUT closed right at its 30 DMA. The RUT is now above the 50 DMA, at the 30 DMA and below the 20 and 200 DMA. The RUT closed a fraction above the January high 731 horizontal resistance area. This is a key pivot area. We will post more on Friday's action later and throughout the weekend.

The Bullish Harami - Inverted Hammer Rally

In our audio commentary last night we pointed out the large number of bullish harami and inverted hammer candle patterns that were on different charts. We also pointed the same in last night's Chart Signals posting on the DJIA, S&P, Nasdaq and Russell. In the audio commentary we mentioned that it would be typical to see a rally of some degree. Today there is a rally in the broad indices. In fact almost every stock on our watchlist except AAPL, USO and GRMN is up a little, and most are up between 1 to 7 points. We also mentioned that if a rally did occur, to look for the rally to run out of strength in the MA and horizontal candle resistance areas and watch for bearish opportunities that could appear at that time. We observed that the rally coming off these bullish haramis and inverted hammers could last one to three days. AAPL Breaks Double Top Support The exception is AAPL which broke its double top support and fell below 166 rallied to 174 and is now falling below 170 again. The double top support break target is in the area of 152 for AAPL. We had mentioned to watch for a potential break in last nights audio commentary and also pointed out AAPL in yesterday's Stocks to Watch post before the close. Today's Action as of Mid-Day: Moving Up: BIDU, GS, FSLR, X, MA, PCLN, STRA, DECK, MEE, SCHN, SOHU, MOS, CLF, CNX,CF, LEH, FWLT, AMZN, NUE, NKE, AGU, V, IBM, POT, RIMM, MS, DRYS, MOS, MON, IPI, BTU, CELG

Bullish Haramis, Inverted Hammers and a Market Rally

DJIA + 57.81, +0.48% SP500 + 4.38, +0.38% NASDAQ Comp. + 10.34, +0.43% Russell 2000 + 1.96, +0.27% Oil closed at $136.74 up 36 cents Stocks were higher from the opening bell and then traded lower from mid-day until the close and finished in positive territory for the day. The DJIA chart formed a bullish harami with an inverted hammer candle pattern. The S&P also formed a bullish harami and inverted hammer candle pattern today. The Nasdaq rallied to its 50 DMA before pulling back and forming a bullish harami pattern for the day. The price bar/candle had a lower high and lower low today even though it closed positive for the day. The Nasdaq closed below its January horizontal resistance and below its 50 DMA for the second straight day. The Russell closed below it 50 DMA for the second straight day forming both an inverted hammer and bullish harami candle pattern. Bullish haramis and potential double tops with a bearish divergence in the MACD appeared on many charts today.

Check the Thursday Stocks to Watch list our earlier post.

Today’s Action Moving Up: FSLR, MA, GS, STRA, V, CLF, ESRX, MON, PCLN, MS, MER, IBM Moving Down: AAPL, DRYS, X, BIDU, BTU, SOHU, MTL, RIMM, MOS, CF, FWLT, SCHN, AMZN, LEH, UAUA, MEE, CNX, JASO, CELG, NKE, IPI, POT Intermediate Term Market Trend: Down Short Term Market Trend: Down

Stocks to Watch

Stocks to Watch Before Thursday's Close Stocks Near Support with the Potential to Break: AAPL, BIDU, RIMM, AMZN, FWLT

Boy Oh Boy, What a Great Trend

DJIA - 205.99, -1.68% SP500 - 22.95, -1.69% NASDAQ Comp. - 54.93, -2.24% Russell 2000 - 14.74, -2.01% Oil closed at $138.38 up $5.07 After two down days oil prices moved higher and stocks moved lower in a big way. We wrote in our June 9 and 10 posts how decliners leading advancers highlighted the weakness in the rally in the DJIA. Well today decliners led gainers by even a larger margin and the DJIA dropped in a big way. Decliners led advaners 2,588 to 590 on the NYSE and 2,224 to 669 on the Nasdaq. If you read our May 30 post and took the technical evidence presented there seriously you probably love trading right now. If you didn’t or you forgot what we wrote, take a moment and go review it. Learn from the technical evidence that we presented there so when it occurs in the future you will be prepared the next time. We wrote in our June 7 post regarding the S&P, “If Friday’s break below 1,370 holds, look for a target of 1,334, in the area of mid April horizontal support.” Today’s close of 1,335.49 is eerily close to that target. The only downside to our accurate reading of the Chart Signals is that someone says something like “you knew that was going to happen didn’t you?” The reality is we don’t see the future; we just understand the Chart Signals and know they give us a solid insight into what is likely to happen. The good news is that oil prices rose and the Nasdaq and Russell followed the Dow and S&P and broke support today. The Nasdaq broke below its double top support in the 2,425 and with a resulting price target of 2,300 on the index. This support area also represents the old horizontal support area from January which has been acting as an area of support that was broken today. The Nasdaq is now trading below its 20, 30, 50 and 200 DMA. Broken support suggests more down trend to follow. The Russell 2000 closed below its May 23 low horizontal support area which is suggesting a change in trend from up to down. As of today the Russell is also trading below its 20, 30, 50 and 200 DMA. The S&P which fell below its 50 DMA on Friday continues to move lower. The next horizontal support area is in the 1,324 area. The DJIA which has been trading below its 20, 30, 50, 200 DMA since May 21 continued its downtrend today. The next major support area is the mid-March lows in the 11,800 area. Watchlist Stocks Still In Intermediate Term Up Trend: AGU, MOS, USO, MEE, IPI, POT, CNX, BTU, STRA, SCHN, IBM, MON, CLF, MA, SOHU Potential Double Tops: X, AAPL, CF, MTL Most of the other stocks have shifted into a sideways trading range or down trend already. Most other stocks in our watchlist have already changed to sideways trading range or down trend. We'll share more Chart Signal insights on individual stock charts over the balance of the week so check back regularly. Today’s Action Moving Up: FSLR, AGU, MOS, USO, MEE, IPI, POT, CNX, JASO Moving Down: BIDU, MA, PCLN, DECK, AAPL, GS, DRYS, CLF, X, LEH, RIMM, MON, SCHN, IBM, V, MER, FWLT, AMZN, MS, NUE, GRMN, STRA, CELG, EBAY, EXPE, NEK, ESRX, UAUA, BRCM Intermediate Term Market Trend: Down Short Term Market Trend: Down

Oil Falls Again, Stocks Still Weak

DJIA + 9.44, +0.08% SP500 - 3.32, -0.24% NASDAQ Comp. - 10.52, -0.43% Russell 2000 - 2.63, -0.36% Oil closed at $131.31 down $3.04 For the second day in a row decliners led advancers on both the NYSE 2,085 to 1,091 and the Nasdaq 1,646 to 1,195. The weak rally in the DJIA yesterday and today is holding below the R1 resistance level of Friday’s large black candle. The DJIA did manage to form a slightly higher high and low on its price bar/candle today. The S&P closed lower while forming an inside day. The Nasdaq also formed an inside day as it bounced off of the 50 DMA for the second day in a row. It closed just above the May 23 support low. A break below 2,430 would represent a confirmed double top. The Russell closed below its 30 DMA today. It is now below its 200, 20 and 30 DMA and still above its 50 DMA. The Russell did form both a lower high and lower low in its price bar/candle. Unless the indices can rally above recent resistance levels look for the market to move lower which creates some great down trend opportunities. Today’s Action Moving Up: AAPL, MOS, STRA, GS, PCLN, RIMM, AA Moving Down: X, CLF, DRYS, CNX, BIDU, MA, SOHU, SCHN, GRMN, NUE, BTU, AGU, MON, USO, LEG, V, POT, FWLT, ESRX, MTL, IPI, MEE, BRCM Intermediate Term Market Trend: Down (DJIA, S&P) Short Term Market Trend: Down

Markets Mixed as Decliners Top Advancers

DJIA + 70.51, +0.58% SP500 + 1.08, +0.08% NASDAQ Comp. - 15.10, -0.61% Russell 2000 - 5.12, -0.69% Oil closed at $134.35 down $4.19 The DJIA and S&P were up and the Nasdaq and Russell were down. The rally that did occur was not very broad. Decliners led advancers 2,008 to 1,113 on the NYSE and 1,977 to 930 on the Nasdaq. Even with oil prices down today, the energy sector was strong (XLE) along with Metals and Mining (XME) and Materials (XLB). Pharmaceuticals, Biotech, Financials, Semiconductors and Retail were weak. The DJIA and S&P both had bullish harami candle patterns. Look for confirmation tomorrow. On the Nasdaq Composite buying support came in at the 50 DMA and the old horizontal resistance area, now support in the 2,425 area. A breaking of this low support area from May 23 would be a double top pattern confirmation. The Russell had buying come in today the 30 DMA support area. The Russell is coming off a higher high so the current pattern would be a bull flag. Watch for a potential support bounce. Today’s Action Moving Up: MOS, POT, CNX, CF, X, BTU, IPI, RIMM, MON, AGU, CLF, MEE, SCHN, IBM, AA Moving Down: BIDU, FSLR, PCLN, MA, AAPL, GS, USO, LEH, STRA, GRMN, DRYS, V, MS, ESRX, MER, JASO, AMZN, DECK Intermediate Term Market Trend: Down (DJIA, S&P) Short Term Market Trend: Down

Falling Dollar, Rising Oil Lead to Heavy Sell Off

DJIA - 394.64, -3.13% SP500 - 43.37, -3.09% NASDAQ Comp. - 75.38, -2.96% Russell 2000 - 22.73, -3.00% Oil closed at $138.54 up $10.75 A falling dollar, surging oil prices and a jump in the unemployment rate created a selling spree that sent most stocks lower on Friday. On the NYSE decliners led advancers 2.584 to 564 and on the Nasdaq decliners 2,343 led advancers 548. This was definitely a broad based sell off. Which is a good thing for traders who where watching the charts and prepared for this move to the downside. This sell off was consistent with the concerns we posted last Friday before heading offshore. The DJIA reached its double top price target of 12,294 on Friday; we specifically mentioned the 12,294 target in our May 21 post. Can the chart really give us insight into future technical action of the market and stocks? Anyone who has followed our analysis for any time knows we have been extracting forecasts and outlooks just like this one for a long time. Do we know the future? Absolutely not! Can technical analysis give a trader insight into a probable outcome and price target? It has once again. The DJIA is trading below its 20, 30, 50 and 200 DMA and is at its March 31 horizontal support level. The S&P, as of Friday, is trading below its 20, 30, 50 and 200 DMA and is clearly coming off of lower highs and forming lower lows. If Friday’s break below 1,370 holds, look for a target of 1,334, in the area of mid April horizontal support. The Nasdaq which had a new high close and a close above its 200 DMA on Thursday is in a chart pattern which is a potential double top. The Nasdaq managed to close below it 200, 30 and 20 DMA on Friday. It has continued to be in an uptrend but the sell off on Friday in addition to breaking below the moving averages is also forming a bearish divergence in the 2-line MACD and the MACD histogram. Technically, the Nasdaq, still in an uptrend, is clearly finding sellers in the area of the 200 DMA once again. The Russell also still in an uptrend broke through resistance on Thursday with its highest close since December 31 fell back below the 750 horizontal resistance area and its 200 DMA. It continues to trade above its 20, 30 and 50 DMA. Friday’s Action Moving Up: USO, IPI, MEE, BTU, DXD, DOG Moving Down: BIDU, MA, SOHU, GS, STRA, CF, DECK, DRYS, PCLN, CLF, FSLR, RIMM, AMZN, AAPL, MS, V, ESRX, IBM, X, MON, NUE, NKE, POT, CELG, MER, MTL, LEH, FWLT, UAUA, BRCM, GRMN, CNX, EXPE, MOS, SBUX, JASO, EBAY, SCHN, AGU Intermediate Term Market Trend: Down (DJIA, S&P) Short Term Market Trend: Down

Markets Breaking Friday's Low

As I stated in Friday's post, the indices were looking weak. Monday morning they are behaving weak! All four indices are down during the first couple of hours and all four have broken Friday's low. The Nasdaq and Russell have broken the low of the high day and are moving back below their 200 DMA. Both are above their 20, 30 and 50 DMA. Both are potential double top M patterns with bearish divergences in the 2-line MACD and the MACD histogram. The S&P is also breaking the low of the high day on a lower high or bear flag chart pattern. The S&P is below its 20, 30 and 200 DMA. It is at the moment above its 50 DMA but moving near the 50 DMA. Watch for a potential break of the 50 DMA and the horizontal support established on 5/23 and 5/27. The DJIA is breaking the low of the high day and it own bear flag pattern. It is trading below its 20, 30, 50, and 200 DMA. It is at the horizontal support zone established on 5/23 and 5/27. Watch for a potential break. What I saw in the charts on Friday is happening on Monday. Energy related and basic material stocks are moving higher. Consumer and Technology stocks are moving lower. Monday's Early Action Moving Up: CNX, MEE, CF, POT, BTU, CLF, MOS, X, MON, ANR, FWLT, AGU, USO, MA, SCHN and NUE Moving Down: FSLR, DECK, PCLN, GS, IBM, AAPC, RIMM, NKE, BIDU, MTL, LEH, STRA, AMZN, MER, MS, EXPE, BRCM, EBAY I'll be on vacation this week so look for my post on Friday!

Markets Ready to Roll Over?

DJIA - 7.90, -0.06% SP500 + 2.12, +0.15% NASDAQ Comp. + 14.33, +0.57% Russell 2000 + 2.73, +0.37% Oil closed at $127.35 up 75 cents I attended my youngest son’s high school graduation this afternoon. His senior class motto was the following: “Live life as if you were to die tomorrow. Learn as if you were to live forever.” --Mahatma Gandhi Give this idea some thought. See if it fits in your life. Ponder whether there is a principle that applies to the art of trading. I did and I am the better for it. I would like you to be the better also. The market rallied in this holiday shortened week. Only the DJIA failed to close higher for the fourth straight day. Come Monday you must trade the markets not your thoughts or the thoughts I am about to share. This market acts tired and ready to roll over. Does that mean the market is going to roll over? Not necessarily. However you want to ready if it does roll over and here is the technical evidence I am seeing Friday... The DJIA had an inside day, essentially a bearish harami and failed to close above its 50 DMA for the second straight day. The DJIA is trading below the 20, 30 50 and 200 DMA. The 20 DMA is pointing down. It is trading below the January/February resistance high that it traded above for three weeks. It failed to break above the R1 resistance level of the large black candle on May 21. The low on May 9 between the double top acted as resistance to yesterday’s advance and Friday the index made a lower high. This is a potential bear flag chart pattern. A bear flag of course is a short term trend continuation pattern. Also Thursday and Friday’s selling is in the resistance area of the 50 DMA. The S&P also formed an inside day on Friday that could be day 2 of an evening start pattern if the index moves down on Monday. While the S&P is above its 50 DMA and right on top of the 30 DMA, it is below the 20 and 200 DMA. It is a the R1 (May 21 large black candle) and 20 DMA resistance areas. The S&P is also forming a potential evening star pattern. The Nasdaq is technically stronger than the Dow and S&P. Still in an up trend that recently made a higher high and pulled back to an equal low. It is trading above its 20, 30, 50 and 200 DMA. On Friday it closed above the 200 DMA while forming a small spinning top. This could be a potential evening star if the index moves down on Monday. It is in the area of resistance of the last high on May 10 and could form a double top or slightly lower high. A potential bearish divergence exits on both the 2 line MACD and the MACD histogram. Remember this index is currently in an up trend. The Russell 2000 is also in an up trend making a new high close on Friday while at the same time forming an inside day that could potentially be an evening star if the index moves down on Monday. The Russell also closed above its 200 DMA on Friday while forming a lower intra-day high than Thursday. The Russell could also be forming a potential double top with a potential bearish divergence in both the 2 line MACD and the MACD histogram. The question seems to be: Will the DJIA and S&P take this market lower or will the Nasdaq and Russell pull the market higher? The indices moved higher this past week and that is bullish. The price action looked weak by the end of the week, which is potentially short term bearish. Mixed technical information is common at key pivot points…points where the market could move up or move down. That is where the market is right now. Remember, technical analysis is based on probabilities not certainties and there is always a small probability the market can defy all the technical, so you must remain mentally flexible. You must also be prepared to trade to the downside if this market or the individual stocks you trade roll over. There will be a brief post Monday morning but I won’t be posting again until Friday due to a family cruise in celebration of our two high school graduates this past week. I wanted you to understand what I was seeing on the charts so you would be aware of the potential of the market to move up or down from this key pivot point.

If you have access to Market Commentary, read what I wrote there at Friday’s close when it is posted on Saturday.

Today’s Action Moving Up: FSLR, CLF, SCHN, CF, MON, MOS, MTL, AGU, IPI, CNX, PCLN, DRYS, X, AAPL, FWLT, BTU, NUE, POT, MEE, BRCM, SOHU, AMZN, V, GRMN, JASO, USO Moving Down: STRA, DECK Intermediate Term Market Trend: Neutral Short Term Market Trend: Up

Oil Prices Fall, Moving Averages Act As Resistance Once Again

DJIA + 52.19, +0.41% SP500 + 7.42, +0.53% NASDAQ Comp. + 21.62, +0.87% Russell 2000 + 7.09, +0.96% Oil closed at $126.62 down $4.41 Rising oil prices helped energy and basic materials stocks move higher on Wednesday. Falling oil prices sent energy and basic materials stocks lower on Thursday. The broad market found strength and moved higher as we wrote in our earlier post. An afternoon pullback had indices closing below their highs of the day. With energy and basic material stocks down on Thursday the broader market rallied. On the NYSE there were 1,929 advancers to 1,181 decliners. On the Nasdaq advancers led decliners 1,738 to 1,112. The rally found sellers in the afternoon as each of the broad indices ran into areas of resistance. The Russell 2000 had crossed its 200 DMA only to pullback and close just below acting as an area of resistance very much like it did back on May 19. The Nasdaq also crossed its 200 DMA on Thursday only to have sellers push it under by the close. A break above their 200 DMA would be a key pivot for both of these indices. The DJIA which is trading below its 30 and 200 DMA crossed above its 50 DMA only to have seller push price lower with a close just below its 50 DMA. The S&P bouncing off its 50 DMA traded above its 30 DMA only to fall back and close just below the 30 DMA. These moving averages are key areas of resistance. Stay focused to see if the indices can break above these key resistance areas or if they fall once again. Trade accordingly. MA was a big mover after the company said it expected double-digit net revenue growth in 2008 and double-digit profit and revenue growth over the next few years. Today’s Action Moving Up: MA, STRA, V, SOHU, CELG, GS, GRMN, EXPE, RIMM, ESRX, NKE, MS, Moving Down: FSLR, CLF, X, DRYS, USO, CF, CNX, BTU, MEE, PCLN, NUE, MOS, JASO, AGU, FWLT, MON, MTL, DECK Intermediate Term Market Trend: Neutral Short Term Market Trend: Up

GDP Growth Revised Upward, Markets Rally, Energy Pulls Back

The S&P has broken through the horizonal resistance from the January/February highs, the 3o and 20 DMA's and is at the R1 resistance of the May 21 large black candle. The Nasdaq Composite has broken through the R2 and R3 resistance levels on its May 21 large black candle and is breaking through its 20 DMA. The Russell 2000 the strongest of the indices is breaking through its 200 DMA is actually making a new high as we write. This breakout of the 747.99 level gives the Russell a price target of 776.61. It is currently at 749.27. Also the potential Head and Shoulders top has disappeared with today's rally. The DJIA is breaking through its 50 DMA and is at the R1 resistance level of the May 21 large black candle. The Dow is still below its 20, 30 and 200 DMA. To the question I posed in yesterday's post of whether the strong rally in energy and basic material stocks was a sector specific rally or would lead the broader market higher, it certainly seems at this moment to be leading the broader market higher. Many energy and basic material stocks are pulling back today after yesterday's strong rally. This rally seems to be gaining strength from the Commerce Department's revised GDP growth of the first quarter of 0.9% that was released this morning, up from the initial estimate of 0.6% growth. For the past several months in our audio commentary we have consistently pointed out how Fed stimulus of lowering interest rates has historically taken 6 to 9 months to begin to have an impact on the economy. While the news on the economy has been very negative, it seems we are just beginning to see the impact of rates that were begun last August to September. Don't be surprised if the news gets better over the next few months.

Oil Moves Higher, Key Stocks Soar, Indices Have Modest Rally

DJIA + 45.68, +0.36% SP500 + 5.49, +0.40% NASDAQ Comp. + 5.46, +0.22% Russell 2000 + 4.07, +0.55% Oil closed at $131.03 up $2.18 Indices moved higher for the second day in a row and closed near their highs on Tuesday. Gains were smaller than on Monday. Energy, Basic Materials and Metals and Mining sectors moved much stronger than the broad indices. Both the DJIA and the S&P closed below Friday’s high. The stronger Nasdaq and Russell 2000 indices closed above Friday’s high for the second straight day. The market breadth was not impressive as NYSE advancers led decliners by 1.3 to 1 and on the Nasdaq the advancers/ decliners was a paltry 1.05 to 1. Watch trading tomorrow to see if the broader market follows the energy, materials and mining stocks or if this is a sector specific up trend that is taking place this week. We need to see the broad indices move back above resistance to change our intermediate trend to up. Oil stocks USO, XLE, APA and NOV were higher with bullish engulfing candle patterns as were many others stock in the energy sector. Coal stocks KOL, MEE, CNX and BTU moved higher with bullish engulfing candle patterns also. Basic materials and Ag related stocks POT, MOS, MON, CF, AGU, PX, X, AKS, and NUE had huge up days reversing much of the recent weakness. Metals and mining stocks CLF and ANR had a mega up day. As mentioned yesterday we are changing our short-term trend reading to up. Today’s Action Moving Up: CF, CLF, BIDU, DRYS, MOS, MA, FSLR, POT, X, MON, SOHU, DECK, AGU, MTL, CNX, MEE, V, PCLN, BTU, RIMM, NUE, IBM, FWLT, USO, NKE, EXPE, IPI, GS, SCHN, AAPL Moving Down: GRMN, EBAY, CELG Intermediate Term Market Trend: Neutral Short Term Market Trend: Up

Stocks to Watch on Wednesday

Stocks to Watch on Wednesday AAPL, RIMM, SOHU, SOL, DECK Channeling Stocks Near Support: BRCM, KLAC Up Trending Stocks Near Support: CNX, FWLT, INFY, INTC, LLTC, XLNX, TXN Breaking Below 30 DMA: AGU, MON, POT, DRYS Breaking Below 50 DMA: CF, MOS

Strong Bounce in Nasdaq, Russell and Keys Stocks to Watch on Tuesday

DJIA + 68.72, +0.55% SP500 + 9.42, +0.68% NASDAQ Comp. + 36.57, +1.50% Russell 2000 + 10.29, +1.42% Oil closed at $128.85 down $3.34 As I mentioned in Monday’s post after a big down week last week it would be typical to see a short term rally. Well we saw it today. On the heels of some surprise housing data, the Commerce Department reported that new home sales rose 3.3% in April. This was the first rise in six months and it was widely expected to see another drop in sales. Alan Greenspan was quoted in The Financial Times he thought there was “a greater than 50% probability of recession, that probability had receded a little and the probability of a severe recession has come down markedly.” The DJIA rally was very modest and closed at the R1 level of Friday’s candle still below its 50, 30 and 200 DMA’s and below its January and February resistance level. Today’s bounce came at the S1 level of the April 1 large white candle. Remember the DJIA broke a double top support and has a 12,294 price target as posted last week. The S&P bounce came at its 50 DMA and closed just above the R1 level of Friday’s candle. The S&P made a lower low on Friday and is still below its 30 and 200 DMA and its January and February horizontal resistance level. Watch closely to see if this rally makes a lower high. The Nasdaq Composite hit its 30 DMA on Friday closed just above it and bounced higher today. Today was a large white candle that closed above both Friday and Thursday’s highs and closed above the R1 level of last Wednesday’s large black candle. It is above its 30 and 50 DMA’s and below its 200 DMA. It is also above the horizontal resistance from January and February which is acting as new support. The Nasdaq made a 100% retracement to its May 9 low and if it rallies to a lower high could potentially form a head and shoulders top, although this is not the only potential outcome. Dave’s Insight: Think several moves in advance like a master chess player. The Russell 2000 closed above Friday’s high with a large while engulfing type candle. It closed above its 30 DMA on Friday and bounced higher today. It is above its 30 and 50 DMA and below its 200 DMA. Today it closed above its horizontal January resistance. So today is another breakout. Friday’s low was above its May 9 low so this is a higher low and still represents an up trend. Due to the divergence between the DJIA, S&P and the Nasdaq and Russell, we maintain our intermediate term neutral trend reading. If markets rally on Wednesday we will shift our short-term reading to up. Today’s Action Stocks to Watch for Tuesday Channeling: FSLR, JASO moved lower BRCM, CAT traded near support DECK bounced Up Trending: AAPL, RIMM, SOHU, SOL bounced CNX, FWLT traded near support Down Trending: GRMN, GS, LEH, MER, MS traded near support Moving Up: STRA, BIDU, MA, AAPL, RIMM, DECK, CLF, IBM, V, MTL, AMZN, ESRX, GS, NKE, LEH, SOHU Moving Down: FSLR, POT, MOS, CF, X, DRYS, USO, AGU, MON, IPI, BTU, JASO, CNX, SCHN Intermediate Term Market Trend: Neutral Short Term Market Trend: Down

Stocks to Watch on Tuesday

Stocks to Watch on Tuedsay: Channeling Stocks Near Support: FSLR, JASO, BRCM, CAT, DECK Up Trending Stocks Near Support: AAPL, CNX, FWLT, RIMM, SOHU, SOL Down Trending Stocks Near Support: GRMN, GS, LEH, MER, MS

Oil Rises, Markets Fall...Again

DJIA - 145.99, -1.16% SP500 - 18.42, -1.32% NASDAQ Comp. - 19.91, -0.81% Russell 2000 - 8.91, -1.22% Oil closed at $132.19 up $1.38. On Friday, the indices opened lower and moved down until mid-day. The Nasdaq and Russell 2000 rallied from their lows into the close while the DJIA and S&P traded sideways in a narrow trading range. I mentioned in my Thursday evening audio commentary that the rallies were weak and to watch closely the R1 and R2 levels on Wednesday’s large black candle. When the indices failed to bounce and broke below Thursday’s low this indicated that markets were likely to move lower. I had also pointed this out in my Wednesday post. In both my Tuesday and Wednesday post I wrote of the DJIA breaking the support low between the double top and that broken support would give a price target of 12, 294. The DJIA moved toward that target on Friday and closed at 12,479.63. The S&P broke below its May 9 support low. While both the Nasdaq and Russell 2000 are still above their May 9 support lows. The DJIA is below its 200 DMA and 30 DMA. On Friday it fell below its 50 DMA. The S&P is below its 200 DMA and 30 DMA and closed on Fricay just above its 50 DMA. The Nasdaq and the Russell 2000 are below the 200 DMA, above the 50 DMA and closed just above the 30 DMA on Friday. Only the Nasdaq index is still above its January resistance levels. With the other three indices falling below the January resistance levels and back in the January to April trading channel, we are adjusting our intermediate term trend to neutral. The Nasdaq intermediate term trend is still up. With the pullback of the last week it would be typical to see a short-term rally. If a rally does occur, watch if the rally forms a lower high. A lower high combined with this week’s lower low would confirm a change in trend. Also watch the R1, R2 and R3 levels of Friday’s candle.

Markets were closed Monday for Memorial Day and open Tuesday morning.

Friday’s Action Moving Up: FSLR, AAPL, GRMN, USO, PCLN, RIMM, JASO, CELG, BRCM Moving Down: BIDU, CF, GS, SCHN, POT, STRA, MA, MOS, BUT, LEH, NUE, DRYS, MTL, MEE, DECK, MER, MS, SOHU, CNX, AGU, V, AMZN, ESRX, EXPE Intermediate Term Market Trend: Neutral Short Term Market Trend: Down

Oil Prices Fall, Stock Prices Rise

DJIA + 24.43, +0.19% SP500 + 3.64, +0.26% NASDAQ Comp. + 16.31, +0.67% Russell 2000 + 5.09, +0.81% Oil prices fell $2.36 to close at $130.81. Stocks prices rallied today and the broad indices remained below the R1 level of yesterday’s large black candle. The DJIA also remained below its 30 and 200 DMA. The S&P stayed at its 30 DMA and below its 200 DMA. The Nasdaq Composite and Russell 2000 both stayed below their 200 DMA and above their 30 MDMA. Numerous bullish haramis, piercing lines and bull flag patterns existed on both the indices and individual stocks charts today, suggesting the probability that prices will bounce higher. It is important to watch for a break through the R1 & R2 levels.

Markets will be closed on Monday, May 25 in observance of Memorial Day. Expect trading volume to be lower than normal on Friday in front of the 3-day weekend.

Today’s Action Moving Up: POT, CF, STRA, MOS, DECK, SCHN, MON, CELG, IBM, CLF, AMZN Moving Down: BIDU, DRYS, FSLR, X, MTL, V, MA, USO, RIMM, NUE, GS, AAPL, LEH, JASO, FWLT and BTU Intermediate Term Market Trend: Up Short Term Market Trend: Down

Oil Hits New High, Dow Breaks Double Top Support Low

DJIA - 227.49, -1.77% SP500 - 22.69, -1.61% NASDAQ Comp. - 43.99, -1.77% Russell 2000 - 8.53, -1.16% Oil closed at a new high of $133.17. The DJ Transportation Average closed down 2.06%. Stock prices fell even further on Wednesday. The DJIA broke the support between it double tops which now generates a lower price target of 12,294. The DJIA also closed just below its 50 DMA. The S&P, Nasdaq Composite, Russell 2000 and DJ Transportation are still above their recent support lows. The S&P closed at its 30 DMA. The Nasdaq and the Russell 2000 closed above their 30 DMA. The DJ Transportation closed just below its 20 DMA.

If the indices rally on Thursday watch the R1, R2 and R3 short term resistance levels on Wednesday's large black candle. If a rally fails to break these resistance levels look for a resumption of the down trend this week.

Remember the Memorial Day weekend is coming and that the markets will be closed on Monday.

Decliners led advancer 2,210 to 917 on the NYSE while the Nasdaq decliners led advancers 903 to 1,991. While we changed our short-term trend reading to down on Tuesday, we are still maintaining our intermediate term trend reading as up on all indices except the DJIA, We stress the importance of watching the recent support lows on the other indices for potential trend reversal. Also watch for the same potential break of support on individual stocks. In our watch list most stocks declined. Today’s Action Moving Up: USO, DRYS, MA Moving Down: FSLR, BIDU, POT, X, AAPL, MOS, CF, DECK, RIMM, MON, CLF, AGU, GS, NUE, PCLN, STRA, UAUA, SOHU, LEH, AMZN, CNX, CELG, NKE, MS, V, IPI, SCHN, BTU, IBM, FWLT, GRMN, MER, MTL Intermediate Term Market Trend: Up Short Term Market Trend: Down

Oil Hits Another Record High, Indices Fall From 200 DMA

DJIA - 199.68, -1.53% SP500 - 13.23, -0.93% NASDAQ Comp. - 23.83, -0.95% Russell 2000 - 2.60, -0.35% Oil closed at a new high of $129.07. The DJ Transportation Average closed down 0.79%. The bearish candle patterns on the chart yesterday followed through with a significant pull back in the DJIA, S&P and Nasdaq Composite on Tuesday. A late rally in the Russell actually resulted in a smaller down move on Tuesday than Monday’s 0.37% drop. All four broad indices closed well below their 200 DMA. The move down was broad with 392 stocks in the S&P 500 and 74 stocks in the Nasdaq 100 moving lower. On the NYSE decliners 2,031 lead advancers 1,114 and on the Nasdaq decliners led advancers 1,749 to 1,139. The previous low point in the indices was on May 9. That is the support low and a break below could represent a change in the intermediate term trend. A break below the 12,700 level (May 9) on the DJIA would be a double top confirmation with a price target below 12,300 on the Dow. While a conclusion of a trend change is still premature we want to be aware of where these key reversal levels are on the chart. Agriculture related, steels, coal, utility and select technology stocks moved higher. Many technology, transportation and financial stocks moved lower. This may be nothing more than an attractive bull flag support pullback opportunity and we do need to stay focused on key support levels just like we have been watching the potential resistance at the 200 DMA. Today’s Action Moving Up: POT, X, CLF, AGU, FSLR, MOS, CF, MON, PCLN, AAPL, SCHN, CNX MEE, BIDU, RIMM, FWLT, XLE, XLU Moving Down: DRYS, MA, GS, AMZN, BRCM, NUE, DECK, MER, MS, IBM, SOHU, CELG, XLF Intermediate Term Market Trend: Up Short Term Market Trend: Down

Futures Lower, PPI Rises

Futures are lower in pre-market trading following yesterday's late selloff. April PPI rises 0.2% against estimate of 0.4% rise. The Core PPI which excludes food and energy prices rose 0.4% against an estimate of a 0.2% rise

Markets Pullback at 200 DMA, Oil Hits New High

DJIA + 41.36, +0.32% SP500 + 1.28, +0.09% NASDAQ Comp. - 12.76, -0.50% Russell 2000 - 2.72, -0.37% Oil closed at a record $127.05 The 200 DMA proved to be a resistance area where sellers appeared. Monday’s action was up until about 1:30 ET when markets peaked and moved lower. The DJIA and S&P finished higher with the DJIA closing above its 200 DMA and the S&P closing a point below its 200 DMA. The Nasdaq which was the weakest of the indices closed right at its 200 DMA. The Russell closed below 10 points below did not penetrate its 200 DMA although it did get within a ½ point during the trading session. The DJ Transportation index closed up 0.49% also formed a shooting star. Airline stocks are in a downtrend and rail stocks are in a strong up trend pushing this index higher. The DJIA closed looking like a potential double top, with a shooting star candle and a bearish divergence in the MACD. The S&P which made a higher high on Monday, also had a shooting star candle and bearish divergence in the MACD. The Nasdaq also made a higher high and formed a non-idealized shooting star and a bearish divergence in the MACD. The Russell 2000 also made a higher high with a shooting star but did NOT form a bearish divergence in the MACD. Watch closely on Tuesday for lower highs and lower lows in the indices. If this occurs the markets are likely in a short term pullback similar to the peak reached two weeks ago. At this point the technical evidence indicates that this pullback if it appears is a counter trend move. Trade accordingly. Many individual stocks that closed up also showed similar characteristics as the indices with potential double tops/higher highs, a bearish candle pattern and bearish divergences in the MACD. So watch for potential short-term pullbacks in these stocks on Tuesday. AMZN moved higher on an analyst upgrade. MTL is scheduled to split. Monday’s Action Moving Up: BIDU, AMZN, AA, BA, CVX, V, XLE, XLU Moving Down: FSLR, DRYS, POT, MOS, CF, AGU, MON, X, PCLN, DECK, STRA, UAUA, CELG, BRCM, RIMM, CLF, MEE, CNX, BTU, MA, GRMN, SOHU Intermediate Term Market Trend: Up Short Term Market Trend: Up

First Hour - Stocks on the Move

Stocks that are on the move after the first hour of trading: UP: BIDU, MTL, AMZN, DRYS, X, RIMM, CLF, MEE, V, BTU, POT, MA, SCHN, NUE, JASO, BRCM DOWN: FSLR, GRMN, STRA, SOHU The DJIA, S&P, Nasdaq Composite are all positive and trading above their respective 200 DMA. The Russell is barely positive at this moment and still trading below its 200 DMA.

Dow Breaches 200 DMA

Less than 45 minutes into Monday's session, the DJIA breaches its 200 DMA. The S&P continues to trade above its 200 DMA. We'll continue to watch today's trading to see if these indices close above this pivotal resistance level.

S&P Breaches 200 DMA

Minutes into Monday's trading session, the S&P broke through its 200 DMA. This is the first time the S&P has been above its 200 DMA since December. Obviously, a breach of the 200 DMA doesn't mean it will stay above the 200 DMA but this is a key first step. The DJIA is still about 6 points below its 200 DMA at this moment.

Stocks on the Move

Stock Moving Up Early Monday: AMZN, BIDU, DRYS, MTL, MEE, POT, JASO, RIMM, X Stock Moving Down Early Monday: PCLN, GRMN, GS, STRA, MA, DECK, SOHU, CF Dave's Insight: Stay focused on the trend and support and resistance to determine when price fluctuation respresents an entry or exit opportunity.

Stocks to Watch on Monday

Stocks to Watch on Monday: CELG, SCHN, ESRX, MA Index futures are flat from Friday's close just before the open on Monday. Watch the price action around the 200 DMA during Monday's trading session.

Markets Rally From Friday's Lows, End Near 200 DMA

DJIA - 5.86, -0.05% SP500 + 1.78, +0.13% NASDAQ Comp. - 4.88, -0.19% Russell 2000 - 2.21, -0.30% The broad indices recovered from the their intra-day lows on Friday to close near unchanged. The DJIA, Nasdaq Composite and Russell were down slightly, while the S&P closed up slightly for the day. The DJIA, S&P and Russell closed just below their respective 200 DMA and the Nasdaq Composite closed above its 200 DMA. The pause we are seeing here at the 200 DMA is typical as this represents a significant resistance/support area for the longer term trend. Successful breakouts of the 200 DMA will further strengthen the current uptrend that has been in place since the mid-March low. We maintain our current uptrend status. Intermediate Term Market Trend: Up Short Term Market Trend: Up

Indices Continue Pullback

Oil, solar and coal, shipping, steel stocks are moving higher this morning with tech, financials and most other sectors moving lower. As long as these pullbacks stay above support consider these movements price fluctuation as opposed to change in trend. This extra volatility on options expiration Friday should have been expected as we stated in our post earlier in the week. FXE is bouncing off support this morning into its 30 DMA. Moving Up: FSLR, JASO, CNX, MEE, BTU, X, STLD, DRYS, CVX

Expiration Friday, Indices Pause at 200 DMA

Today is options expiration Friday for May contracts. After strong move up in the broad indices on Thursday, the indices are pausing at their respective 200 DMA with modest pullbacks in the first hour of trading. Take a look at the charts of the DJIA, SPX, COMPQ, NDX, RUT and SOX to see the pause at the 200 DMA in each of these indices. This is typical to find selling resistance at the 200 DMA after after a market has strong down trend like the down trend from October to January. Looking at the chart in detail, this pause appears more probable to be a temporary pause than a reversal point. Dave's Insight: Rember to trade the market, not your thoughts. Early Friday Action Moving Up: MTL, CNX, X, DRYS, FSLR, POT, MEE, CELG, IPI, CLF, GRMN, CF Moving Down: MA, STRA, DECK, PCLN, GS, AAPL, LEH, SOHU, EBAY Dave's Insight: When an stock is in an uptrend and is listed as Moving Down, watch for a potential support bounce entry.

Markets Rally, Nasdaq Closes Above 200 DMA

DJIA + 94.28, +0.73% SP500 + 14.91, +1.06% NASDAQ Comp. + 37.03, +1.48% Russell 2000 + 7.31, +0.99% Support bounces and breakouts were in abundance today as indices and stocks moved higher after pulling back moderately yesterday. The DJIA, S&P and Russell 2000 finished at their 200 DMA while the Nasdaq and many individual stocks were breaking through their respective 200 DMA. This is a significant intermediate breakout with price targets that could put the indices near last year’s highs. More will follow on these price targets tomorrow. On the NYSE advancers led decliners 2,195 to 934 with 51 52 week highs and on 7 new lows. On the Nasdaq advancers led decliners 1,763 to 1,136 while ther were 28 52 week highs and 22 52 week lows.. Today’s Action Moving Up DRYS, CLF, POT, MTL, X, FWLT, MOS, SOHU, CNX, AAPL, MEE, BIDU, LEH, CF, GRMN, AGU, STRA, RIMM, AMZN, NUE, DECK, SCHN, MER, MON, IBM, MS, EBAY Moving Down CELG, GS, FSLR, IPI, ESRX Intermediate Term Market Trend: Up Short Term Market Trend: Up

Markets Rise and Pullback From Highs

DJIA + 66.20, +0.52% SP500 + 5.62, +0.40% NASDAQ Comp. + 1.58, +0.06% Russell 2000 - 0.78, -0.11% Today’s price action was almost a picture perfect inverse of Tuesday’s price action. Look at Wednesday’s candle compared with Tuesday’s on all four indices. Wednesday’s candle has an upper shadow while Tuesday’s candle has a lower shadow, both very similar in size. Also on Tuesday the Nasdaq and Russell 2000 were stronger with the DJIA and S&P weaker. It was the opposite on Wednesday with the Nasdaq and Russell weaker and the Dow and S&P were stronger. That being said all four indices had a higher low and higher high today. Obviously with the S&P, Nasdaq and Russell closing near the low end of their daily range and the DJIA closing just below today’s mid-point, we could be seeing the beginning of a short-term pullback. We’ll wait to see if markets hold and bounce in the morning or begin to move lower. Also remember Friday is options expiration and often we see extra price volatility without a change in trend. Our trend rating is still up. Today’s Action Moving Up STRA, FSLR, MON, NKE, POT, GRMN, IBM, DRYS Moving Down BIDU, MTL, AAPL, CNX, CLF, MA, RIMM, DECK, MEE, SCHN, SOHU, X, NUE, PCLN, FWLT, CF Intermediate Term Market Trend: Up Short Term Market Trend: Up

Stocks to Watch

Breakouts occurred in CNX, FWLT on Tuesday Stocks nearing potential breakouts on Wednesday morning: FSLR, DECK, ESRX, BRCM Support bounce potential: JASO Futures are higher before the market open. The trend is up. Dave's Insight: Remember to trade the market, not your thoughts.

Markets Rally From Short Term Support Levels

DJIA - 44.43, -0.34% SP500 - 0.54, -0.04% NASDAQ Comp. + 6.63, +0.27% Russell 2000 + 3.62, +0.49% The broad indices pulled back in early trading and then rallied with the Nasdaq Composite and Russell 2000 closing up, the S&P flat and the DJIA down slightly. There were several big movers in our stock list that we post on from day to day. All four indices had large white candles on Monday and each of the bounced near the S1 short term support level. The DJIA bounced near the mid-section of Monday’s large white candle and closed at its 20 DMA. There was a higher low and a lower high today resulting in an inside day. The S&P bounced today off both the mid-section of Monday’s large white candle and the old horizontal resistance (new support) from late January, early February through late April. Today’s candle formed both a higher low and a higher high. The Nasdaq Composite also bounced off the mid-section of Monday’s large white candle. Today’s candle formed a higher low and higher high and a new high close. This is the highest close in the Nasdaq since January 7. Today’s candle could be viewed as a potential hanging man (short-term bearish formation). If a pullback does occur it likely will be a short-term counter trend move. Dave’s Insight: Candles are one piece of technical information and should be interpreted in context of all the technical information on the chart. The Russell 2000 index was the strongest of the four broad indices on Tuesday. Its early morning pullback stayed well above the mid-section of Monday’s large white candle. Today’s candle was also a higher low and higher high and a new high close. The RUT closed above its January February resistance for the second straight day. Today’s close is the highest close since January 3. I’ll be sharing some price targets on these indices starting tomorrow so stay tuned to Chart Signals for even greater insight. I have been commenting in my advanced technical analysis audio commentary for the past three years and again last night to a separate audio audience on the importance of the PHLX Semiconductor Index (SOX) price action to the Nasdaq price action. Here is the bottom line. Since technology has chips inside, the strength or weakness of “chip” stocks has a significant influence of any sustainable trend in the Nasdaq index. The SOX was up 3.19 points or +0.79% today, more than the four broad indices. This was a higher low and higher high and a new high close. Also this is the highest close since December 31. In fact today’s close was just 1.73 points below the December 31, 2007 close. In other words the SOX could go positive year to date as early as tomorrow if it moves just 2 points! This suggests a probable continuation of the recent uptrend in the Nasdaq. Moving Up: FSLR, FWLT, CLF, CNX, SCHN, AAPL, X, JASO, MEE, DRYS, BIDU, IBM, DECK, ESRX, BRCM, PCLN Moving Down: POT, CF, GS, MOS, LEH, STRA, MA, MON, IPI, CELG, RIMM, MS, MER Intermediate Term Market Trend: Up Short Term Market Trend: Up

Markets Pause While Some Stocks Continue to Move

After a strong support bounce on Monday major indices are pausing on Tuesday morning. The DJIA is down -0.49%, the S&P -0.13%, the Nasdaq Composite -0.14% and the Russell 2000 is up +0.03%. Many individual stocks are continuing to move up: FSLR, FWLT, CNX, SCHN, AAPL, DRYS, MEE, DECK, BIDU, X, JASO, IBM and V. Stocks moving lower Tuesday morning include: POT, MTL, MON, MOS, RIMM, GS, LEH, CF, CELG, MA, MS and SOHU. Tuesday's price action appears to be typical price fluctuation and represents no change in our trend readings. Dave's Insight: Follow your rules when trading. Buy when you are supposed to buy and sell when you are supposed to sell.

Now That's a Support Bounce!

DJIA + 130.43, +1.02% SP500 + 15.30, +1.10% NASDAQ Comp. + 42.97, +1.76% Russell 2000 + 13.18, +1.83% Stocks and indices rallied on Monday. In classic fashion, indices retreated last week from a higher high to a higher low on Friday. After a moderate opening, indices found support in the area of horizontal and MA support on the charts and bounced. Many stocks and indices closed near their highs for the day. The DJIA, SPX, Nasdaq Composite and RUT all moved higher today and produced classic support bounce entry points. The DJIA, SPX and Nasdaq Composite each bounced off support in a broad rally. This confirms the recent breakout and suggests the markets have the potential for a significant run over the next few weeks. The RUT rose to resistance and closed with a new high close today. DIA, SPY, QQQQ and IWM each had a nice bullish candle formation and gave bullish entry signals. Moving Up BIDU, RIMM, SOHU, DECK, AAPL, DRYS, GS, MA, STRA, NUE, POT, CF, MTL AMZN, MON, MS SCHN, LEH, IBM, EBAY, GRMN X, CLF, MER, AA,CAT, DD, IBM Moving Down JASO, V, CELG, HPQ Intermediate Term Market Trend: Up Short Term Market Trend: Up

Support Bounce Starts 50 Minutes in Today's Trading

About 50 minutes into this morning's trading markets started to bounce. It appears that Friday's support levels are holding and the bounce is happening. The Russell and the Nasdaq are the strongest at this point (just before 11 am ET) followed by the Dow and S&P. BIDU, RIMM, DECK and SOHU are moving big. MA found support and is now moving higher. V is still down for the day. AAPL, AMZN, NUE, MTL, PCLN IBM and GS are moving higher. MON, MOS and POT have turned positive for the day, while AGU and IPI are bouncing off their early morning lows.

Monday's Early Action

Indices are slightly above or near breakeven in the first 30 minutes of trading. Credit card stocks MA and V along with agri/fertilizer/chemical stocks AGU, POT, MOS, IPI and MON are down in early trading. RIMM, DECK, BIDU and SOHU are moving up. Dave's Insight: Watch for a break above the high of the low day on support bounce charts.

Stocks to Watch for Monday

On the DJIA and Russell 2000 buying occurred on Friday near the 30 DMA. On the S&P the buying occurred near the 20 DMA and on the Nasdaq the buying occurred above the 20 DMA. Watch for sustained buying and a potential support bounce going into the new week on Monday. These stocks had chart patterns worth watching on Monday: Potential Breakouts FWLT, NOV, NVDA, CNX Potential Support Bounces BIDU, ESI, JASO, MA, MICC, NUE, V A change in my travel schedule interfered with posting this sooner.

Markets at Pullback to Support?

DJIA - 120.90, -0.94% SP500 - 9.40, -0.67% NASDAQ Comp. - 5.72, -0.23% Russell 2000 + 0.50, +0.07% The DJIA, S&P and Nasdaq indices fell today closing below recent support on the DJIA and S&P. The Nasdaq remained above support. Also notice that the Nasdaq closed down today but was up from the open and therefore today was a white candle. The Russell 2000 rose slightly and also displayed a white candle today. Take a look at the charts and notice where each index is at relative to horizontal support/resistance and the 30 DMA. The market is clearly testing the recent breakout and showing some signs of being at support. Stay focused on this key support area and watch for a bounce or break. Look for additional comments before Monday morning. Earnings FLR – 5/12 Today’s Action At Support Still ESRX Moving Up PCLN, FSLR, JASO, BUCY Moving Down ATW, V, MTL, FLR, BIDU, MA, V, NUE, CLF, X, AAPL, MON, DECK, SCHN, POT, IBM Intermediate Term Market Trend: Up Short Term Market Trend: Down

Indices Falling - Threatening Recent Support Levels

Entering the last hour of trading today, the DJIA and the S&P are falling below new horizontal support or the old horizontal resistance on the charts. Only the Nasdaq is holding above horizontal support at this moment. All four indices are still above their respective 30 DMA. Watch closely this key pivot point and trade accordingly. PCLN up $17 after positive earnings. FSLR and JASO rising. Yesterday evening I was flying east and no way to post. I will update after the close.

DJIA and Nasdaq Hold Above Support, S&P Moves Below

DJIA - 206.48, -1.59% SP500 - 25.69, -1.81% NASDAQ Comp. - 44.82, -1.80% Russell 2000 - 13.58, -1.86% All four major indices pulled back sharply today. The DJIA retests its breakout and holds. The S&P falls below support in the first test of its breakout. The Nasdaq holds above support in its first test of the resistance breakout. The Russell 2000 bounces down from resistance again. Watch the price action in context of the S1, S2 and S3 levels of last Thursday’s large white candle on each index. Reversing Tuesday’s positive price action, most of the stocks in our watchlist moved lower today. Many with short-term reversal candlestick patterns. Earnings ATW – 5/9 FLR – 5/12 Today’s Action Bearish Engulfing in Uptrend BUCY, GILD At Support Still ESRX Moving Up IBM, V, MTL Moving Down FLR, ICE, BIDU, STRA, SOHU, GS, DECK, MA, PCLN, AAPL, CF, MER, MOS, LEH, CELG, AMZN, MON, CNX, MS, JASO, FSLR, MEE, CLF, FWLT, EBAY, GRMN, X Intermediate Term Market Trend: Up Short Term Market Trend: Down

Markets Rally on Tuesday

DJIA + 51.29, +0.40% SP500 + 10.77, +0.77% NASDAQ Comp. + 19.19, +0.78% Russell 2000 + 5.44, +0.75% The Nasdaq index led the way as markets rallied today. Trading below Friday’s intraday high, the Nasdaq, S&P and Russell 2000 each had new high closes today. Only the Dow lagged and failed to make a new high close. We left our trend ratings at Up on Monday, as the pullbacks appeared to be price fluctuations and not a change in short-term trend. That view seems to be validated by today’s price action. Most of the stocks we watch rose today and only one moved down significantly which is indicating market strength in many individual stocks in addition to the market indices. The Chart Signals seem to be suggesting that the recent breakout is for real.

PCP rose 8.20 on positive earnings today. Today’s Action Breakout Holding BUCY, GILD, ICE At Support Still ESRX Support Bounce Follow Through FLR Moving Up FSLR, CLF, MA, POT, STRA, CF, SCHN, SOHU, CNX, AGU, DECK, MOS, V, NUE, JASO, AAPL, X, MON, FWLT, GRMN, IPI, MEE, MTL Moving Down BIDU Intermediate Term Market Trend: Up Short Term Market Trend: Up

Markets Modest Pullback

DJIA - 88.66, - 0.68% SP500 - 6.41, - 0.45% NASDAQ Comp. - 12.87, - 0.52% Russell 2000 - 1.39, - 0.19% The DJIA, S&P and Nasdaq pulled back today and stayed well above new support. The Russell which is just below resistance had the smallest pullback today. Watch the S1 level on Friday’s large white candle for a potential shift in the short term trend. POT, IPI and MON had nice support bounces today. MOS had a modest support bounce. Earnings PCP – 5/6 ATW – 5/9 FLR – 5/12 Today’s Action Breakout BUCY, GILD, ICE At Support ESRX Support Bounce FLR

Moving Up BIDU, X, CLF, POT, MA, MTL, CNX, MEE, AAPL, IPI, MON, NUE, V, SCHN, FWLT, AGU, CELG Moving Down FSLR, GS, DECK, SOHU, MS, AMZN, LEH, IBM, MER, UAUA Intermediate Term Market Trend: Up Short Term Market Trend: Up

Dow and S&P Rise After Jobs Report

DJIA + 48.87, +0.37% SP500 + 4.56, +0.32% NASDAQ Comp. - 3.72, -0.15% Russell 2000 - 4.01, -0.55% The jobs reports showed a loss of 20,000 jobs in April compared with an estimated loss of 80,000 jobs. Unemployment fell to 5.0% in April from 5.1% in March compared with an estimate of 5.2%. Both reports were better than expected. Oil rose to $116.32 a barrel. The DJIA, S&P and Nasdaq sold off from the their early morning highs and finished well above both their respective breakout points (now support) and above the S1 support of Thursday’s large white candle. The Russell 2000 bounced down from resistance and stayed above the S1 support of Thursday’s large white candle. We have changed our intermediate term trend reading to up. Support bounces occurred in AGU, MOS and POT today. Today’s Action Moving Up FSLR, MTL, X, AGU, CNX, POT, CLF, CF, SOHU, MOS, MEE, MON, SCHN, GS, AAPL Moving Down MA, BIDU, STRA, V, AMZN PCLN, ESRX, DECK, FWLT Intermediate Term Market Trend: Up Short Term Market Trend: Up

Breakout - A 13,750 DJIA Target?

DJIA + 189.87, +1.48% SP500 + 23.75, +1.71% NASDAQ Comp. + 67.91, +2.81% Russell 2000 + 13.57, +1.89% Like April, May begins with a bang! The Nasdaq moves a monster 2.81%. Friday will show us if this breakout is for real as it appears to be. Unemployment and non-farm payrolls are due before the market open. If this breakout holds the chart is giving a target of 13,750 on the DJIA. There is a great market lesson in today’s move. One of the core principles of technical analysis is that market action discounts everything. We have been writing and commenting in our audio comments that the price action at resistance over the past 8 days has been different than in the prior three months. Why? Apparently buyers were absorbing selling at higher prices for more days than anytime in the last three months. Were the clues in the Chart Signals? Yes. Did the chart know the future? No. But did the chart suggest that buyers were doing something different now and therefore a trend change was becoming a higher probability? Yes. Dave’s Insight: We must never confuse probability with certainty. Always think in terms of probability and maintain mental flexibility. Today’s Action Moving Up AAPL, ADBE, APOL, LAMR, MICC, SNDK, SYMC, VRTX, MA, STRA, GS, SOHU, DECK, BIDU, IBM LEH, MER, GRMN, V, CELG, UAUA, ESRX, NKE, BRCM Moving Down FSLR, MTL, CLF, IPI, X, NUE, CF, SCHN, JASO, MEE, POT, CNX, AGU, MON Intermediate Term Market Trend: Neutral to Breaking Out Today Short Term Market Trend: Up

The Trend Change the Chart Signals Have Been Suggesting?

Just stepped off the plane on the east coast just in time to see our support bounce (DJIA & Nasdaq) and a DJIA move to the 200 DMA. The S&P is breaking resistance and the Russell 2000 has moved right to its resistance level. The market is not closed and the non-farm payrolls and unemployment reports will be out in the morning, but this does look like the breakout and trend change the Chart Signals have been suggesting for the past several days. If the market closes up our short-term trend reading will be up and if the market continues to move up tomorrow we will likely change our intermediate term reading to up also. There is still a chance that the market will pull back today or tomorrow, but at this moment this is looking like the potnetial trend change we have been discussing for several days. I'll post later after I get my room and I can review all the Chart Signals. UP Before the Close MA, STRA, GS, SOHU, AAPL, DECK, BIDU, MER, IBM, LEH, GRMN, MS, V, UAUA, CELG, NKE