GDP Falls, Jobles Claims Rise, Oil and Stocks Fall

DJIA - 205.67, -1.78% SP500 - 16.88, -1.31% NASDAQ Comp. - 4.17, -0.18% Russell 2000 - 4.34, -0.60% Advancers & Decliners NYSE 1,210 1,914 NASD 1,353 1,551 Oil $124.08 - $2.69 Gold $922.70 + $10.40 The DJIA and the SPX were the down the most on Thursday. The Nasdaq spent much of the day in positive territory before closing down for the day. Oil fell again today finishing the month of July with the biggest monthly drop ever, falling $15.92. Just the opposite of yesterday when oil rose and stock rose also, today stocks fell as oil fell. This was in large measure in response to the Jobless Claims report which came in at 448,000 higher than the 398,000 estimate and the second quarter GDP which came in at 1.9% below the estimate of 2.4%. Index Commentary The DJIA after two large white candles formed a bearish engulfing pattern and closed below its 30 DMA and above its 20 DMA The SPX, after two large shaven head white candles, formed a bearish harami while closing below or its 30 DMA The Nasdaq formed a shooting star while closing above its 30 DMA for the third day in a row…sellers did come in at the horizontal resistance in the area of 2,350 as we posted for you to watch for on Wednesday The RUT confirmed its hanging man candle on Wednesday with a doji…closed above its 50 DMA for the third day in a row…sellers appearedin the 721 area below the 200 DMA Earnings Watch Wednesday AMC/ Thursday BMO Earnings Moving Up: ESRX, PRU, AZN, MRO, Wednesday AMC/ Thursday BMO Earnings Moving Down: AKAM, CLF, LVS, OII, OI, DIS, APA, CNX, EK, XOM, GG, MA, PTEN, Thursday AMC Earnings Moving Up: Thursday AMC Earnings Moving Down: MEE, Stock Commentary MA gapped lower and finished the day down. CNX gapped lower and then fell to horizonizontal support at 75 area. POT reversed Wednesday's gain with a bearish engulfing pattern CLF formed a bearish harami in the area of horizontal resistance X held horizontal to Tuesday's earning gap BUCY broke the low of the high day and stayed above the 50 DMA. V formed an evening star MOS formed an bearish harami at the area of a lower high PCLN broke out above its horizontal resistance and its 30 and 200 DMA's...chart target is 132. ESRX bounced on its earnings news closing above ist 20, 30, 50 and 200 DMA Thursday’s Action Moving Up: PCLN, ESRX, RIMM, NIHD, CELG, MS Moving Down: MA, CNX, POT, CLF, X, BUCY, V, MOS, MEE, MON, ARN, AGU, BTU, IPI, CF, BIDU, NUE, STRA, FWLT, GS, USO, AMZN, DECK, SOHU, SCHN, AAPL, JASO, LEH, IBM Intermediate Term Market Trend: Neutral Short Term Market Trend: Up

GDP and Jobless Claims Disappoint

GDP report 1.9% below estimates of 2.4%... Jobless claims 444,000 above estimates of 398,000... Stock futures are down in pre-market trading in reaction...Oil futures up just a few cents around 126.80... Pre-Market Trading of Stocks reporting earnings BMO: AET, APA, AZN, ABX, GG, MRO, MSTR moving up...CNX -9.63, XOM -2.08, MA -16.35

Oil Up, Stocks Up...What's This?

DJIA + 186.13, +1.63% SP500 + 21.06, +1.67% NASDAQ Comp. + 10.10, +0.44% Russell 2000 + 4.31, +0.60% Advancers & Decliners NYSE 2,098 1,043 NASD 1,591 1,246 Oil closed at $126.77 up $4.58 During the past two week the RUT and Nasdaq have been the relatively stronger indices while the DJIA and SPX have been weaker. That was reversed today as the DJIA and SPX had large gains while the RUT and Nasdaq lagged the larger indices today. Oil was higher on Wednesday due to a government report that domestic gasoline supplies were lower last week than the week before. News from the middle east that the Israeli Prime Minister would not run again increased speculation that could increase tensions with Iran. Dow stock CVX rose 4.42 helping to drive the DJIA higher. Metals and Mining stocks rose and XME rose +4.8%. Coals sectors stocks and steel stocks also rose. Ag-related stocks moved higher: POT, CF, MOS, and AGU. Financial stocks rose as a series of developments including the SEC extending the ban on naked short selling of 19 primary dealers including FNM and FRE until August 12.

Index Commentary The DJIA had a large white shaven head candle which closed above its 30 DMA…watch the horizontal resistance from July 23 in the 11,700 area The SPX had a large white shaven head candle which closed above its 30 DMA…watch the horizontal resistance from July 23 in the 1,290 area The Nasdaq formed a doji-like candle while closing above its 30 DMA for the second day in a row…watch horizontal resistance in the area of 2,350 from July 23 The RUT formed a hanging man candle with a small upper shadow…closed above its 50 DMA for the second day in a row…horizontal resistance is in the area of 727 which is also where the current level of the 200 DMA Earnings Watch Tuesday AMC/ Wednesday BMO Earnings Moving Up: CEPH, XRAY, FISV, FMC, LRCX, LNC, AVP, CAM, CMCSA, HES, NBL, SLAB

Tuesday AMC/ Wednesday BMO Earnings Moving Down: ERTS, MET, OSG, AGN, GLW, ENR, GRMN, MCO Wednesday AMC Earnings Moving Up: ESRX, FSLR, MUR, OI, PRU, SBUX, V Wednesday AMC Earnings Moving Down: AKAM, LVS, OII After-hours: AKAM -5.30, -16.96%, FSLR +19.50, +6.84%, OII -6.62, -9.79%, OI +3.44, +7.16% Stock Commentary CF continued support bounce of last 3 days nearing horizontal resistance of 170 MA suport bounce above 30 DMA...earnings 7/31 FSLR continued support bounce of last 3 days...horizontal resistance at 290 MEE broke through 20 and 50 DMA moved to 30 DMA CNX bullish engulfing pattern...earnings 7/31 Wednesday’s Action Moving Up: CF, POT, CLF, MOS, MA, MON, FSLR, CNX, ANR, AGU, MEE, IPI, STRA, BTU, GS, USO, BUCY, SCHN, DRYS, RIMM, FWLT, AAPL, V, MTL, BIDU, MS, ESRX, LEH, IBM, X, PCLN, NUE, MER Moving Down: GRMN, DECK, NIHD Intermediate Term Market Trend: Neutral Short Term Market Trend: Up

Pre-Market Futures: DJIA +68...S&P +7...Nasdaq +15...Russell +5 Earnings BMO Pre-Market trading: AVP +3%...CAM +3%...CMCSA +3%...GRMN -13%...HES - 2%...MCO +2%...SLAB + 7% Futures are trading higher this morning continuing yesterday's rally. Markets appear to have made a higher low on Monday which now means there is a higher high and higher low on the charts. Of course a higher high and higher low belong with an uptrend so we may be at a key turning point in the makret. Earnings, financial stocks earnings and oil prices are still the drivers in this market. If markets do pull back today watch the S1 level of Tuesday's large white candle. We'll be back later...

Break Above R1, R2, R3 Short Term Resistance - Oil Falls Again

DJIA + 266.41, +2.39% SP500 + 28.83, +2.34% NASDAQ Comp. + 55.40, +2.45% Russell 2000 + 18.44, +2.65% Advancers & Decliners NYSE 2,469 688 NASD 2,050 860 Oil closed at $122.19 down $2.54 Consumer confidence rose to 51.9 in the month of July from a revised June report of 51. This was a better than expected reading as Economists had estimated a reading of 50. Just over a week ago, in our Friday/weekend commentary we discussed how the drop in oil prices coming from signs that demand was slowing due to economic slow down was a major factor if the rally, that was then three days old, were to continue…well here we are 10 days into this rally and again a major market move occurs when oil moves down another 2%. As it has happened during the past two weeks, short-term news about threatening weather or concerns in the Middle East can cause price fluctuation in oil to the up side short-term, however stay focused on the trend that is being caused by a larger macro-economic factor as the primary driver as the time. Each of the indices formed higher lows on Monday, and Tuesday closed above the high of the low day as each index gained more on Tuesday than it lost on Monday. This could be the W bottom with a higher low we have been discussing for the past two weeks. These are support bounce patterns that are conceptually equivalent to bull flags. Be alert to the possibility that this could be a trend reversal point as you review your charts. Don’t let the down trend of the past two months blind you to this possibility…look at all the technical evidence, not just the past trend and then make your decision. Since each of these indices closed above the high of the low day, watch the S1 levels of Tuesday’s candle if a pullback occurs. Index Commentary The DJIA regained Monday’s loss and more as it formed a bullish engulfing pattern and closed above it 20 DMA…Monday is the low day and Tuesday closed above the high of the low day…Monday was a 61.8% Fibonacci retracement level…watch for a break above the 30 DMA. The SPX closed above the high of the low day and formed a large white shaven head candle…broke through R1 and R2/R3 of Monday’s candle…Monday’s low was a 61.8% Fibonacci retracement…watch for a break of the 30 DMA. The Nasdaq bounced off its 20 DMA and closed above it 30 DMA with a large white shaven head candle…Monday’s low was above last Tuesday’s gap low that was caused by AAPL’s gap lower Tuesday morning and was a 50% Fibonacci retracement…Tuesday’s close was just above Monday’s high. The RUT the strongest of the broad indices bounced off its 30 DMA closed above the high of the low day (Monday) forming a large white candle that broke through Monday’s R1 and R2/R3 levels…Monday’s low was a 38.2% Fibonacci retracement…closed above its 50 DMA…we would like to say the RUT is in an intermediate term up trend and once again we will give it one more day to confirm the 50 DMA breakout. The SOX formed a bullish engulfing pattern on a lower low with a bullish divergence in the 2-line MACD and Stochastic…this support bounce is in the area of horizontal support from January to March…a stronger SOX gives strength to a Nasdaq rally. Earnings Watch Monday AMC/ Tuesday BMO Earnings Moving Up: AMGN, CF, HIG, WLT, ANR, GM, NOV, SAP, X Monday AMC/ Tuesday BMO Earnings Moving Down: OMI, NOC, TEVA Tuesday AMC Earnings Moving Up: FMC, Tuesday AMC Earnings Moving Down: LNC, MET, After-hours: MET -5.19 or -9.83% Stock Commentary X BMO strong earnings gaps stock over the 20 DMA, through the 30 DMA and to the 50 DMA BIDU broke through horizontal resistance at 344, chart target of 413…time target 2 to 4 weeks MA formed a bullish harami in the area of horizontal support V broke through its 20 DMA as it formed a large white shaven head candle DECK closed near Monday’s high as it formed an outside day AAPL formed a bullish harami RIMM formed a bullish harami in a horizontal flag BRCM formed a morning star pattern JASO formed a bullish engulfing pattern XLF bounced in a bull flag...breaking through its 30 DMA Tuesday’s Action Moving Up: X, BIDU, FSLR, GS, MA, ANR, CF, STRA, V, CLF, POT, DECK, SCHN, MEE, AAPL, RIMM, IPI, AMZN, NUE, MER,JASO, BUCY, LEH, MS, UAUA, FWLT, IBM, PCLN, MON, BRCM, EXPE, BAM, NIHD, EBAY, DRYS Moving Down: USO, SOHU, GRMN, MTL, CNX Intermediate Term Market Trend: Down Short Term Market Trend: Up

Stocks Rise as Oil Falls Again

1:47 ET DJIA + 203, SPX +21, Nasdaq +50, RUT +18, Oil -2.93 Oil prices continue their down trend after yesterday’s fluctuation. Remember the price is trending down for bigger reasons than it is fluctuating up on certain days. Financial, homebuilders and retail stocks are moving after Monday’s drop. Is this the higher low we have been looking for? The market has support bounces galore and it breaking through short-term resistance levels. The DJIA is through Monday’s R1 and its 20 DMA, close to R2/R3. The SPX is through Monday’s R1 and at its 20 DMA, close to R2/R3. The Nasdaq bounced off its 20 DMA, moved through its 30 DMA, Monday’s R1 and R2 and is near its R3. The RUT bounced off its 30 DMA and is through Monday’s R1 and R2/R3 short-term resistance. Tuesday’s Action Moving Up: X, MA, GS, ANR, BIDU, FSLR, DECK, AAPL, V, CF, SCHN, STRA, NUE, CLF, PCLN, AMZN, UAUA, FWLT, IBM, MEE, IPI, MS, RIMM, BRCM, EBAY, LEH, BAM Moving Down: SOHU, MOS, USO, CNX, MTL

Old Theme, New Week...Oil Up, Stocks Down

DJIA - 239.61, -2.11% SP500 - 23.39, -1.86% NASDAQ Comp. - 46.31, -2.00% Russell 2000 - 14.23, -2.00% Advancers & Decliners NYSE 861 2,286 NASD 740 2,140 Oil closed at $124.73 up $1.47 The combination of oil prices rising again with financial and housing stocks falling pulled the broader market lower. XLF fell 98 cents or -4.7% and XHB fell 87 cents or -5.12%. Among housing stocks CTX, HOV, MTH and RYL all had large percentage drops today. It was unlikely that this down trend would come to an end without some form of W bottom, double bottom or triple bottom occuring. If the down trend is about over traders should be looking for the next bottom whether it is a higher low, a double bottom or a lower low. In the meantime it is appropriate to be trading to the down side with the intermediate term trend. The bullish haramis on Friday's chart failed to confirm as sellers had enough of a break on Friday and sent today's market lower. Having broken below Thursday's low look for the indices to fall to the next support level. Index Commentary The DJIA after the pause on Friday broke through its 20 DMA with a large black candle.

The SPX broke the Thursday/Friday low support and fell below its 20 DMA.

The Nasdaq fell below its 20 DMA and its 2,275 horizontal support.

The RUT broke below Thursday's low of 700 and below its 20 DMA.

Stock Commentary AMGN was up over 12% after the company reported positive trial results on its osteoporosis drug candidate...reported better than expected earnings after the close and raised their revenue and earnings guidance for 2008. MER fell more than 10% to its low on July 15, a potential double bottom...formed three black crows pattern or three large black candles. AAPL's large black candle that came to the S1 level of the July 22 large white candle is being attributed to health concerns of CEO Steve Jobs. BUCY broke out of the resistance between its double bottom following a positive earnings report. NIHD pulled back to 52.70 on a bearish engulfing type candle, after three storn up days following earnings. Monday’s Action Moving Up: PCLN, FSLR, X, CLF, BUCY, BIDU, CF, USO, NUE, MOS, Moving Down: MA, AAPL, MTL, GS, SOHU, DECK, STRA, RIMM, POT, MER, NIHD, AMZN, IBM, IPI, ESRX, MS, LEH, DRYS, MON, BAM, V, CELG, GRMN, MEE, UAUA, EBAY Intermediate Term Market Trend: Down Short Term Market Trend: Down

1:53 ET DJIA -168, SPX -13, Nasdaq -28, RUT -10, SOX -4, Oil +41 cents Markets have been falling most of the day, with a small rally starting about 15 minutes ago . It appears very improbable that the bullish haramis on Friday will confirm today. Our question posed whether Friday was the beginning of a reversal or a pause that refreshes the sellers appears to have an answer...it was a pause as sellers have been in strong control today. The DJIA is below Thursday's low and its 20 DMA. The SPX is below Thursday's low and its 20 DMA. The Nasdaq is still above Thursday's low and its 20 DMA. The RUT is below Thursday's low and is at its 30 DMA and above its 20 DMA. Of course this is still intra-day action at this point and we will see if sellers are still in control by the endo of the day. It appears we are looking for a potential higher low at some point other than Thursday's low in at least three of the broad indices. Monday's Action Moving Up: PCLN, BIDU, FSLR, X, CLF, ANR, CF, BUCY, CNX, AGU, NUE, MOS, BTU Moving Down: MTL, AAPL, SOHU, MA, GS, STRA, NIGH, RIMM, MER, DECK DRYS, AMZN, IBM, POT, ESRX, MS, MON, LEH, BAM, CELG

10:33 ET DJIA -57, SPX -2, Nasdaq -7, RUT - 5, SOX -2, USO +0.12 Markets are down modestly in the first hour of trading, at this moment the indices are holding above the key short-term support levels we mentioned in Friday's post. Watch for confimation of bullish haramis today and whether the indices break short-term support or resistance. These levels hold the key for short-term traders. Monday's Early Action Moving Up: BIDU, PCLN, X, CLF, ANR, CNX, CF, NUE, BUCY, BTU, AGU, SINA, ME, SCHN, GRMN, FLWT, MOS, V, Moving Down: MTL, AAPL, AMZN, NIHD, DRUS, DECK MER, ESRX, SOHU, POT, RIMM

Earnings for the Week of July 28 to August 1

Earnings season continues on Monday, July 28 and this is another big week in earnings as you can tell from the partial list below. If you have short-term option positions it is critical to be aware of the ERD (Earnings Release Date) and whether earnings come BMO (Before Market Open) or AMC (After Market Close). Also if you trade the Straddle or Strangle Strategies over earnings, you will need to know the ERD. We offer this information as a reminder only. Since companies can and do make changes to their release date, we can’t guarantee its accuracy. So make any trade decisions only after you have checked your data sources to verify the actual date. Here are some of the notable stocks releasing earnings this week: Monday July 28 BOH BMO CNA BMO SOHU BMO VZ BMO AMGN AMC ATHR AMC CF AMC HIG AMC MOS AMC OMI AMC PCU AMC WLT AMC Tuesday, July 29 ANR BMO COH BMO GM BMO NOV BMO NOC BMO SAP BMO TEVA BMO X BMO CEPH AMC XRAY AMC ERTS AMC FISV AMC FMC AMC LRCX AMC LNC AMC MET AMC OSG AMC Wednesday, July 30 AGN BMO AVP BMO CAM BMO CMCSA BMO GLW BMO ENR BMO GRMN BMO HES BMO MCO BMO NBL BMO SLAB BMO AKAM AMC CLF AMC ESRX AMC FSLR AMC LVS AMC MUR AMC OII AMC OI AMC PRU AMC SBUX AMC SWN AMC DIS AMC Thursday, July 31 AET BMO APA BMO AZN BMO ABX BMO CRS BMO CNX BMO EK BMO XOM BMO GG BMO MRO BMO MA BMO MSTR BMO NMX BMO PTEN BMO TSM BMO CA AMC CTSH AMC KLAC AMC LDK AMC MEE AMC MNST AMC Friday, August 1 CVX BMO CI BMO NYX BMO JAVA BMO

Bullish Harami Friday...Will it Confirm on Monday?

DJIA + 21.41, +0.19% SP500 + 5.22, +0.42% NASDAQ Comp. + 30.42, +1.33% Russell 2000 + 7.96, +1.13% Advancers & Decliners NYSE 1,761 1,339 NASD 1,760 1,111 Oil closed at $123.26 down $2.23 We have maintained our intermediate term trend down status during the past week and a half because the DJIA, SPX and Nasdaq each are still below their 30 and 50 DMA. Only the RUT is currently above its 30 DMA. The RUT closed on Wednesday above its 50 DMA and fell back below its 50 DMA on Thursday. Also, while each of the indices have formed a higher high, none have formed a higher low yet and since an up trend is made of higher lows and higher highs, it seems premature to call this an intermediate uptrend when the intermediate trend has not formed a higher low and trades below the 30 and 50 DMA. The Nasdaq did form a higher low of sorts when AAPL gapped lower on Tuesday and then bounced higher. This low is an anomoly of sorts as it was essentially formed due to the price action of one stock as opposed to a majority of the stocks in the index. Today each of the indices formed a potential bullish harami on Thursday's one day pull back. The question is will these haramis lead to a reversal on Monday or are they just a pause day until sellers push prices lower next week? Obviously no knows the answer to this question, however, the question does make us aware of what price action we need to look for on Monday. The DJIA and SPX haramis were quite weak closing near Thursday's low and spending the entire day Friday below the R1 level on Thursday's candle. The Nasdaq harami looks stronger closing above the R1 level of Thursday's candle. As you might expect the RUT harami strength is right in between the DJIA/SPX and Nasdaq harami. The RUT spent a portion of the morning above Thursday's R1 level and closed on Friday about 1 point below its Thursday R1 level. Thursday's R1 level is a key short-term resistance level and Thursday's low is a key short-term support level in each of the indices. If the indices break above short-term resistance of Thursday's candle and confirm Friday's bullish harami, the Thursday/Friday low could be viewed as a higher low to match with the recent higher high. If the price action falls below Thursday's low support then the trend will still need to find that higher low. Keep in mind our analysis of last weekend...good earnings, better than expected earnings from financial stocks and lower oil prices are lifting this market...if oil continues to fall expect indices to successfully break through resistance...if oil begins to rise again it is most likely the indices will stall. Index Commentary The DJIA traded and closed below the R1 of Thursday's large black candle...dowward momentum decreased on Friday...formed an inverted hammer, which with Thursday's candle forms a bullish harami following a one day pull back...traded and closed above its 20 DMA...formed a lower high and lower low on this narrow range day...watch for confirmation or non-confirmation of the bullish harami which is a close above the body of Friday's candle...on Monday watch if the DJIA trades above Friday's high or below Friday's low to determine if Friday is a short-term trend reversal or simply a day of rest for sellers. The SPX traded and closed below the R1 level of Thursday's large black candle...downward momentum decreased on Friday...formed a spinning top, which with Thursday's candle forms a bullish harami following a one day pull back...traded below and closed less than one point below its 20 DMA...formed a lower high and higher low, an inside day...watch for confirmation or non-confirmation of the bullish harami which is a close above the body of Friday's candle...on Monday watch if the SPX trades above Friday's high or falls below Friday's low...1,250 is a key support level...watching for short-term trend reversal or continuation to the downside. The Nasdaq traded and closed above the R1 level of Thursday's candle...downward momentum decreased and upward momentum increased on Friday...formed a bullish harami...traded in between its 20 and 30 DMA all day...formed a lower high and higher low, an inside day...watch for confirmation or non-confirmation of the bullish harami...look at the support structure in the 2,275 area...watch for confirmation or non-confirmation of the bullish harami...watch if the Nasdaq breaks above its 30 DMA or falls below its 20 DMA The RUT on Wednesday completed a 61.8% Fibonacci retracement of the June 5 to July 15 down trend...successfully pentrated its 50 DMA, the first of the broad indices to do so...fell on Thursday with the rest of the market...traded on Friday above Thursday's R1 but closed just below R1...also traded briefly above its 50 DMA on Friday...formed a bullish harami with a higher low and a lower high, an inside day...the fast line on the 2-line MACD has been above the 0-line for for four days, the slow is approachig the 0-line...watch for confirmation or non-conformation of the bullish harami and for a close above its 50 DMA...if the RUT closes above its 50 DMA the major test for this up trend is its 200 DMA which it has closed above only once since October 31, 2007...look at the 1 year chart and you can see a potential triple bottom that has been forming since January...key intermediate term reistance is 740...a successful breakout of 740 would give a chart target of 850...this is the most bullish of the broad indices at this moment, keep in mind however that a sustainable up trend in the RUT would likely be supported by the other indices trending up...which means, if a new up trend is in process of forming it is being led by the RUT this time around.. Earnings Watch Thursday AMC/ Friday BMO Earnings Moving Up: JNPR +4.00, MCHP +1.23, ACI +4.70, LM +1.30 Thursday AMC/ Friday BMO Earnings Moving Down: WDC - 2.68, WYNN -1.55, BDK -2,81, No Friday’s AMC Earnings ATM August Straddle Cost at Thursday's Close: 50 ACI 8.00, 60 BDK 6.40, 40 LM 7.18 Stock Commentary NIHD today confirmed its resistance breakout on Thursday of the 52.37 area...chart target is 64...time target is 2 to 8 weeks BUCY reached the resistance high between its recent double bottom...a successful breakout would give a chart target of 77 with a time target of 3 days to 3 weeks. SINA formed Dave's C-Entry as it closed above its 30 and 200 DMA. BAM this week formed Dave's C-Entry as it closed above its 30 and 200 DMA. POT, MOS and AGU formed bullish haramis and are below their 20, 30 and 50 DMA. CF formed an hammer and is trading beow its 20, 30 and 50 DMA. X formed a spinning top near the high of the low day in a down trend. BTU broke the high of the low day as it bounced off of its 200 DMA. CNX formed a morning star pattern as it bounced off its 200 DMA. MEE form a bullish engulfing pattern and is trading below its 20, 30 and 50 DMA. Friday’s Action Moving Up: POT, MEE, MA, X, CLF, ANR, CF, SCHN, MOS, BTU, MTL, MON, AAPL, RIMM, CNX, NIHD, FWLT, V, ESRX, AGU, CELG, EBAY, JASO, IPI Moving Down: BIDU, FSLR, USO, IBM, LEH, MER, SOHU, STRA, DECK, GS, MS Intermediate Term Market Trend: Down Short Term Market Trend: Up

Theme of the Week: Oil Down, Markets Rally

1:48 ET DJIA -13, SPX +0.42, Nasdaq +17, RUT, +6, SOX +0.71, Oil -$2.19 ($123.30) It's definitely appropriate that on Friday, the theme of the week takes center stage...oil down, stocks up. Oil is down today and the market is up. The market hit an early morning low about 15 minutes into Friday's trading session. Then rallied significantly for the next 3o minutes. Since about 10:15 ET it has been pretty much consolidation with the market trading below its high of the first 45 minutes. The Nasdaq and RUT continued their rally until about 11 am ET before consolidating. The indices are essentially forming bullish harami in the lower half of yesterday's large black candle, below the R1 mid-section. The key question is this the beginning of a reversal of a one day pull back, or simply a pause that refreshes sellers before the next step down? Watch the charts for a break above Thursday's R1 level or a break below Thursday's lows. Friday's Action Moving Up: MEE, POT, CLF, X, BTU, MTL, SCHN, MOS, ANR, MON, MA, CNX, AAPL, ESRX, CF, CELG, V, AGU, FWLT, RIMM, EBAY Moving Down: BIDU, SOHU, FSLR, USO, MER, IBM, GS, LEH, DECK, MS

Housing & Financials Weak, Oil Up, Markets Down

DJIA - 283.10, -2.43% SP500 - 29.65, -2.31% NASDAQ Comp. - 45.77, -1.97% Russell 2000 - 16.80, -2.34% Advancers & Decliners NYSE 604 2,565 NASD 905 1,975 Oil closed at $125.49 up $1.05 The initial jobless claims report came in at 406,000 higher than forecasts of 375,000. Existing home sales came in at a seasonally adjusted 4.86 million lower than the forecast for 4.94 million and lower than May’s 4.99 million level. These worse than expected economic reports prompted traders sell to financial and home building stocks. XLF was down $1.39 or -6.19%. SKF, the ultra-short financial ETF, rose $13.48 or +11.53%. XHB, the homebuilders ETF, was down $1.89 or – 10.11% On Wednesday the candles indicated on the DJIA that momentum is slowing down, on the SPX a possible short-term pull back, on the Nasdaq if a pull back occurs and on the RUT forming a shooting star pattern and sure enough a pull back did occur. Each index fell below the rising support line of the counter-trend support bounce bear flag pattern of the past week. Index Commentary The DJIA fell below its 30 DMA and formed a bearish engulfing the egulfed previous four days...not only did momentum slow down from yesterday it reversed...broke S1, S2 and S3 level of Tuesday's candle...the index stayed above the 50% Fibonacci retracement at 11,262.

The SPX bounced down from the resistance at its 30 DMA and formed a bearish engulfing pattern...making the short-term pull back...it fell below its 20 DMA...and fell below the S1 and S2 levels of the Tuesday July 22 candle...the SPX stayed above the 50% Fibonacci retracement is at 1,245.

The Nasdaq bounced down from its 30 DMA...it formed a bearish engulfing pattern...the Nasdaq fell to the S1 level of Tuesday's large white candle as a pull back occured...closed at its 20 DMA...stayed above the 50% Fibonacci retracement at 2,258.

The RUT formed a bearish engulfing pattern that confirmed Wednesday's shooting star pattern...is trading above its 20 and 30 DMA...bounced down from its 61.8% Fib retracement of the down trend started on June 5 and broke below the 50% Fib retracement level...fell below Tuesday's S1 level...the fast line of the 2-line MACD stayed above above the 0 line...we waited a day and the RUT did not stay above its 50 DMA so no intermediate up trend status yet. Earnings Watch Wednesday AMC/ Thursday BMO Earnings Moving Up: AMZN, BIDU, QCOM, CELG, STRA

Wednesday AMC/ Thursday BMO Earnings Moving Down: AEM CDNS, CTXS, WFR, FLIR, POT, LUV Thursday’s AMC Earnings After Hours Market Moving Up: JNPR, MCHP Thursday’s AMC Earnings After Hours Market Moving Down: WDC, WYNN After-hours: JNPR +2.28, MCHP +1.50, WDC -3.61, WYNN -2.84 ATM August Straddle Cost at Close: 23 JNPR 2.48, 30 MCHP 2.80, 35 WDC 4.35, WYNN 15.35 Stock Commentary POT, MOS and AGU broke support forming lower lows KOL, BTU, CNX and MEE continued moving lower BIDU, AMZN and CELG gapped higher on earnings IBM closed at its all-time high of 130.00 and if it successfully breaks out of 130 would have a price target of $143. Thursday’s Action Moving Up: BIDU, STRA, AMZN, FSLR, CELG, SOHU, CNX, MON, USO Moving Down: MTL, MA, AGU, GS, AAPL, DECK, POT, SCHN, MER, X, DRYS, MOS, FWLT, V, RIMM, NUE, IPI, LEH, BRCM, MEE, CLF, ANR, UAUA, MS, JASO, NKE, GRMN, EBAY, SBUX, PCLN, EXPE Intermediate Term Market Trend: Down Short Term Market Trend: Up

BIDU Up in Pre-Market, Watch Support Resistance Levels on Indices

Futures are down in pre-market, if the market moves down after the open watch those key support levels and look for the market to make a higher low. If markets move higher focus on breakouts and stocks that hold above those breakout levels. Watch the price of oil to see if it continues its recent short-term down trend. This will give clues to the strength of stocks today and for the next several days. Lower oil will most likely continue to equate to higher stock prices. Stocks that released earnings yesterday AMC Pre-Market Trading: BIDU +36.66, QCOM +9.99, AMZN +5.85, WFR -9.55, CDNS -2.79 Watch the market action of stocks scheduled to release this morning: MMM, BMY, CELG, CNX, DO +4.39, FLIR, POT +2.91, LUV, STRA, UNP +2.16 Thursday's AMC schedule: JNPR, MCHP, WDC, WYNN

Oil Down and Stocks Up Again...A Winning Combination

DJIA + 29.88, +0.26% SP500 + 5.19, +0.41% NASDAQ Comp. + 21.92, +0.95% Russell 2000 + 2.37, +0.33% Advancers & Decliners NYSE 1,965 1,196 NASD 1,674 1,248 Oil closed at $124.44 down $3.98 Oil fell again on Tuesday for the sixth time in the last seven days. The Dow and Russell rose for the fifth time in the last six days. Looks like a winning combination; Oil down, stocks up. If oil continues its down trend we expect the short-term up trend in stocks to become an intermediate term up trend. Check out our *New* features under Earnings Watch... Index Commentary The DJIA stayed above its 30 DMA on Wednesday and formed a small spinning top...this could be a sign that the momentum of the past week is slowing down...the short term trend continues to be up...if a pull back does occur keep your eye on the S1, S2 and S3 levels of Tuesdays candle...a pull back to any of these levels would be a higher low...a 50% Fibonacci retacement would be at 11,262.

The SPX hit resistance at its 30 DMA and pulled back forming a shooting star pattern...suggesting a possible short-term pull back...it is still above its 20 DMA...if a pull back occurs watch the S1, S2 and S3 level of the Tuesday July 22 candle...the 50% Fibonacci retracement is at 1,245.

The Nasdaq broke through its 30 DMA only to see sellers push the index back under by the close...it formed a white candle with a large upper shadow...again watch the support levels on Tuesday's large white candle if a pull back occurs...closed above its 20 DMA...the 50% Fibonacci retracement is at 2,258.

The RUT reached its double bottom breakout target today at 720...moved toward its 200 DMA before seller pushed the index back forming a shooting star pattern...is trading above its 20, 30 and 50 DMA...broke through and closed at its 61.8% Fib retracement of the down trend started on June 5...watch Tuesday's S1, S2 and S3 levels if a pull back occurs and for a higher low...the fast line of the 2-line MACD moves above the 0 line...this looks like an intermediate term uptrend and we'll give it another day to see if it stays above its 50 DMA.

Earnings Watch Tuesday AMC/ Wednesday BMO Earnings Moving Up: ISRG +50.90, ILMN +7.85, GD +5.82, NIHD +5.07 Tuesday AMC/ Wednesday BMO Earnings Moving Down: BRCM, CHRW, LLTC, YHOO, BA, COP, GENZ, COP Wednesday’s AMC Earnings After Hours Market Moving Up: AMZN, BIDU, QCOM Wednesday’s AMC Earnings After Hours Market Moving Down: WFR After Hours: AMZN +6.04, BIDU +38.38, QCOM +8.38, WFR -13.50 *NEW* ATM August Straddle Cost at Close: 70 AMZN 9.95, 290 BIDU 43.24, 45 QCOM 4.79, 55 WFR 8.00 Stock Commentary DECK closed above 124 resistance, bounced down from its 30 and 200 DMA and closed above its 20 DMA. The breakout gives a short-term price target of 136. RIMM closed above resistance of 117...closed above its 20 DMA...the breakout gives it a short-term target of 124. SOHU rose near 84 resistance area and above 50 DMA...watch for resistance breakout POT fell to support and below 50 DMA...watch for support break MOS fell to support and below 50 DMA...watch for support break CF fell below 50 DMA AGU fell to support and below 50 DMA...watch for support break Wednesday’s Action Moving Up: DECK, DRYS, AAPL, SOHU, RIMM, AMZN, UAUA, LEH, ESRX Moving Down: CF, POT, MOS, MON, ANR, FSLR, AGU, CLF, X, IPI, PCLN, BIDU, USO, CNX, MA, MTL, MEE, BTU, SCHN, CELG, FWLT, NUE, BRCM, STRA Intermediate Term Market Trend: Down Short Term Market Trend: Up

Watch Oil and Earnings, NIHD Up in Pre-Market

Earning Watch this morning... Pre-Market Trading BA down COP up GD up GENZ down MCD up NIHD up +8% BTU down Oil Inventories out a little later this morning... Futures which are not always indicative of the full day are up slightly in pre-market trading. Read this weekend's and yesterday's comments if you haven't done so yet...

Markets Reverse and Finish Up Strong Another Bullish Sign

DJIA + 135.16, +1.18% SP500 + 17.00, +1.35% NASDAQ Comp. + 24.43, +1.07% Russell 2000 + 19.19, +2.75% Advancers & Decliners NYSE 2,225 923 NASD 1,960 961 Oil closed at $128.42 down $3.40 After Tuesday's market action you now know why we took all the time we did over the weekend to talk about the bullish technical evidence that appeared on the charts in the second half of last week. We emphasized the importance of the earnings, earning in financial stocks and the price of oil. These factors remain just as important if the market is to continue this rally and ultimately change from a short-term up trend to an intermediate term up trend. On Monday oil rose over weather concerns in the gulf. Today oil fell when it looked as if oil platforms in the gulf would not be threatened. It is important to understand what happened yesterday and today. Last week oil fell because it appeared that economic slowdown was dampening the demand for oil. Yesterday it rose due to weather, NOT demand factors. As everyone knows weather does shift continually. As the weather threat subsided price fell due to the same demand factors that drove it lower last week. So weather of course could change daily, however it appears the pullback in oil for demand factors is very real. Oil, USO and XLE have all fallen below their 30 DMA which of course is a down trend. Tuesday was an unusual day that increases probabilities of the bullish outlook we discussed over the weekend. AAPL and WB gapped lower this morning and then had an unusually fast recovery. Other stocks including PCP, AXP, RIMM, MA, V and BIDU among others experienced the same type of intra-day reversal. This reversal of fortunes led to each of the indices opening lower and then reversing with a strong rally to the upside. We will discuss at another time but what you have been seeing since late last week would qualify as a buying panic. Index Commentary All the indices reversed early morning losses and closed strong for the day on good earnings and falling oil. The DJIA stayed above its 20 DMA and just pierced its 30 DMA today at the close. It moved above the short-term resistance of its recent horizontal bear flag, the 11.500 area and has formed a higher high. The SPX broke through its 20 DMA today and closed in the area of recent horizontal support, now resistance in the 1,275 area. The Nasdaq which closed below its 20 DMA on Monday gapped lower in early trading, reversed and formed a bullish engulfing pattern and closed above its 20 DMA. The RUT formed a large white candle breaking it 30 DMA and piercing of its 50 DMA at the end of the day. If this 50 DMA breakout holds the RUT will be the first of the indices to reverse its intermediate term trend to up. Earnings Watch Monday AMC/ Tuesday BMO Earnings Moving Up: AMLN, STLD, BHI, BIIB, CAT, CME, DD, KEY, LMT, STI, WB Monday AMC/ Tuesday BMO Earnings Moving Down: AAPL, AXP, LOGI, SNDK, TXN, AKS, HAL, MICC, PCP Tuesday’s AMC Earnings After Hours Market Moving Up: ILMN, ISRG, YHOO Tuesday’s AMC Earnings After Hours Market Moving Down: BRCM, CHRW, LLTC After Hours: ISRG +32.77, ILMN +3.50, BRCM -1.40, CHRW -4.60 Stock Commentary Coal sector stocks after a one day bounce reversed down with oil...KOL, BTU, CNX, MEE watch for a break of support in what appears to be a new down trend. Ag-reltaed stocks AGU, CF, IPI, MOS, POT moved lower in sideways consolidation patterns. No lower low in these stocks yet but watch support levels closely. Steel stocks X, SCHN, NUE, AKS are falling from lower highs to lower lows. FSLR moved lower in a sideways consolidation pattern. RIMM gapped lower breaking it bear flag pattern and then rallied with the market back into it bear flag. GS moved higher with a large white candle and is above its 20, 30 and 50 DMA. MER broke above its 20 and 30 DMA and above its most recent high forming a higher high. MS moved back above its 30 DMA. LEH closed above its 20 DMA. MA gapped lower and had a strong support bounce and finished above its 20 and 3o DMA. V gapped lower and finished higher for the day. Tuesday’s Action Moving Up: GS, DECK, MA, PCLN, MER, UAUA, MS, V, GRMN, LEH, IBM, NKE, MON, SOHU, SBUX, ESRX, EBAY, CELG Moving Down: FSLR, CNX, MEE, POT, SCHN, BIDU, X, AAPL, BBTU, ANR, CLF, MOS, USO, AGU, DRYS, RIMM, IPI, MTL, NUE, JASO Intermediate Term Market Trend: Down Short Term Market Trend: Up

AAPL, Indices Down in Early Trading

35 minutes into Tuesday's session DJIA -6, SPX -4, Nasdaq -9, RUT +1, USO -$3.70 The indices have rallied in the last 15 minutes from the lows in the first 20 minutes of trading. The big news from last night is AAPL down 14.10 at this moment and AXP -3.85. Other stocks with earnings last night LOGI, SNDK and TXN all down this morning. AMLN and STLD are up. Stocks scheduled for Tuesday BMO earnings release MICC is down 17.50. Also down this morning AKS, HAL, PCP and XTO. Bank related stocks that are down after early earnings KEY, STI and WB. Stocks that are up after their announcement BHI, BIIB, CAT, CME, DD and LMT. RIMM and BIDU which fell in after hours trading along with AAPL are still down this morning, while GOOG which was also down in after-hours is trading up this morning. Dave's Insight: Remember once a company has released earnings the stock becomes a candidate to trade its trend, as long as you follow your trading rules. Tuesday's Early Action: Moving Up: Nothing over $1.00 from our watchlist Moving Down: AAPL, MA, FSLR, BIDU, MEE, PCLN, CNX, POT, ANR, MOS, BTU, X, SCHN, USO, V, CF, AGU, RIMM, DRYS, NUE, IPI, GS, DECK, MER

AAPL, AXP Disappoint After Hours, Trading Lower

DJIA - 29.23, -0.25% SP500 - 0.68, -0.05% NASDAQ Comp. - 3.25, -0.14% Russell 2000 + 4.55, +0.66% Oil closed at $131.04 up $2.16 Monday started out on a plus side as both BAC and UB exceeded earnings estimates before the market open. Oil began to rise over concerns over potential hurricane weather in the Gulf. Ag-related, steel and coal stocks rebounded today. Some of the financials began to fade after three plus strong days. FRE closed lower today and FNM closed well below its highs of the day. XLF closed just 8 cents higher today. Monday started the week with the positive earnings from financials but the negative from rising oil prices. Key earnings after the close on AAPL and AXP brought negative surprises that sent both stocks and others lower after the close. AAPL earnings were fine but their guidance moving forward was below expectations. AAPL was down over $16 and AXP was down over $4 in after-hours trading. GOOG, BIDU and RIMM moved lower in sympathy in after-hours trading. While these stocks can rebound and open at higher prices in the morning keep an eye on key technology. If the after-hours trading is any idea for tomorrow, expect the Nasdaq to move lower. A lot of stocks like RIMM are in bear flag counter trend bounces since last week and AAPL may be just enough to send them rolling down. Watch for stocks that break the low of the high day, break bear flag support or confirm bearish candle patterns as signals for another move down. Tuesday morning key earnings include CAT, CME, KEY, WB, BIIB and AKS. After the close, notable releases include BRCM, CHRW, ILMN, ISRG, LRCX, LLTC and YHOO. AAPL appears to have set the tone for a down day on Tuesday and we’ll find out if Tuesday morning’s releases with offset or add to the downside tomorrow. Index Commentary The DJIA finished with a bearish harami in a potential bear flag pattern. The SPX followed Friday’s hanging man with a spinning top. The Nasdaq finished with a bearish engulfing pattern. The RUT finished with a white spinning top. Consider DIA, SPY, QQQQ and IWM for bearish trades if you see the indexes rolling over. Monday’s Action Moving Up: POT, MOS, X, MEE, CF, CNX, MON, CLF, AGU, BIDU, BTU, SCHN, IPI, ANR, NUE, USO, RIMM, FSLR, GRMN, SOHU, AAPL, MTL Moving Down: MA, PCLN, STRA, MS, GS, V, V, BRCM, IBM, LEH Intermediate Term Market Trend: Down Short Term Market Trend: Up

Short Term Trend Reversal or the Pause That Refreshes?

11:12 ET The DJIA - 33 points, SPX -0.05 points, Nasdaq -5.45 points, RUT +1.89 points, Oil +88 cents Markets have pulled back as GOOG -$9.53, continued Friday's slide. IBM is lower bouncing down from resistance. Financials stocks are higherm XLF +29 cents, AIG, BAC, UB, C, FRE and FNM are all higher. Essentially markets are pausing and consolidating last week's gains in the vicinity of their 20 DMA which is the restistance are of their short term trends. The DJIA and RUT are above their 20 DMA and the SPX and Nasdaq are just below. Watch if price action stays above or falls below key support levels. AAPL releases earnings after the close today along with other notable stocks on this weeks list posted early this morning. The reaction to AAPL's earnings is an important factor for the short-term direction of the Nasdaq market. Ag-related and coal stocks are higher. Moiving Down: MA, PCLN, STRA, FSLR, AAPL, IBM, AMZN, BRCM, MS, NKE, GS, GRMN

BAC & UB Beat Estimates, Markets Up

Both BAC and UB beat estimates adding to a string of wins for banks reporting starting last week. Oil is holding steady, up 22 cents in early trading. This is creating a positive environment in the first 40 minutes and the broad indices are trading higher. GOOG, MSFT and GILD are near even for the morning only AAPL is down $1.25. With these stocks holding even the Nasdaq is up this morning. Look for AAPL earnings today after the close. Monday's Early Action Moving Up: POT, BIDU, MOS, CF, MON, AGU, RIMM, X, IPI, SCHN, SOHU, LEH, CELG, MER, MEE, NUE,BTU, GS, V, CNX Moving Down: MA, PCLN, AMZN, IBM, STRA, AAPL, NKE, FSLR, BRCM

Earnings for the Week of July 21 to July 25

Earnings season continues today, Monday, July 21 and this is a big week in earnings as you can tell from the partial list below. If you have short-term option positions it is critical to be aware of the ERD (Earnings Release Date) and whether earning come BMO (Before Market Open) or AMC (After Market Close). Also if you trade the Straddle or Strangle Strategies over earnings, you will need to know the ERD. We offer this information as a reminder only. Since companies can and do make changes to their release date, we can’t guarantee its accuracy. So make any trade decisions only after you have checked your data sources to verify the actual date. Here are some of the notable stocks releasing earnings this week: Monday July 21 BAC BMO MRK BMO SGP BMO UB BMO AXP AMC AMLN AMC AAPL AMC LOGI AMC SNDK AMC STLD AMC TXN AMC Tuesday, July 22 AKS BMO BHI BMO BIIB BMO CAT BMO CME BMO DD BMO HAL BMO KEY BMO LMT BMO MICC BMO PCP BMO STI BMO WB BMO XTO BMO BRCM AMC CHRW AMC ILMN AMC ISRG AMC LRCX AMC LLTC AMC YHOO AMC Wednesday, July 23 BA BMO COP BMO GD BMO GENZ BMO MCD BMO NIHD BMO BTU BMO AEM AMC AMZN AMC BIDU AMC CDNS AMC CTXS AMC WFR AMC QCOM AMC Thursday, July 24 MMM BMO BMY BMO CELG BMO CNX BMO DO BMO FLIR BMO POT BMO LUV BMO STRA BMO UNP BMO JNPR AMC MCHP AMC WDC AMC WYNN AMC Friday, July 25 ACI BMO BDK BMO LM BMO

Dark Knight, A Joker or the Beginning of a Market Bottom

DJIA + 49.91, +0.44% SP500 + 0.36, +0.03% NASDAQ Comp. - 29.52, - 1.28% Russell 2000 - 3.55, - 0.51% Oil closed at $128.88 down 41 cents The markets are potentially in the process of forming a bottom. Due to the significance of this point in the market, this commentary will have more depth. Congratulations for checking back, this is the complete story… We are going to look at the market technically. One of the core tenets of technical analysis is; Market Action Discounts Everything. If this tenet is correct then all the economic, structural, political and fundamental news is in the price action. In essence by looking at the price action, one is looking at the effect of “everything else”, whether they are directly aware of the “everything else” or not. Next we will look at some of the “everything else” that took place this week. Some of which we’ve posted on already, some we haven’t; earnings, structural developments and fundamentals. Finally, like we did last Monday morning, in our obscenely early fist post of the week, we will share the list of notable stocks with earnings next week. This will be a significant post worth the time it takes to read when it is complete. So stay tuned and enjoy…. Dark Knight opened yesterday, Friday, July 18, to rave reviews from fans and critics, some are projecting the biggest box office hit ever…time will tell on that forecast…however, due to timing of its release, the metaphor for the market over the past eight weeks and this week seems appropriate… For the past nine months the market has been in an intermediate term down trend. During the past eight weeks, since the double top in the DJIA in May, the market has been falling with such tenacity, that bulls have been drowning and have had very few days in which they have been able to gasp for air. For traders that have had bullish positions in down trending stocks it has truly been a Dark Knight. The question, of course, is; Is the rally of the past three days, a for real rally that is the Beginning of a Market Bottom and ultimate reversal of the intermediate term trend or is it The Joker, that is just here to lull you into a sense of false security, with its pleasing clown-like face, before unleashing its chaos and destruction upon every bullish trader? Index Commentary The DJIA was up for the third day in a row for the first time since May 29. For the week the Dow was up 396 points it largest weekly gain since April 18. Since it was two large candles and a spinning top this was not technically a three white soldiers pattern. The Dow close above its 20 DMA for the first time since May 19. It also broke above its recent horizontal bear flag high and formed a slightly higher high. The weekly candle is a bullish engulfing pattern. The next major resistance test for the DJIA is the R1 level of the June 26 candle and the 30 DMA in the 11,650 area. Let’s be clear this is still a counter trend move, however it is the size of the move indicates that big money has been buying the past three days. This sets up the potential for an intermediate term trend reversal. Most intermediate term down trends don’t end by going straight up. They typically make a high then pull back to a double or triple bottom of some type or a higher low and then reverse to the upside. Review your DJIA chart for the bottoms in June/July of 2006, March 2007, August 2007 and January/March 2008. Strong components in the Dow this week were IBM, C, BA, BAC, AXP, GM, DD, INTC, MCD, HD, JPM and CAT. Review the individual charts and you’ll see some candle and price patterns that you should recognize. The SPX was up just over a third of a point, essentially unchanged for Friday. The small spinning top formed a bearish harami. Watch for confirmation or not on Monday. Three up days and the pattern was not even close to three white soldiers. A close look reveals a pattern that should be called “three bears…a papa bear, a mama bear and a baby bear.” The SPX did NOT make a higher high or close above its 20 DMA as did the Dow. The SPX ran into sellers in the 1,260 area and note that the last high is in the 1,275 area. Notice also that the 1,260 area is the R1 level of the July 9 large black candle. This was the first positive week for the SPX since May 30. Also when you look at the weekly chart you will notice that the weekly candle is a hammer. The Nasdaq dropped more on Friday than it rose on Thursday. The candle gapped down and formed a lower high and lower low. However, it did not close below the low of the high day. Thursday’s close was above its 20 DMA and Friday’s close was back below the 20 DMA. Thursday was a slightly higher high than its recent high on July 8. Watch to see if the current pullback forms a higher low, especially watch the S1 level of Wednesday’s large white candle. The Nasdaq fell on Friday due largely to disappointing earnings Thursday evening from GOOG, MSFT and GILD. AAPL was also down even though it does not report earning until Monday July 21. RIMM was up although it did pull back from its high going into the close. The reaction to AAPL earnings on Monday after the close will play a big part in whether the index finds support and forms a higher low or whether it does a full retracement to perhaps form a double bottom. This was the first up week for the Nasdaq Composite since May 30. The weekly candle is a hammer pattern with an upper shadow. The RUT formed a bearish harami, a hanging man if the shadow were longer, on Friday after two large white candles. The RUT has already formed a double bottom on July 7 and 15 and Wednesday’s close was confirmation of the pattern as it broke above the high resistance of the two bottoms. The RUT did stay above its 20 DMA even though it closed slightly lower than on Thursday. The current price target from the double bottom breakout is the 720 area. This was the second week in a row that the RUT closed higher. The last two weeks had formed a bullish harami and this week is a hammer pattern that confirms the bullish harami. This is the largest weekly gain since May 30. The SOX formed a hanging man and bearish harami on Friday, while staying above its 20 DMA. Thursday’s move formed a higher high. It’s weekly candle formed a bullish harami.

Stock Commentary

RIMM formed an outside continuing its recent support bounce, sellers appeared at 200 DMA and horizontal resistance

IBM moved to horizontal resistance at 130, a new high close, watch for a breakout to new all time highs

SCHN formed a piercing line in what appears to be a pause in a new down trend, if buying runs out look for anothe move down

Coal stocks KOL, BTU, CNX, MEE broke to lower lows from lower highs along with the drop in oil prices, if oil prices move lower look for the next bearish entry on these stocks.

Ag-related stocks AGU, CF, MOS, POT fell from lower highs this week, watch to see if the stocks break support to form lower lows.

The Past Week - What Happened

This week is a valuable lesson on the transitory nature of opinions expressed in the media. On Monday and early Tuesday the markets were down and this was being attributed to Bernanke's comments before Congress on high energy prices, tighter credit conditions, weak housing and price inflation. He also said that FNM and FRE were not in danger of failing. On Tuesday PPI came in higher than expected while core PPI came in lower than expected. STT reported better than expected quarterly results as did JNJ. That day markets hit a low and rebounded. On Tuesday each of the major indices had a long lower shadow (as did XLF) that indicated that big money buyers came in that day and the markets rebounded from their intraday lows...and yet the market seemed pretty bleak to most of the commentators.

Oil fell over $16 or 11% this week beginning on Tuesday over concerns that slower economic growth would lead to lower demand for oil. During after-market hours INTC reported stronger than expected revenues and earnings and raised guidance for Q3.

On Wednesday morning the CPI report was 1.1% for June and 5% for the past 12 months, the highest 12 month percentage since 1991. Then something happened. WFC (see last Monday's Earnings Releases for notable stocks...now you know why certain stocks are listed) reported earnings that beat the street estimate and also raised their dividend and financial stocks began to rally. The combination of STT on Tuesday and WFC on Wednesday seemed to change the dire outlooks for financial stocks at least among big money buyers. FNM and FRE made large percentage moves and a report on higher than expected U.S. crude oil inventories helped oil prices fall.

On Thursday morning JPM reported higher than expected earnings and finaniclal stocks including FNM, FRE and XLF had large gains for the second day in a row. Oil dropped further. During after-market hours IBM reported better than expected numbers while GOOG, MSFT and GILD disappointed.

On Friday C reported better than expected numbers and combined with IBM helped lift the Dow, while GOOG, MSFT, GILD and AAPL contributed to a lower Nasdaq. SLB also reported better than expected numbers.

A combination of falling oil prices, the Fed's comments regarding FNM and FRE and better than expected earnings among key stocks and key financial stocks lifted stocks late Tuesday through Friday.

There was a structural change that also contributed to the rise in financial stocks when the SEC imposed a ban on naked short-selling of shares key banks, investment bank and mortgage companies including FNM and FRE. The ban takes effect on Monday.

This Coming Week - What to Watch For

Earnings and the price of oil are the key factors to watch fundamentally. On the charts watch if price action breaks out of important resistance levels on the indices and individual stocks. If prices pull back watch for important support levels hold.

Before the market opens on Monday earnings from BAC, UB, MRK and SGP will give us some early clues. After the market closes look for key releases from AAPL, AXP, STLD and TXN. Look for our Notable Earnings Posting in the wee hours on Monday morning long before the market opens. A week ago the weight of the evidence was overwhelmingly bearish. After Friday there is a lot of bullish evidence on the charts. We conclude that bullish factors have risen to as much as 40% from next to zero from just a week ago. We have taken the time to explain what motivated much of the buying that showed up on the charts this week. The buying was strong enough that it would be unwise to ignore it. It is absolutely critical to remember at this moment the intermediate term trend is down. For this to change to an uptrend the price action has to break through resistance levels and form both a higher high (which some charts have) and a higher low. That could happen this week or the market may pull back and need more time to consolidate before moving higher. If oil prices rebound to recent highs and earnings are disappointing this week especially among financial stocks, these counter trend moves could turn into bear flag patterns. If oil stays where it is or moves lower and there are more better than expected earnings especially from financial stocks, this may be the beginning of a trend reversal and an intermediate term up trend in the near future becomes evern more probable. Whether you pay attention to earnings and the price of oil or not, Market Action Discounts Everything and it will appear on the charts, so stay focused on the Chart Signals.

Friday's Action Moving Up: IBM, SCHN, RIMM, SOHU, GS, CLF, FSLR Moving Down: BIDU, AAPL, PCLN, DECK, MA, POT, MON, MTL, CF, AMZN, MEE, X, MOS, V, GRMN, BTU, ANR, MUE, ESRX, IPI, AGU, USO, GWLT, DRYS, EXPE Intermediate Term Market Trend: Down Short Term Market Trend: Up

No Surprise, Markets Still Mixed Just Before Options Expiration

30 minutes before the close the DJIA is up 13 points. The SPX, Nasdaq, RUT and SOX are still down. Oil is down 41 cents. Coal stocks are moving lower. Ag-related POT, CF, MOS, IPI and AGU are all lower. GOOG, BIDU and AAPL are down and weighing on the Nasdaq. RIMM has a bounced positivie into its 200 DMA. Financial stocks are stronger XLF, FNM, FRE and C have positive gains for the day. Moving Up: RIMM, IBM, SCHN, STRA, SOHU, UAUA Moving Down: BIDU, PCLN, DECK, AAPL, MA, MON, X, AMZN, MTL, POT, MEE, MOS, CF, BTU, V, GRMN, NUE, CNX, NUE, USO, ESRX, AGU, EXPE, FWLT We're headed out for the balance of the day so be sure check back Saturday for our Friday wrap...we will have important insights to share on this weeks support bounce as well as notable stocks with earnings releases next week...

July Options Expire Today, Markets Mixed

Just before 1 pm ET the DJIA is -10, SPX -5, Nasdaq -37, RUT -6, SOX -5. The market has been down, up and down so far, a fairly typical wandering for options expiration Friday. GOOG is down just over 50 points, BIDU is -$9, AAPL is -$5 and RIMM is down just 20 cents. IBM is up almost $3 and C is up $1.64 and SLB is up $.32 or 4.53%. Oil is up 51 cents. Financial stocks are up slightly, XLF is up 32 cents, FNM is up another 2.29 or 20% with FRE is up 75 cents or 9% Friday's Mid Day Action Moving Up: SCHN, IBM, CLF, UAUA Moving Down: BIDU, DECK, PCLN, AAPL, MON, MTL, MA, AMZN, MOS, CF, CNX, BTU, ANR, V, DRYS, GRMN, POT, MEE, FWLT, ESRX, BRCM, NKE, EXPE, CELG, MER

GOOG Down, Citigroup Up

Markets are mixed in th first 45 minutes of trading. Reacting to earnings after the close GOOG, GILD, MSFT, COF, MER and AMD are down while IBM is up this morning. This morning C reported a $7.2 billion dollar writedown which was smaller than expected as well as a smaller than expected operating losses. C is trading up $1.50. SLB beat estimates and the stock is up more than $3.70. HON also reported this morning and is trading down about 50 cents. Steel stocks X, SCHN, STLD and NUE are higher this morning. Coal stocks KOL, CNX and MEE are up, BTU is down. Ag-related stocks POT, MOS, IPI are down, CF and AGU are up. The Nasdaq is down over 1.6% heavily influenced by GOOG which is down over $47 or 8.9%. The other indices are down 0.3% to 0.6%.

Oil Down Again, Stocks Up, After Close Earnings Disappoint

DJIA + 207.38, +1.85% SP500 + 14.96, +1.20% NASDAQ Comp. + 27.45, +1.20% Russell 2000 + 9.88, +1.44% Oil closed at $129.29 down $5.31 Oil continued to move lower attributed to concerns that slower economic growth will reduce demand for oil. USO, the oil ETF, was down 3.41% to 105.53. XLE, the energy ETF, which closed below its 200 DMA on Wednesday fell another 1.48%. Financial stocks were strong for the second straight day. XLF, the financial ETF, was up another 4.33% and closed 10 cents above it 20 DMA. JPM rose on better than expected earnings. FNM rose another 18% and FRE was up 21%. Ag-related, mining, steel and coal stocks moved lower today. Today was the biggest day for earnings releases so far. In after hours earnings…MER reported a $4.6 billion loss and the stock was down over 6% in after-hours trading…GOOG was down over $40 or 7.56% in after hours trading as earnings disappointed…IBM traded slight lower in after-hours…COF is down over 5% in after-hours…AMD was down 6.6% or 35 cents in after-hours…GILD is down over 4% or $2.40 in after-hours…MSFT was down over 6% or $1.80. Earnings on C, HON and SLB are scheduled to be released before the market opens on Friday. With the market up for the second straight day we have changed our short-term trend status to up. Index Commentary The DJIA had it second large white candle on Thursday. The DJIA closed above its July 2 high and its 20 DMA. This is still a counter trend support bounce and it is the strongest bounce since April when the index was in an up trend. The SPX was finished below its 20 DMA and July 9 high.

The Nasdaq moved above its July 2 high and also closed above its 20 DMA.

The RUT which was relatively stronger broke through a double bottom resistance that gives the index a 720 price target. The RUT closed above its 20 DMA.

The SOX which is an important subset of the Nasdaq market rose 2.3% and closed above its 20 DMA. Each of these indices are in a counter trend bounce which is probable to form into either an bear flag for another pull back to test the support lows or congest sideways to form a higher low. Watch the Fibonacci retracements for hidden levels of support if the markets pull back. Stock Commentary RIMM rallied into its 200 DMA where sellers appeared. GS rose to a horizontal resistance area of 185 where sellers appeared and pushed prices below its high. GS closed above its 20, 30 and 50 DMA. X broke below support generating a price target of 124. STLD fell to support which if broken will generate a price target of 25. MEE fell to support around 67 which if broken would generate a price target of 47. Conintue to follow Wednesday's C - Pattern Setups and the Down trending support bounce stocks from the NDX. Thursday’s Action Moving Up: MA, GS, BIDU, MS, V, MER, STRA, LEH, DECK, ESRX, SHOHU, UAUA Moving Down: FSLR, POT, ANR, MOS, X, SCHN, CNX, MEE, NUE, CLF, BTU, CF, AGU, EBAY, USO, MTL, IPI, MON, DRYS, AAPL, PCLN, JASO Intermediate Term Market Trend: Down Short Term Market Trend: Up