A Bullish Harami Fibonacci Bounce

Tuesday, December 2, 2008 DJIA + 270.00, +3.31% SP500 + 32.60, +3.99% NASDAQ Comp. + 51.73, +3.70% Russell 2000 + 24.75, +5.93% Exchange NYSE NASD Advancing 2,842 2,038 Declining 990 830 Oil $46.96 -$2.32 Gold $781.30 +$6.70 SOX 185.69 +2.45 VIX 62.98 -5.53 Strongest Sectors: XLF +8.15%...XLY +4.65%...XLI +4.62% Weakest Sectors: XLP +1.45%...XLV +2.58%...XLU +2.60% Sector Watch Up Trending: Sideways: XLE, XLP, XLU Down Trending: XLF, XLY, XLV, XLI, XLB, XLK Stocks rebounded on Tuesday after being technically oversold on Monday. The broad indices bounced off of Fibonacci retracement levels, rose to the R1 levels of Monday’s large black candle and formed bullish harami patterns. Watch on Wednesday to see if stocks can break through Monday’s R1 resistance level. The VIX fell confirming the rise in the SPX. The SOX rose but by a smaller amount than the Nasdaq raising a question mark about the sustainability of the tech bounce. The DJIA continues in its intermediate term (7 weeks) sideways trading range while the SPX, Nasdaq and RUT are still below key support/resistance levels. Check out our Stocks to Watch on Wednesday list. Oil continued to fall while gold prices rose. All nine sectors ETFs were higher on Tuesday with Financial XLF leading the way. Index Commentary The DJIA formed a bullish harami that rallied to Monday’s R1 level…remained in sideways trading range…bounced off 50% Fibonacci support and rose above the 38.2% retracement level from the Nov. 21 low. (click image to enlarge) The SPX formed a bullish harami that rallied to Monday’s R1 level…closed above its Oct. 10 low…also bounced off its 50% Fibonacci level and rose above the 38.2% retracement from its Nov. 21 low. The Nasdaq formed a bullish harami and bounced from near its 61.8% Fibonacci retracement and rose above its 38.2% level. The RUT formed a bullish harami…rose to Monday’s R1 level and rallied from below its 50% Fibonacci retracement and rose above the 38.2% level from its Nov. 21 low. (click image to enlarge) ProphetCharts Stocks to Watch on Wednesday Leading Stocks: Holding Above 30 DMA AXYS…AYE…DV…EZPW…PCLN…PPD…ASIA…BAP…CBST…DLTR…ESI…FLR…FSTR…TKC…JCOM…JEC…MTD…PCR (click image to enlarge) JEC = A Bullish Harami

Moving Above 30 DMA AME…AOB…ATK…B…CL…CTSH…FLIR…FWLT…IRIS…JW.A…MIG…PCP…PETS…PRGO…PSSI…RTN…SNA…SPTN…TEVA…WMS Moving Below 30 DMA MMM…MTD…RCI Staying Below 30 DMA MYGN…GIS…AMX…BCR…CERN…CHU…GILD…HAS…LFC…URBN…RCI…AFAM…AGN…ANSS…CHTT…DGIT…ESRX…LAYN…NIHD…NOV…OSIP…RIO…SHW…SINA…SOHU…SWN…VIVO…VMI…WAB Tuesday’s Action Moving Up: STRA, FSLR, CNX, MA, MON, FWLT, KRE, CLF, NIHD, CF, NUE, V, EBAY, GDX, SCHN, FWLT, X, MOS, ANR, KBE, NDAQ, BTU, AFAM, HANS, ONXX, LCC, INFY, GRMN, MEE, RF, UAUA Moving Down: POT, AGU, IPI, PCLN, GS

(click image to enlarge) PCLN = A Bull Flag?

Intermediate Term Market Trend: Neutral – DJIA, Down – SPX, Nasdaq, RUT Short Term Market Trend: Neutral