Inverted Hammer Bullish Harami at 50 DMA

DJIA + 86.90, +1.15% SP500 + 10.33, +1.31% NASDAQ Comp. + 26.79, +1.78% Russell 2000 + 6.78, +1.63% Exchange NYSE NASD Advancing 2,819 1,901 Declining 912 886 Oil $49.90 +$1.49 Gold $922.60 +$7.10 SOX 230.91 +1.46 VIX 44.14 -1.40 The VIX moved down and did confirm the move up in the SPX on Tuesday. Strongest Sectors: XLF +5.51%...XLK +1.89%...XLU +1.03% Weakest Sectors: XLE -0.85%...XLP -0.19%...XLV +0.37% The Financial sector which was the weakest sector on Monday rallied leading the broad market higher on Tuesday. XLF rose 5.51% Strong financial stocks that gained more than 5.51% on Tuesday included: BAC, SPG, STT, AFL, PNC, C, RF, BK, KEY, SCHW, JPM, WFC, AXP, IVZ, USB, MET, PRU, GS and ETF’s FAS and UYG. Sector Watch Up Trending: Sideways: XLE, XLY, XLV, XLK, XLB Down Trending: XLF, XLP, XLI, XLU Today the SPX formed an inverted hammer/bullish harami. Both are trend reversal patterns that require confirmation...a close above the body of the inverted hammer. From a short term traders perspective that confirmation is impportant. The disappointment in Tuesday's rally was the selloff at the end of the day that formed the upper shadow of the inverted hammer. While buyers had control for the day, sellers had control and the end of the day. (click on image to enlarge) On Wednesday if the day starts with sellers in control, watch the key support areas of: 787 - 790 - Monday's close & Tuesday's open 779 - Monday's low. These are areas of short term importance. If price action breaks below this area 766 - 772 is the next area of support. Remember if price breaks below an area of support it is likely to fall to the next suppor level. If short term support holds look for a rally and confirmation of the inverted hammer. The SPX finished March with its best month from open to close and from low to close in over five years. Perhaps even more telling about what we might expect is the piercing line pattern on the monthly 5 year chart. The Piercing Line pattern is a bullish reversal pattern. With the strong down trend of the past 18 months the March candle is by far the most bullish candle in that time frame. However one month is not a trend, so the month of April becomes very important to see if the SPX continues to move higher or if the SPX simply has a trend change from down to sideways. (click on image to enlarge) Index Commentary The DJIA formed an inverted hammer/bullish harami…closed above 20, 30 and 50 DMA The SPX formed an inverted hammer/bullish harami…closed above 20, 30 and 50 DMA The Nasdaq formed an inverted hammer, closed above the high of the low day…closed above 20, 30 and 50 DMA The RUT formed an inverted hammer/bullish harami…closed above 20, 30 and 50 DMA At the Open on Wednesday SPY – doji SNDA – confirmed hammer rose to horizontal resistance DECK – confirmed hammer CTSH – confirmed hammer CRM – bullish harami NFLX – rose to horizontal resistance GME – rose to horizontal resistance WYNN – bullish harami ILMN – confirmed dragon fly doji SCHN – bullish harami MHS – closed above 30 DMA GILD – closed above 30 DMA Stocks to Watch on Wednesday Leading Stocks: Holding Above 30 DMA BIDU, CLB, BKC, NFLX, DLTR, HANS, ICE, ALGT, DLB, JEC, PWR, VPRT, AMZN, MON, USD, AAPL, CTSH, FLS, JOYG, APEI, AXYS, BAP, CAM, GMCR, GPRO, JCOM, JOSB, MUR, PETS, WMT, ATW, GR, BIIB, SLGN, SWN, SYNA, SNHY, EBAY, GES, SNA, ORCL, WRC, DECK, HDB, PCP, UYG, BLUD, FSLR, GME, ESI, WCG, RIMM, X, BDX, BYI, CBST, EZPW, HLF, MYGN, STRA, MCD Moving Above 30 DMA = 6 AMX, GILD, MHS, WAB NIHD, FAS Moving Below 30 DMA = 3 DV, MOS, RCI Staying Below 30 DMA CHL, JW.A, NTLS, PCLN, ACN, PPD, RBN, ESRX, PSYS, TDG, SPWRA, AMED, GXDX, VAR, PCR, K, AFAM Tuesday’s Action Moving Up: Doji – BIDU, CF, MS, Broke High of Low Day – GOLD, AFAM, CLF, ESRX, INFY, KRE, GS, NDAQ, KBE Bullish Harami – IPI, SCHN Moving Down: Lower High, Lower Low – POT, MOS, X, CNX, NEM Doji – FSLR Higher Low – PCLN, STRA Intermediate Term Market Trend: Neutral – SPX, Nasdaq, RUT Down – DJIA Short Term Market Trend: Neutral

Futures Point to Higher Open

1:52 pm ET - The SPX is up 15 points to 803 and currently forming a bullish harami on the daily chart...of course the candle is not closed and change form by the end of the trading day... (click on image to enlarge) Our AT Webcast virtual trade SNDA, which was a buy stop (if stock rises 37.25) limit (2.25) on 10 May 40 calls filled at 7:31 at 2.15. Currently is at 3.30 or just over 50% on the call options. (click on image to enlarge) 11:35 am ET - ES +9, NQ +14 and the SPX +9 are all trading higher Tuesday morning. Our real time vitural trades on SNDA and DECK from Monday nights AT Webcast filled Tuesday morning. As stated we are using the recent pull back as an opportunity to enter additional positions in our Model Portfolio. (click on image to enlarge) Learn The Discipline We have added 24 positions this morning in the Model Portfolio. These are done in a real time virtual account and done at the real time trading price at the time the orders are filled. (click on image to enlarge) http://chartsignals.blogspot.com/2009/02/coming-next-week_07.html BMO - ES +8 and NQ +12 futures are higher in pre-market trading pointing to a higher open. If the cash markets open higher and continue to move higher, Monday could be the low day in a two day pull back, so watch for a break of the high of the low day. At the Open on Tuesday SPY – lower high, lower low SNDA – hammer DECK – hammer UNP – confirmed bearish harami CTSH – hammer X – lower high, lower low at 30 DMA DLB – confirmed bearish harami CRM – lower high, lower low NFLX – bullish engulfing GME – harami ISRG – broke bearish pennant down WYNN – lower high, lower closed below 20 DMA ILMN – dragon fly doji

Bearish Harami Confirmed

DJIA - 254.16, -3.27% SP500 - 28.41, -3.48% NASDAQ Comp. - 43.40, -2.81% Russell 2000 - 13.03, -3.04% Exchange NYSE NASD Advancing 513 650 Declining 3,276 2,098 Oil $48.41 -$3.97 Gold $915.50 -$7.70 SOX 229.45 -10.62 VIX 45.54 +4.50 The VIX moved up and did confirm the move down in the SPX on Friday. Strongest Sectors: XLV -0.58%...XLU -1.98%...XLP -2.17% Weakest Sectors: XLF -8.64%...XLI -4.98%...XLY -2.99% Sector Watch Up Trending: Sideways: XLE, XLY, XLV, XLK, XLB Down Trendin: XLF, XLP, XLI, XLU Stocks moved lower on Monday confirming Friday's bearish harami. Generally stocks moved lower on below average volume which is generally a bullish indication. There was a late rally that trimmed the loss for the day. ES and NQ futures are trading higher in over night trading. Selling appeared to be driven by the surprise that the government was asking the GM CEO to step. This type of news generally has a short lived impact. Be alert on Tuesday to see if Monday's late buying carries over to Tuesday morning. If up trending stocks break the high of the low day, which is Monday, this would be an entry signal for some short term traders. NQ futures reached the intraday triple bottom price target and a late horizontal breakout during after-markte trading. Again showing that pattern targets have value for the technical trader. (click on image to enlarge)

Index Commentary The DJIA confirmed Friday’s bearish harami closed below 50 DMA…above 20 and 30 DMA The SPX confirmed Friday’s bearish harami closed just below 50 DMA…above 20 and 30 DMA The Nasdaq broke through the low of the high day and moved lower…closed above 20, 30 and 50 DMA The RUT confirmed Friday’s bearish harami…closed below 50 DMA…above 20 and 30 DMA At the Open on Tuesday SPY – lower high, lower low SNDA – hammer DECK – hammer UNP – confirmed bearish harami CTSH – hammer X – lower high, lower low at 30 DMA DLB – confirmed bearish harami CRM – lower high, lower low NFLX – bullish engulfing GME – harami ISRG – broke bearish pennant down WYNN – lower high, lower closed below 20 DMA ILMN – dragon fly doji

(click on image to enlarge)

(click on image to enlarge)

Stocks to Watch on Tuesday Leading Stocks: Holding Above 30 DMA BIDU, CLB, BKC, NFLX, DLTR, HANS, ICE, ALGT, DLB, JEC, PWR, VPRT, AMZN, MON, AAPL, CTSH, FLS, JOYG, APEI, AXYS, BAP, CAM, GMCR, GPRO, JCOM, JOSB, MUR, PETS, WMT, ATW, GR, BIIB, SLGN, SWN, SYNA, SNHY, EBAY, GES, RCI, SNA, ORCL, WRC, DECK, HDB, MOS, PCP, UYG, BLUD, FSLR, GME, ESI, WCG, RIMM, X, BDX, BYI, CBST, EZPW, HLF, MYGN, STRA, MCD Moving Above 30 DMA = 0 DV Moving Below 30 DMA = 8 AMX, CHL, JW.A, NTLS, PCLN, WAB, NIHD, FAS Staying Below 30 DMA ACN, PPD. RBN, ESRX, PSYS, GILD, MHS, TDG, SPWRA, AMED, GXDX, VAR, PCR, K, AFAM Monday’s Action Moving Up: ESRX Hammer - STRA Moving Down: Eve Star - JASO Confirmed Friday’s Harami – CLF, KMT, COH, LAMR, BRCM, POT, MOS, SCHN, GRMN, Outside Day – NEM, GG, AEM Lower High, Lower Low – BIDU, ADM, GOLD, GDX, HANS, CF, IPI, CNX, KRE, GS, X, AGU, ANR, NDAQ, KBE, MEE Doji – PCLN, DRYS, GLD Hammer – AFAM, FSLR, BTU, FWLT

Futures Point to a Lower Open

So what do you think of Chartsignals like intraday triple bottoms now? Four minutes before the cash close the NQ hit the triple bottom target...if this is your first read today...check our earlier entry... 2:14 pm ET - The comments looked unanimous, 1,220 intraday chart price target. As you can see the NQ made it to 1,1725 and then rolled over. We'll wattch to see if NQ achieves the price target or not. It certainly appears that 1,204 is solid support at least for now. Now...for the next question...If NQ breaks 1,204 what would be the chart price target? If you know the answer post it in the Comments... (click on image to enlarge) Here's what I'm referring to on the NQ...Do you know the intraday chart price target for this formation? If you think you do, post your answer in the comments and I'll let you know later in the day... (click image to enlarge) 12:18 am ET - ALERT - NQ futures have made an intraday triple bottom and are at 1,212 resistance for a potential intraday resistance breakout... 11:48 am ET - A couple of observations about this morning's rollover...First we put you on Yellow Alert on Friday due to the price action and appearance of the bearish harami on a large number of charts...so you should have been prepared...obviously every trader has a unique set of trading rules on how they exit bullish trades and enter bearish trades and whether they use intraday or end of day entries and exits. Second, based on financial media reports this selling seems to be fueled by the adminstrations intervention with the auto industry...apparently traders are a little sensitive about a lender forcing out a CEO...while it is not really necessary to wax philosophical about this development at the moment...I want to remind everyone that economic news almost never alters the intermediate term trend of the market...so expect this news to have a short term impact on price action and stay focused on trend, support and resistance and momentum 11:30 am ET - Below is the SPX chart showing Friday's bearish harami and intraday confirmation after two hours of trading...you likely are seeing many individual stock charts that look very similar... (click image to enlarge) 10:35 am ET - ES 787 support just broken, next short term support area, last Monday's low 775 to 777 area 10:30 am ET - ES 15 minute chart, buyers giving support in the 787 area...last Wednesday's intraday low... (click on chart to enlarge) 10:15 am ET - SPX has found momentary support at the 50 DMA of 790...the ES has found some buying at Wednesday's intraday low in the 787 area... 9:55 am ET - Intraday ES Resistance 15 min. S1 = 791, S2 = 794, S3 = 795 9:45 am ET - Cash SPX -24 follows future down SPX short term support areas: 50 DMA = 790, Mar 23 S1= 797, S2 = 772 BMO - ES -22 and NQ -24 point to a lower open. As we mentioned Friday watch for bullish exit and bearish entry opportunities on stocks and etf's that have peaked and are showing signs of short term reversal. At the Open on Monday SPY – bearish harami SNDA – confirmed Thursday’s bearish harami DECK – broke the low of the high day UNP – bearish harami CTSH – support bounce failed, gapped down to new low X – lower high and lower low at 50 DMA DLB – bearish harami at 35 horizontal resistance CRM – pull back after support bounce on Thursday JASO – white spinning top after horizontal breakout GME – rallied on down market day ISRG – forming bearish pennant WYNN – lower high and lower low at 30 DMA

Learn the Discipline

The Model Portfolio opened three new positions on Tuesday and Wednesday in X, DECK and ESI. None of the existing positions were stopped out this week and all 10 open positions are profitable. The portfolio is about $22,000 of the $152,000 portfolio in stocks and the balance is in cash. As stated last week, now that the market has changed to a more neutral intermediate term trend from from down and we will use a pullback opportunity to a higher low to become more invested. With the bearish harami in the indices and many stocks on Friday, this week might present the opportunity to do just that. (click on image to enlarge)

Bearish Harami Friday...

DJIA - 148.38, -1.87% SP500 - 16.92, -2.33% NASDAQ Comp. - 41.80, -2.63% Russell 2000 - 16.30, -3.66% Exchange NYSE NASD Advancing 919 693 Declining 2,815 2,081 Oil $52.38 -$1.96 Gold $923.20 -$16.80 SOX 240.07 -5.10 VIX 41.04 +0.68 The VIX moved up and did confirm the move down in the SPX on Friday. Strongest Sectors: XLP -0.96%...XLU -1.00%...XLV -1.06% Weakest Sectors: XLF -3.08%...XLE -2.97%...XLY -2.66% Sector Watch Up Trending: Sideways: XLE, XLY, XLV, XLK, XLB Down Trending: XLF, XLP, XLI, XLU The broad indices were confined to a tight trading range on Friday with many stocks forming a bearish harami. This gives us a setup to look for potential short term exits on profitable bullish trades on Monday and potential entry into bearish trades. For this setup a trader typically will wait for the pattern confirmation. Since every trader is different, follow your rules. Just be aware that it is Yellow Alert again on Monday. Also many stocks have been consolidating in horizontal pattern between their 30 and 50 DMA, if this pattern slips below the 30 DMA, that will signal a short term change from sideways to down. The ES which moved down over night opened on Friday at 9:30 am ET at 816.75 and closed at 4:15 pm ET at 815.50. From open to close a net change of -1.25. Yes Friday turned into a classic trading range day that formed a bearish harami on the ES daily chart and many other individual stock charts...more to follow... Index Commentary – Yellow Alert The DJIA formed a bearish harami The SPX formed a bearish harami The Nasdaq formed a black candle with a lower high and lower low that closed at the low of the high day The RUT formed a bearish harami At the Open on Monday SPY – bearish harami SNDA – confirmed Thursday’s bearish harami DECK – broke the low of the high day UNP – bearish harami CTSH – support bounce failed, gapped down to new low X – lower high and lower low at 50 DMA DLB – bearish harami at 35 horizontal resistance CRM – pull back after support bounce on Thursday JASO – white spinning top after horizontal breakout GME – rallied on down market day ISRG – forming bearish pennant WYNN – lower high and lower low at 30 DMA Market Becoming Healthier Difference of opinion is what allows a market to work. In order to have a healthy stock market there must be both buyers and sellers. To have buyers and sellers there must be a difference of opinion. Without the difference of opinion that buyers and sellers have, a market becomes inefficient and unhealthy. At the extreme it would be locked; no buying or selling. Some commodity markets do in fact have limit moves and the trading is locked up and no sell orders are allowed even though there may be willing buyers and sellers beyond the daily limit. For example if everyone used the same buy signal to buy, when that buy signal did appear everyone would want to buy. If everyone wanted to buy, who would sell to them? No one would. Why? Because the traders who normally had a different opinion and did the selling would not want to sell because the buy signal appeared and they want to buy, not sell. The inverse would also be true if everyone used the same sell signal. When the sell signal did appear everyone would want to sell. If everyone wanted to sell, who would buy from them? No one would. Why? Because the sell signal appeared and those who might normally buy, want to sell not buy. The reality is everyone doesn’t use the same buy signal and the same sell signal. That is good, that improves efficiency and that is healthy. In the market every day there are buyers and there are sellers. When there are buyers that are willing to buy from a seller that is healthy. When someone wants to sell because they want to take a short term profit, they want cash, they found a better stock to buy, they want to put the money in real estate or they want to short the stock because they believe the stock will go down in the short term, it is healthy when a buyer has the opinion if I buy now I believe I will make money. Maybe the seller is looking over the next three days for the stock to go down and the buyer is looking over the next three months for the stock to go up. The reason the buyer buys when someone sells is not important. What is important is that the buyer that buys from the seller helps create an efficient healthy market. Recently we have had periods where buyers were scarce and prices fell precipitously, those were very unhealthy markets. Periods such as October 1 to 10, 2008, November 5 to 20, 2008, January 7 to 20, 2009 and February 10 to March 5, 2009 are examples of very unhealthy markets. The past three weeks, March 6 to 27, 2009 is an excellent example of the market becoming much healthier. Not because it went up, rather because buyers have appeared when sellers wanted to sell. Look at March 6, 9, 11, 13, 16, 19, 20, 24, 25 and today March 27. These are all days were sellers sold and buyers bought. Because the buyers were in the market in adequate size the markets paused, pulled back modestly and once the sellers were absorbed by the buyers, the up trend resumed. This is normal and healthy price consolidation. (click on image to enlarge) Notice on the SPX chart, which is the cash market, that eight of the last 14 days are consolidation days; days where sellers controlled the day enough to keep the trend from moving significantly higher or the trend actually pulled back. Sellers were selling and buyers were buying enough to maintain an orderly market. That means only six of these 14 days were strong up trend days. Why is this healthy consolidation and why did the up trend resume? This was healthy consolidation and the up trend resumed because there is a lot of cash on the sidelines that normally would have already been in the market, from 18 months of selling. That money wants to be in the market when its managers perceive that it is more likely than not that stock values will increase over the next several weeks to several months. In other words, the consolidations on these dates were perhaps smaller than they may have been at other times as a direct result of the high level of selling and the high level of cash that the selling had created. I have often referred to the “battle” between buyers and sellers at support and resistance levels. I have compared this battle to tug of war with a rope that most of us have either participated in or watched at some point in our life. I have also compared it to an arm wrestling match. In both the tug of war and the arm wrestle the opponents battle it out; back and forth the match goes until ultimately one side wins. In the stock market when price moves to a support or resistance level, buyers and sellers battle it out and price goes back and forth until ultimately one side wins. The fact that buyers keep appearing when sellers sell is a very healthy market and indicates a healthy difference of opinion. This is what happened on Friday. The futures dropped over night and the cash market opened down. Prices then fell, rose, fell, rose, fell and rose. Another way to say is sellers, buyers, sellers, buyers, sellers and buyers. (click on image to enlarge) On balance who was in control on Friday from Thursday’s close? Sellers Who was in control at the end on Friday? Buyers Was there a battle going on Friday between sellers and buyers? Yes Is it healthy for there to be a difference of opinion in the market? Yes Is it healthy for sellers to be able to exit their trades without the bottom of the market falling out? Yes Are the buyers stupid, bad, evil or creating an unhealthy market? No, they are trading based on their market perception and in fact their difference of opinion creates a more efficient and healthy market. So the next time you go to sell and someone is actually willing to make a market and buy your asset (stock, option, futures or FX) without dropping the price, express gratitude for an efficient and healthy market. The market is getting healthier and that is good for you, me and every other trader regardless of their market opinion. In a future post I will discuss this healthy market concept and how it relates to volatility. Yes, you guessed it…the fact that volatility is dropping is another factual piece of evidence that the market is becoming healthier. Stocks to Watch on Monday Leading Stocks: Holding Above 30 DMA BIDU, CLB, BKC, NFLX, DLTR, HANS, ICE, ALGT, DLB, JEC, PWR, VPRT, AMZN, MON, AAPL, CTSH, FLS, JOYG, AMX, APEI, AXYS, BAP, CAM, GMCR, GPRO, JCOM, JOSB, MUR, PETS, WMT, ATW, GR, BIIB, SLGN, SWN, SYNA, SNHY, EBAY, GES, RCI, SNA, ORCL, WRC, DECK, HDB, MOS, PCP, UYG, BLUD, PCLN, FAS, FSLR, GME, ESI, WCG, RIMM, NIHD, X, BDX, BYI, CBST, EXPW, HLF, JW.A, MYGN, STRA, MCD, CHL, CPLA, NTLS, WAB Moving Above 30 DMA = 0 Moving Below 30 DMA = 1 ACN Staying Below 30 DMA PPD. RBN, ESRX, PSYS, GILD, MHS, TDG, SPWRA, AMED, GXDX, DV, VAR, PCR, K, AFAM Friday’s Action Moving Up: DRYS, JASO, IPI Moving Down: Bearish Harami - STRA, PCLN, HANS, FSLR, LAMR, KMT, CLF, COH, BRCM, MOS, GRMN, SCHN, POT Confirmed Thursday’s Harami - BIDU, GS, BTU Eve Star - GDX, AEM, GG, INFY Lower High, Lower Low - NEM, GLD, ADM, ESRX, EBAY, ANR, AGU, FWLT, NDAQ, X, KBE, CNX, KRE Inside Day - AFAM, CF, MEE Intermediate Term Market Trend: Neutral – SPX, Nasdaq, RUT Down – DJIA Short Term Market Trend: Neutral

Futures Point to Lower Open

1:40 pm ET - mired in a trading range the ES returned to early lows around 812 and is now bouncing up again around 815...pretty classic trading range so far today with not convincing breakout of support or resistance from the first hour...there was an attempt to move higher from 11 to 12 but buyers just ran out of buying... SPY, SNDA, OSG, CTSH CRM, WYNN and ISRG are still down by 1 point or more...GME is now up 1 point...JASO is even...X and DLB are down less than 1 point 12:05 pm ET - Have you let me know your read on the ES chart below? Ray asked a very good question in the comments area...I think there is a major BGO in the making...Read my reply to Ray in the Comments... 11:25 am ET - Here's the ES since the open 9:30 ET...Who's in control? Let me know what you think... (click on image to enlarge) 10:56 am ET - ES rallies from 812 to 818...continues to bounce inside of first hour trading range...looking for break and direction outside of trading range...if no break look for price to fall back towards support... 10:22 am ET - ES rallies back above 813...first hour narrow trading range of 812 to 818... 10:15 am ET - SPY, SNDA, OSG, CTSH, X, CRM, ISRG are lower by 1 point or more...GME is up 40 cents...JASO, DLB and WYNN are down less than 1 point 10:10 am ET - ES breaks below 813... On the economic front consumer spending fell -0.2% in February in line with expectations of -0.2%... 9:49 am ET - ES futures since the open have traded in a tight range between 813 - 817...watch for a break of this range for early morning direction 9:34 am ET - Ths SPX opens down and currently is down 12 points...Thursday's low of 814 is key short term support along with the 800 level...Support on the ES is the 813 area...next support area 803 BMO - ES -11 and NQ -17 futures are down in pre-market trading about 20 minutes before the open. This points to a lower open. If the cash markets move lower watch yesterday's low as short term support level. If the market does roll today look for stocks that are relatively weaker for movement to the downside. At the Open on Friday SPY – white spinning top, new high close SNDA – bearish harami OSG – confirm bullish harami, bull flag CTSH – confirm bullish harami, bull flag X – inside day at 50 DMA DLB – confirm hammer, bull flag close above 200 DMA CRM – confirmed hammer, bull flag JASO – large white candle, horizontal breakout GME – bearish engulfing ISRG – at 30 DMA resistance WYNN – doji above 30 DMA

DJIA + 174.75, +2.25% SP500 + 18.98, +2.33% NASDAQ Comp. + 58.05, +3.80% Russell 2000 + 18.78, +4.40% Exchange NYSE NASD Advancing 2,995 2,257 Declining 775 525 Oil $54.34 +$1.57 Gold $940.00 +$4.20 SOX 245.17 +13.68 VIX 40.36 -1.89 The VIX moved down and did confirm the move up in the SPX on Thursday. Strongest Sectors: XLI +5.36%...XLY +4.61%...XLB +4.00% Weakest Sectors: XLE +0.86%...XLP +1.11%...XLV +1.11% Sector Watch Up Trending: Sideways: XLE, XLY, XLV, XLK, XLB Down Trending: XLF, XLP, XLI, XLU Stocks opened higher and rose throughout the day forming a new high day on each index. All four indices closed near the highs for the day. Thursday's low becomes the new short term support level. Stay with the up trend unless price drops below today’s low. The Nasdaq has recovered all of its recent drop from its February high, except for 11 points and ended the day +10 point YTD. XLI was the strongest sector as it broke through its 50 DMA. The Financial sector fell in the middle of the pack on Thursday with a modest XLF 1.18% gain. Strong financial stocks that gained more than 1.18% on Thursday included: AXP, IVZ, TROW, ICE, SPG, SCHW, AFL, USB, ZION, CME, MET, PRU, ALL, JPM, KEY, BK and ETF’s UYG and FAS. Index Commentary The DJIA formed a large white candle with a new high close The SPX formed a large white candle with a new high close The Nasdaq formed a large white candle that moved to within 11 points of its Feb 10 high essentially retracing 100% of its recent four week down trend and forming a V bottom…near horizontal resistance of its sideways trend since November…new high close…the Nasdaq is up 10 points for 2009 The RUT formed a large white candle…new high close…hit its 78.6% Fib retracement from its Feb 6 high At the Open on Friday SPY – white spinning top, new high close SNDA – bearish harami OSG – confirm bullish harami, bull flag CTSH – confirm bullish harami, bull flag X – inside day at 50 DMA DLB – confirm hammer, bull flag close above 200 DMA CRM – confirmed hammer, bull flag JASO – large white candle, horizontal breakout GME – bearish engulfing ISRG – at 30 DMA resistance WYNN – doji above 30 DMA Stocks to Watch on Friday Leading Stocks: Holding Above 30 DMA BIDU, CLB, BKC, NFLX, DLTR, HANS, ICE, ALGT, DLB, JEC, PWR, VPRT, AMZN, MON, AAPL, CTSH, FLS, JOYG, AMX, APEI, AXYS, BAP, CAM, GMCR, GPRO, JCOM, JOSB, MUR, PETS, WMT, ATW, GR, BIIB, SLGN, SWN, SYNA, ACN, SNHY, EBAY, GES, RCI, SNA, ORCL, WRC, DECK, HDB, MOS, PCP, UYG, BLUD, PCLN, FAS, FSLR, GME, ESI, WCG, RIMM, NIHD, X, BDX, BYI, CBST, EXPW, HLF, JW.A, MYGN, STRA, MCD Moving Above 30 DMA = 4 CHL, CPLA, NTLS, WAB Moving Below 30 DMA = 0 Staying Below 30 DMA PPD. RBN, ESRX, PSYS, GILD, MHS, TDG, SPWRA, AMED, GXDX, DV, VAR, PCR, K, AFAM Thursday’s Action (=> +$0.70 or -$0.70) Moving Up: FSLR, STRA, MA, POT, MON, PNRA, PCLN, V, BIDU, MOS, V, SCHN, GRMN, X, ANR, ONXX, LAMR, CLF, INFY, JASO, BRCM, HANS, NEM, IPI, KMT, CF, SOHU, CNX Moving Down: GS, Intermediate Term Market Trend: Neutral – SPX, Nasdaq, RUT Down – DJIA Short Term Market Trend: Up

Futures Are Higher Before the Open

SPX is breaking to new highs hitting 832 as it continues the current trend up since the March 6 low. Stay with the trend until the end... BMO - ES +10 and NQ +20 future are trading higher with a little more than an hour to go before the cash markets open. If the cash markets open higher, watch if the they break Wednesday's highs for indication that the short term up trend is likely to continue. On the downside the key short term support is still the S1 level of Monday's large white candle. We'll have Great Questions, Great Answers this morning so check back... At the Open on Thursday SPY – hanging man, buyers at 50 DMA MS – hanging man above 200 DMA ESS – doji on 30 DMA GS – hanging man at 200 DMA SNDA – large white candle, +5.29% OSG – bull flag CTSH – bull flag LEAP – bearish engulfing above 200 DMA X – spinning top after reaching $25.08 double bottom price target DLB – bull flag at 200 DMA CRM – hammer, bull flag AMED – double bottom, bullish divergence stochastic

Great Questions, Great Answers (email us at chartsignals@yahoo.com with your technical market questions) Eric asks… Seems like the price action today (Wed March 25) is a cautious one, knee-jerk short covering and then a leg in back to the short market. Also seems like everyone is waiting for tomorrow’s big GDP day. As we come closer to the end of the quarter, what should I expect with this quacky market? If it were totally bearish, I’d expect the fundies to dump some bad performing stocks. And if this now seen as a slightly bullish market, I would expect some end of the quarter buying in some of the good names. In either case I expect some selling to start on Wed of next week. Need some sanity in this insane world…sanity check please. Am I getting close or totally off base? Dave answers… Wednesday’s action I’m sure included both shorting and short covering…however if one really studies the short data that is released every two weeks it should be clear that short activity was likely a small minority of total activity. It is much more likely real cash buyers and sellers created the majority of the buy and sell transactions on Wednesday. Since the DJIA volume increased to 454.1 million shares up from 379.5 million shares on Tuesday, it is clear that not everyone was waiting for Thursday…someone may be, but not everyone. While it is true that the market has been more volatile during the past twelve months than it was during the prior four years due in large measure to the economic and financial challenges in America and the world, this market does not appear quacky to me, but rather it seems is quite similar to past bear market lows in 1974, 1987 and 2002 – 2003. Panic selling seems to have pushed this market to oversold lows and as financial and economic data has been released over the past two and a half weeks, showing that economic estimates had become excessively pessimistic and inaccurate, that cash laden investment firms have been taking advantage of extremely low stock valuations to buy. In 32 years I have never heard a financial professional use the term “fundies” so I’m guessing you mean mutual funds, if so, it seems that they have been “dumping” for 18 months and likely completed the majority of their “dumping” by March 6. While funds are always buying and selling and some “window dressing” always occurs at the end of a calendar quarter, I would expect this to be a minor factor after 18 months of aggressive selling. If by good names you mean stocks that are in up trends, it seems that mutual funds are not waiting for the end of the quarter but actually became aggressive in their buying beginning on March 10. I like your confidence in picking next Wednesday as the day selling will start. From my view I think sellers were in control last Thursday, Friday, Tuesday and part of Wednesday (yesterday), but that on balance buyers have been in control for two and a half weeks. While it would be presumptuous for me to pretend that I can tell you or anyone else, what day sellers will overwhelm buyers and this market will pull back, I do know that when sellers do take control, prices will break support and then fall to a lower support level where buyers will take control back from the sellers. I know what that looks like on a stock chart and I am prepared for that every single day. I hope you and every reader of Chartsignals will be too! Aloha

An Outside Day with a Higher Close

DJIA + 89.60, +1.17% SP500 + 7.63, +0.95% NASDAQ Comp. + 12.43, +0.82% Russell 2000 + 9.74, +2.34% Exchange NYSE NASD Advancing 2,482 1,935 Declining 1,274 838 Oil $52.77 -$1.21 Gold $935.80 +$12.00 SOX 231.49 +2.68 VIX 42.25 -0.68 The VIX moved down and did confirm the move up in the SPX on Wednesday. Strongest Sectors: XLF +3.33%...XLP +0.98%...XLB +0.90% Weakest Sectors: XLE -0.48%...XLU -0.04%...XLK +0.57% Sector Watch Up Trending: Sideways: XLE, XLY, XLV, XLK, XLB Down Trending: XLF, XLP, XLI, XLU Wow...did you have fun with Wednesday's roller coaster? Stocks opened flat and immediately started to rise with each of the four indices making new highs fueled by better than expected durable goods orders and new home sales. Profit taking seemed to be preceded by comments from Janet Yellen, President of the San Francisco Federal Reserve Bank regarding her view on the threat of deflation and economic recovery. A late rally regained much of intraday pull back. The indices formed outside day bearish harami spinning tops which can be a sign of potential short term reversal if confirmed. The positive side is the close above the 50 DMA and Monday’s S1 short term support level. We continue to stay with the short term up trend while also maintaining our Yellow Alert for a potential short term reversal. (See our comments on this from Tuesday). Be prepared to go with the market up or down. The Financial sector was again the strongest sector. XLF rose 3.33%. Strong financial stocks that gained more than 3.33% on Wednesday included: JPM, USB, BAC, MET, NTRS, WFC, TROW, BK, CME, RF, SCHW and ETF's UYG and FAS. Index Commentary All four indices formed an unconfirmed bearish harami outside day… The DJIA formed a white spinning top, outside day, that closed above the 50 DMA for the third straight day The SPX formed a white spinning top, outside day, that closed above its 50 DMA The Nasdaq formed a doji, outside day, that closed above its 50DMA The RUT formed a white spinning top, outside day, closed above its 50 DMA At the Open on Thursday SPY – hanging man, buyers at 50 DMA MS – hanging man above 200 DMA ESS – doji on 30 DMA GS – hanging man at 200 DMA SNDA – large white candle, +5.29% OSG – bull flag CTSH – bull flag LEAP – bearish engulfing above 200 DMA X – spinning top after reaching $25.08 double bottom price target DLB – bull flag at 200 DMA CRM – hammer, bull flag AMED - double bottom, bullish divergence stochastic Stocks to Watch on Thursday Leading Stocks: Holding Above 30 DMA BIDU, CLB, BKC, NFLX, DLTR, HANS, ICE, ALGT, DLB, JEC, PWR, VPRT, AMZN, MON, AAPL, CTSH, FLS, JOYG, AMX, APEI, AXYS, BAP, CAM, GMCR, GPRO, JCOM, JOSB, MUR, PETS, WMT, ATW, GR, BIIB, SLGN, SWN, SYNA, ACN, SNHY, EBAY, GES, RCI, SNA, ORCL, WRC, DECK, HDB, MOS, PCP, UYG, BLUD, PCLN, FAS, FSLR, GME, ESI, WCG, RIMM, NIHD, X Moving Above 30 DMA = 9 BDX, CBST, MCD, MYGN, JW.A, HLF, STRA, BYI, EZPW Moving Below 30 DMA = 0 Staying Below 30 DMA NTLS, PPD. RBN, WAB, CPLA, ESRX, PSYS, CHL, GILD, MHS, TDG, SPWRA, AMED, GXDX, DV, VAR, HLF, PCR, K, AFAM Wednesday’s Action (=> +$0.70 or -$0.70) Moving Up: FSLR, STRA, AFAM, GS, MA, NEM, AEM, GOLD, GDX, GG, GLD, CF, CLF, MS, SCHN Moving Down: BIDU, NUE, BTU, CNX, V, BRCM, HANS, DRYS Intermediate Term Market Trend: Neutral – SPX, Nasdaq, RUT Down – DJIA Short Term Market Trend: Up

BMO - ES +1.75 and NQ +0.50 futures are up slightly in pre-market trading about an hour before the open, indicating a flat opening. If cash markets open near Tuesday's close and move higher look for a resumption of the short term trend. If they move lower and break short term support levels, break the low of the high day or inside day look for a continuation of Tuesday's pull back. We'll be watching the following stocks: At the Open on Wednesday – SPY – bearish harami VNO – spinning top, consolidation at 30 DMA ARO – confirmed bullish harami/hammer MS – shooting star at horizontal resistance ESS – consolidation at 50 DMA GS – shooting star doji at 200 DMA resistance SNDA – breakout close above 37 horizontal resistance OSG – close below low of high day above low of bearish engulfing CTSH – moves lower in bull flag LEAP – white spinning top new high close X – 30 DMA breakout…double bottom target $25.08

Stocks Pause Above Support

DJIA - 115.65, -1.49% SP500 - 16.67, -2.03% NASDAQ Comp. - 39.25, -2.52% Russell 2000 - 16.94, -3.91% Exchange NYSE NASD Advancing 1,221 819 Declining 2,565 1,923 Oil $53.98 +$0.18 Gold $923.80 -$28.70 SOX 228.81 -5.64 VIX 42.93 -0.30 The VIX moved down and did NOT confirm the move down in the SPX on Tuesday. Strongest Sectors: XLB -0.40%...XLP -0.47%...XLI -0.80% Weakest Sectors: XLF -4.80%...XLU -2.16%...XLE -1.89% Sector Watch Up Trending: Sideways: XLE, XLY, XLV, XLK, XLB Down Trending: XLF, XLP, XLI, XLU Monday was a new high day with a close above the 50 DMA on the SPX and other broad indices. Tuesday was a day of profit taking creating a slightly higher high on the SPX and DJIA. The Nasdaq and RUT formed an inside day and there were higher lows on all four indices. We now have what Dave calls a Yellow Alert. The market can either continue higher after today's pause or roll over. These are the days were the mental flexiblility that Dave continually refers to becomes absolutely essential. You need to be prepared, in advance, to go in either direction, just like the master chess player who adjusts to a low probability move by their opponent. Today's close near the low of the day gives some weight to the idea that the market could finally be ready for a short term pull back. If the index, ETF or stock trades below either the low of the high day or the inside day that can be a potential exit signal for a short bullish trade. It can also be an entry signal for a short term bearish trade. The positive side to Tuesday’s pull back was that price levels stayed at or above Monday’s S1 level and the 50 DMA (intermediate term trend) on the SPX many other charts. The chart looks like the beginning of a bull flag formation. If prices either move up or stay above S1 on Wednesday, it can be a bullish continuation. The Financial sector was the weakest sector after being the strongest sector on Monday. XLF lost -4.80%. Financial stocks that outperformed XLF included: MS, RF, AFL, GS, PRU, PNC, MMC, AOC, STT, ICE, C, TRV and IVZ. We continue to favor financials and their corresponding ETF’S XLF, UYG and FAS watch for next support bounce. Index Commentary The DJIA pulled back and closed at its 50 DMA …formed a small black candle and held well above Monday’s S1 short term support The SPX pulled back and closed above its 50 DMA and its 800 horizontal support…formed a small black candle above Monday’s S1 short term support The Nasdaq formed a bearish harami…unconfirmed…above its 50 DMA…and above Monday’s S2 and its 1,500 horizontal support level The RUT forms bearish harami, unconfirmed, as it closes near Monday’s S1 At the Open on Wednesday – several stocks in this list moved higher on Tuesday even though the market moved lower SPY – bearish harami VNO – spinning top, consolidation at 30 DMA ARO – confirmed bullish harami/hammer MS – shooting star at horizontal resistance ESS – consolidation at 50 DMA GS – shooting star doji at 200 DMA resistance SNDA – breakout close above 37 horizontal resistance OSG – close below low of high day above low of bearish engulfing CTSH – moves lower in bull flag LEAP – white spinning top new high close X – 30 DMA breakout…double bottom target $25.08 Stocks to Watch on Wednesday Leading Stocks: Holding Above 30 DMA BIDU, CLB, BKC, NFLX, DLTR, HANS, ICE, ALGT, DLB, JEC, PWR, VPRT, AMZN, MON, AAPL, CTSH, FLS, JOYG, AMX, APEI, AXYS, BAP, CAM, GMCR, GPRO, JCOM, JOSB, MUR, PETS, WMT, ATW, GR, BIIB, SLGN, SWN, SYNA, ACN, SNHY, EBAY, GES, RCI, SNA, ORCL, WRC, DECK, HDB, MOS, PCP, UYG, BLUD, PCLN, RBN, FAS, FSLR, GME, ESI, WCG, RIMM, NIHD Moving Above 30 DMA = 1 X Moving Below 30 DMA = 6 BDX, CBST, WAB, NTLS, MCD, PPD Staying Below 30 DMA MYGN, CPLA, ESRX, PSYS, CHL, GILD, MHS, TDG, SPWRA, AMED, GXDX, DV, VAR, JW.A, MUR, HLF, STRA, PCR, BYI, K, AFAM, EZPW Tuesday’s Action (=> +$0.70 or -$0.70) Moving Up: BIDU, SINA, CF, SCHN, X, SOHU Moving Down: STRA, NDAQ, PCLN, ESRX, V, INFY, KRE, MON, FSLR, ZION, GS, GLD, GDX, KBE, CNX, BRCM, NEM Intermediate Term Market Trend: Neutral – SPX, Nasdaq, RUT Down – DJIA Short Term Market Trend: Up

3:37 pm ET - The SPX has traded in a narrow range all day indicative of profit taking and buyers absorbing the selling that is occuring. Price is staying above both the 50 DMA and the Monday's S1. After the strong move of the past 10 trading orderly profit certainly is healthy. Once the end of day candles are formed we'll be back with our end of day analysis. BMO - ES and NQ futures are down in pre-market trading and point to a lower open. Look for pullback opportunities in up trend or bearish opportunities in down trends. At the Open on Tuesday - Monday's Change SPY – large white candle breakout, +7.18% VNO – large white candle support bounce, +14.24% ARO – bullish harami/hammer, +3.57% MS – bull flag support bounce break high of low day with large white candle, +20.7% ESS – bull flag support bounce large white candle, +14.8% GS – bull flag support bounce and breakout, +15.01% SNDA – bull flag support bounce, +7.16% OSG – no follow through on bearish engulfing, break above 30 DMA, +9.35% CTSH – no follow through to downside, +4.72% LEAP – no follow through on evening star, continues above 200 DMA, new high close, +7.99% X – double bottom breakout at 30 DMA

Gap Up and Breakout

8 am ET - very early Tuesday morning, Dave will be the instructor in a Basic Options Capstone webcast...he will teach Straddles and Strangles Monday's post was later today due to performing both an Advanced Options and an Advanced Technical webcast for a combined total of four and half hours+ this evening...Thank you for your patience! DJIA + 497.48, +6.84% SP500 + 54.38, +7.08% NASDAQ Comp. + 98.50, +6.76% Russell 2000 + 33.61, +8.40% Exchange NYSE NASD Advancing 3,411 2,335 Declining 445 451 Oil $53.80 +$1.73 Gold $952.50 -$3.70 SOX 234.45 +15.74 VIX 43.23 -2.66 The VIX moved down and did confirm the move up in the SPX on Monday. Strongest Sectors: XLF +16.40%...XLE +8.23%...XLI +7.25% Weakest Sectors: XLV +3.65%...XLU +3.87%...XLP +4.38% Sector Watch Up Trending: Sideways: XLE, XLY, XLV, XLK, XLB Down Trending: XLF, XLP, XLI, XLU Friday turned out to be the low day, on a two day pull back. News of a bad asset bank plan and better than expected existing home sales sparked a strong rally on Monday that broke above Friday's low and gave a new short term entry to the upside. The broad indices and many stocks had both a bull flag support bounce off of Friday’s low and a resistance breakout through Thursday’s high today, as you can see on many charts while forming large white candles. Keep in mind that the mid-section of a large white candle represents short term support. If prices pull back on Tuesday this will be a key area to watch. If prices either move up or stay above S1 it will be a bullish continuation sign. The Financial sector was the strongest sector again on Monday reversing Thursday and Friday’s weakness. XLF gained another +16.40%. Today’s bounce was the “higher low in this sector for the next entry opportunity” that we posted on in Friday’s post. Strong financial stocks that gained more than 16.4% included: PRU, BAC, JPM, WFC, KEY, PNC, STT, MS, C, SPG, USB, AXP, TROW, AFL, MET, ZION, BK and ETF's FAS and UYG. We continue to favor financials and their corresponding ETF’s and that is why we have listed the top stock performers here in our commentary section over the past several trading sessions. Index Commentary The DJIA closed above its 50 DMA and it 61.8% Fib retracement…formed a large white candle with a support bounce off its 30 DMA…today’s S1 is short term support The SPX closed above its 50 DMA and it 61.8% Fib retracement…formed a large white candle with a support bounce off its 30 DMA…today’s S1 is short term support The Nasdaq closed above its 78.6% Fib retracement as it bounced off its 50 DMA…today’s S1 is short term support The RUT closed above its 50 DMA and it 61.8% Fib retracement…formed a large white candle with a support bounce off its 30 DMA…today’s S1 is short term support At the Open on Tuesday SPY – large white candle breakout, +7.18% VNO – large white candle support bounce, +14.24% ARO – bullish harami/hammer, +3.57% MS – bull flag support bounce break high of low day with large white candle, +20.7% ESS – bull flag support bounce large white candle, +14.8% GS – bull flag support bounce and breakout, +15.01% SNDA – bull flag support bounce, +7.16% OSG – no follow through on bearish engulfing, break above 30 DMA, +9.35% CTSH – no follow through to downside, +4.72% LEAP – no follow through on evening star, continues above 200 DMA, new high close, +7.99% X – double bottom breakout at 30 DMA Stocks to Watch on Tuesday Leading Stocks: Holding Above 30 DMA BIDU, CLB, BKC, NFLX, DLTR, HANS, ICE, ALGT, DLB, JEC, PWR, VPRT, AMZN, MON, AAPL, CTSH, FLS, JOYG, AMX, APEI, AXYS, BAP, CAM, GMCR, GPRO, JCOM, JOSB, MUR, PETS, WMT, ATW, GR, BIIB, SLGN, SWN, SYNA, ACN, SNHY, EBAY, GES, RCI, SNA, ORCL, WRC Moving Above 30 DMA = 21 NTLS, DECK, HDB, MOS, PCP, MCD, UYG, BLUD, PCLN, PPD, RBN, FAS, FSLR, GME, ESI, WCG, RIMM, BDX, NIHD, CBST, WAB Moving Below 30 DMA = 0 Staying Below 30 DMA MYGN, CPLA, ESRX, PSYS, CHL, GILD, MHS, TDG, SPWRA, AMED, GXDX, DV, VAR, JW.A, MUR, HLF, STRA, PCR, BYI, K, AFAM, EZPW Monday’s Action (=> +$0.70 or -$0.70) Moving Up: GS, STRA, FSLR, MA, BIDU, POT, MON, MS, PCLN, CF, MOS, V, NUE, PNRA, CLF, KRE, CNX, BRCM, ONXX, SCHN, NDAQ, KBE, AGU, X, BTU, IPI, NIHD, ZION, INFY, ESRX, COH, KMT, SINA, GRMN, ANR, MEE, ADM, AFAM, HANS, EBAY, SOHU, LAMR, FWLT Moving Down: GLD Intermediate Term Market Trend: Neutral – SPX, Nasdaq, RUT Down – DJIA Short Term Market Trend: Up

Futures Point to Higher Open

2:10 pm ET - The ES rose to the 800 area four times and pulled back on the fifth time are around 1:15 it looked like it would break through...it rose to 802.25 and sellers pushed it back 10 points to 792.50. It is now consolidating aroung 796...watch to see if this is a lower high and the pull back continues or if it is ready to move to 800 again... 10:36 am ET - Stocks have remained strong in the first hour of trading...ES futures which opened at 783.50 are trading 10 points higher at 793.50, up a total of 29.50 points for the day. Buying strength is being attributed to the government's proposal to help remove bad assests from banks balance sheets. BMO - ES +17 and NQ +22 futures are higher in pre-market trading pointing to a higher open. We'll see how the cash market trades and look for entry signals on the charts. At the Open on Monday SPY – pulled back to 30 DMA VNO – 61.8% Fib retracement ARO – buyers at 20 DMA MS – pulled back to 50 DMA ESS – closed below 30 DMA GS – two day pullback SNDA – buyers at 20 DMA OSG – bearish engulfing CTSH – broke the low of the high day LEAP – evening star just above 200 DMA

Learn the Discipline

Learn the Discipline Week Seven Summary (click image to enlarge) All positions closed or stopped out this week are trading at or below their exit price except AMZN which rallied after being stopped out. We have been rather conservative in our risk exposure over the past several weeks because the market broke support and was down trending. During this time that approach paid off by outperforming the negative return of the SPX as we mentioned last week. If the market forms a higher low in its current pull back from Thursday's high, that is the point we will become more aggressive in getting the Model Portfolio more fully invested. Remember, we want to think like a Master Chess Player thinking several moves in advance.

Break the Low of the High Day

We have reached our valid sample size and are still accepting feedback today, if would like to email me at chartsignals@yahoo.com and tell me: What information in Chartsignals do you find useful right now? Thank you, Dave DJIA - 122.42, -1.65% SP500 - 15.50, -1.98% NASDAQ Comp. - 26.21, -1.77% Russell 2000 - 13.15, -3.18% Exchange NYSE NASD Advancing 911 884 Declining 2,735 1.866 Oil $51.06 -$0.55 Gold $956.20 -$2.60 SOX 218.71 -7.90 VIX 45.89 +2.21 The VIX moved up and did confirm the move down in the SPX on Friday. Strongest Sectors: XLV -0.59%...XLP -1.53%...XLU -1.78% Weakest Sectors: XLF -6.03%...XLE -4.40%...XLI -3.98% Sector Watch Up Trending: Sideways: XLE, XLY, XLV, XLK, XLB Down Trending: XLF, XLP, XLI, XLU We'll be back with Monday Stocks... Stocks broke the low of the high day and moved lower on options expiration on Friday. Gold, oil and semiconductors all moved lower. The strength of the rally of the past two weeks and the removal of some of the uncertainty regarding financial stocks indicates that big money has enough confidence to be buyers again. After the current profit taking comes to an end, if it is a higher low than the March 6 low, this will suggest that buyers are willing to pay higher prices off support and will be the launch for the next short term move up. We’ll watch for buyers to establish support. The Financial sector was the weakest sector again on Friday. XLF fell another -6.03%. Watch for a potential higher low in this sector for the next entry opportunity to the upside. Strong financial stocks that gained on Friday included: IVZ, NTRS, C, SCHW, CME and ACO. Stocks that lost less than -6% included: ALL, TRV, MMC, TROW, GS, CB, ICE, MS, SPG, ZION, BK and USB. Stocks losing more that -6% included: PRU, BAC, WFC, KEY, STT, AFL, RF, JPM, MET AXP and PNC. On Thursday we shared this insight: Dave’s Insight: Patience is an essential characteristic of trading success. The At the Open list has required patience this week as each looked like a signal might appear. Be ready when a signal does occur. On Friday the signal occurred. We hope you were ready. It is so easy when a market or stock runs strong to become complacent and think it won't pull back, this time is different. Then the pull back occurs just when you think it won't. The focused trader will always ride the trend for all it has and then be prepared to close the trade and take a new trade on the new signal. We alert you to the potential change so that you are ready when the signal occurs. At the Open on Friday List Results = 8 out of 11 down more than the SPX -1.98% SPY – broke the low of the high day…down 2.82% BA – broke the low of the high day…down 1.93% WHR – evening star pattern…broke the low of the high day…down 6.64% BDK – broke the low of the high day…down 2.78% DE – bearish engulfing…broke the low of the high day…down 3.49% WYNN – spinning top…did NOT break the low of the high day ADS – broke the low of the high day…down 1.60% DECK – bearish engulfing…broke the low of the high day…down -4.50% VNO – confirmed dark cloud cover…broke the low of the high day…down 12.80% SPG – confirmed dark cloud cover…broke the low of the high day…down 4.60% FWLT – bearish engulfing…broke the low of the high day…down 5.83% Index Commentary The DJIA confirmed Thursday’s bearish harami-like inside day…broke through the 50% Fib from its 61.8% Fib reached Wed, closed below its 30 DMA…fell to the low of the high day Wednesday The SPX confirmed Thursday’s dark cloud cover closing below the body and breaking the low of the high day (Thursday)…moved down from its 61.8% Fib Retracement (Feb 9) closing just below its 50% Fib and closed just above its 30 DMA… we alerted readers Thursday evening to “watch for a break below today’s low.” The Nasdaq confirmed Thursday’s dark cloud cover like candle…closed below its 50 DMA and its 61.8% Fib retracement (Feb 9)…broke the low of the high day…again we alerted readers Thursday evening to “watch for a break below today’s low.” The RUT confirmed Thursday’s dark cloud cover like candle…closed below its 50% Fib retracement (Feb 8)…and its 30 DMA…broke the low of the high day. At the Open on Monday SPY – pulled back to 30 DMA VNO – 61.8% Fib retracement ARO – buyers at 20 DMA MS – pulled back to 50 DMA ESS – closed below 30 DMA GS – two day pullback SNDA – buyers at 20 DMA OSG – bearish engulfing CTSH – broke the low of the high day LEAP – evening star just above 200 DMA Stocks to Watch on Monday Leading Stocks: Holding Above 30 DMA BIDU, CLB, BKC, NFLX, DLTR, HANS, ICE, ALGT, DLB, JEC, PWR, VPRT, AMZN, MON, AAPL, CTSH, FLS, JOYG, AMX, APEI, AXYS, BAP, CAM, GMCR, GPRO, JCOM, JOSB, MUR, PETS, WMT, ATW, GR, BIIB, SLGN, SWN, SYNA, ACN, SNHY, EBAY, GES, RCI, SNA, ORCL, WRC Moving Above 30 DMA = 0 Moving Below 30 DMA = 6 DECK, HDB, MOS, PCP, MCD, UYG Staying Below 30 DMA BLUD, NTLS, PCLN, PPD, RBN, FAS, MYGN, FSLR, GME, CPLA, ESRX, PSYS, CHL, GILD, MHS, TDG, SPWRA, AMED, GXDX, DV, ESI, VAR, WCG, JW.A, MUR, HLF, STRA, PCR, RIMM, BDX, BYI, NIHD, K, CBST, AFAM, EZPW, WAB Friday’s Action (=> +$0.70 or -$0.70) Moving Up: STRA, SINA, MA, NEM Moving Down: FSLR, POT, GS, MOS, CF, CNX, MON, AGU, ANR, BTU, X, FWLT, PNRA, ONXX, DRYS, AFAM, INFY, NIHD, GRMN, KMT, MS, KRE, CLF, UAUA, KBE, MEE, GLD, ADM Intermediate Term Market Trend: Neutral – Nasdaq, RUT Down – DJIA, SPX Short Term Market Trend: Neutral