Markets Gap Down, Rally and Then Fall, So...

DJIA - 196.33, -2.24% SP500 - 25.65, -2.85% NASDAQ Comp. - 57.60, -3.68% Russell 2000 - 25.19, -5.29% Exchange NYSE NASD Advancing 998 732 Declining 2,834 2,113 Oil $47.98 +$4.46 Gold $824.90 +$17.80 SOX 203.37 -5.20 VIX 55.78 -0.05 Strongest Sectors: XLV +0.60%...XLE -0.47%...XLU -0.79% Weakest Sectors: XLF -7.68%...XLB -4.32%...XLI -4.31% Sector Watch Up Trending: Sideways: XLE, XLP, XLU Down Trending: XLF, XLY, XLV, XLI, XLB, XLK Markets gap down, rally and then fall, so...what else is new! Intra-day volatility continues in this intermediate term sideways trading range. Concern over passage of the Auto industry aid seemed to push stocks lower during afternoon trading. The VIX was only up slightly at the close suggesting the potential for a rally on Friday. Futures, however, fell even further in evening trading.

The DJIA, SPX, Nasdaq and RUT fell below the low of their high day breaking short-term support.

ProphetCharts

Stocks to Watch on Friday Leading Stocks: Holding Above 30 DMA AYE…EZPW…PCLN…BAP…DLTR…FLR…FSTR…JCOM…JEC…PCR…ATK…B…IRIS…RTN…SNA…WMS…HAS…JOSB…AMZN…BIIB…BYI…ESRX…HDB…LFC…MCRS…PSSI…AMX…CERN…FWLT…GME…ICLR…MTW…NEU…NIHD…QSII…VMI…WAB…OI…PPD…CHU…FLS…MBT…RIO

Moving Above 30 DMA = 0 None Moving Below 30 DMA AAPL…AFAM…AGN…ANSS…CAM…CCC…CTSH…DECK…EPR…ESI…GILD…HLF…JW.A…MON…MOS…MTD…NDAQ…NILE…PCP…POT…ROST…SHW…TEVA…URBN…VIVO

Staying Below 30 DMA DGIT…LAYN…NOV…OSIP…SINA…SOHU…SWN…MMM…FLIR…PETS…SPTN…STRA…BCR…CL…DV…ACL…AIRM…AME…CBST…CHTT…GIS…MYGN…PRGO…PTNR…ROST…TECH… AXYS…PRXL…RCI Thursday’s Action Moving Up: SINA Moving Down: MON, MA, POT, MOS, CF, PNRA, CLF, FSLR, AFAM, STRA, PCLN, KRE, ZION, ESRX, KMT, LAMR, INFY, CNX, COH, V, GS, KKBE, SCHN, NDAQ, ANR, BTU, AGU, GRMN, FWLT, MEE, NIHD, UAUA, MS, SOHU, LCC, NUE Intermediate Term Market Trend: Neutral – DJIA, SPX, Down – Nasdaq, RUT Short Term Market Trend: Down

Indices Rise in Pennant Pattern

DJIA + 70.09, +0.81% SP500 + 10.57, +1.19% NASDAQ Comp. + 18.14, +1.17% Russell 2000 + 10.69, +2.30% Exchange NYSE NASD Advancing 2,696 1,841 Declining 1,146 1,003 Oil $43.52 +$1.45 Gold $807.10 +$34.70 SOX 208.57 +2.92 VIX 55.73 -3.18 Strongest Sectors: XLE +5.17%...XLB +3.09%...XLY +2.33% Weakest Sectors: XLF -1.75%...XLK -0.83%...XLV -0.26% Sector Watch Up Trending: Sideways: XLE, XLP, XLU Down Trending: XLF, XLY, XLV, XLI, XLB, XLK (click images to enlarge) On Wednesday XLE was again the strongest sector and XLF the weakest. XLF is in a bull flag pattern. Stocks rallied after Tuesday's pullback. The VIX fell over 5% confirming the move up in the SPX. The SOX gained slightly more than the Nasdaq. These combined with the red momentum line in the lower reversal zone for the second straight day suggest the potential for a continued rise on Thursday. Also the pennant on the DJIA and SPX is a short-term continuation pattern with a greater probability to breakout to the upside. Index Commentary The DJIA formed a bearish harami that did not confirm Tuesday’s bearish harami…forming a pennant since Monday…held just above its 30 DMA. The SPX formed a bearish harami that did not confirm Tuesday’s bearish harami…forming pennant since Monday …closed just above its 30 DMA. ProphetCharts The Nasdaq formed a doji that did not confirm Tuesday’s tombstone doji…formed inside day…closed just above its 30 DMA. The RUT formed a bearish harami that did not confirm Tuesday’s bearish harami/shooting star-like pattern…formed an inside day…closed just above its 30 DMA. Stocks to Watch on Thursday Leading Stocks: Holding Above 30 DMA AYE…EZPW…PCLN…BAP…DLTR…ESI…FLR…FSTR…JCOM…JEC…PCR…ATK…IRIS…MIG…RTN…SNA…WMS…HAS…JOSB…SHW...URBN…AGN…AMZN…AFAM…ANSS…BIIB…BYI…DECK…ESRX…HDB…LFC…MCRS…NILE…PSSI…AAPL…AMX…CERN…CTSH…FWLT…GME…ICLR…JW.A…MON…MTW…NDAQ…NEU…NIHD…QSII…VMI…WAB…MOS…OI…PPD MTW from our intra-day post on Monday continues to move higher Moving Above 30 DMA = 15 CAM…CCC…CHU…EPR…FLS…GILD…HLF…MBT…MTD…PCP…POT…RIO…ROST…TEVA…VIVO

Moving Below 30 DMA AXYS…RCI Staying Below 30 DMA LAYN…NOV…OSIP…SINA…SOHU…SWN…MMM…FLIR…PETS…SPTN…STRA…BCR…CL…DV…ACL…AME…CBST…CHTT…GIS…MYGN…PRGO…TECH Wednesday’s Action Moving Up: POT, AEM, BTU, CLF, SCHN, AGU, CNX, NUE, FSLR, ANR, X, FWLT, MOS, MEE, GDX, STRA, MA, CF, IPI, NIHD, COH, ESRX, GRMN, ADM Moving Down: AFAM, GS, SINA, MON Intermediate Term Market Trend: Neutral – DJIA, SPX, Down – Nasdaq, RUT Short Term Market Trend: Up

Bearish Harami Pullback

DJIA - 242.85, -2.72% SP500 - 21.03, -2.31% NASDAQ Comp. - 24.10, -1.50% Russell 2000 - 15.67, -3.26% Exchange NYSE NASD Advancing 1,266 962 Declining 2,581 1,905 Oil $42.07 -$1.64 Gold $772.40 +$5.00 SOX 205.65 +9.50 VIX 58.91 +0.42 Strongest Sectors: XLE +1.00%...XLK -0.64%...XLB -1.06% Weakest Sectors: XLF -4.02%...XLY -2.01%...XLP -1.93% Sector Watch Up Trending: Sideways: XLE, XLP, XLU Down Trending: XLF, XLY, XLV, XLI, XLB, XLK Monday evening we had 250 people join in our TA webcast. In the session we pointed out that while the short-term trend was up we expected stocks to pullback in the next 1 to 2 days. We pointed out the upper reversal zone reading on the momentum and near term line, the lack of weakness in the VIX on Monday when the SPX was up strong and the relative weakness in the SOX index compared with the Nasdaq and other broad indices as our reasons for a pullback. We also mentioned the SOX strength could simply be delayed as it was last week on Dec. 2 as the Nasdaq rose and then made a strong move on Dec.3. Interestingly enough that is exactly the way it happened today. The SOX found buyers on Tuesday as the index rose 4.84% even though the broad indices were lower. TXN traded over 34 million shares (average 17.9 mil.) while rising 4.93%. Other SOX leaders included: NSM, MRVL, AMD, MXIM, BRCM, LLTC MU and ALTR. (click images to enlarge) ProphetCharts We also stated this might be a bull flag type of pullback and to look for a potential higher low following the inverse head and shoulders breakout on the indices on Monday. The SPX, Nasdaq and RUT showed some early strength until 11 am ET on Tuesday when the expected pullback began to materialize as sellers took over. The VIX was relatively weak compared to the drop in the SPX suggesting fear was not rampant in Tuesday’s selling. Only one Sector ETF Energy, XLE, rose on Tuesday and that was even with oil prices falling $1.64 to 42.07 a barrel. The Financial Sector, XLF, which has been the strongest sector over the past two weeks, was the weakest sector on Tuesday.

Index Commentary The DJIA formed a bearish harami as it pulled back to its 30 DMA. The SPX formed a bearish harami as it pulled back to its 30 DMA.

The Nasdaq formed a tombstone doji as it pulled back to its 30 DMA. The RUT formed a bearish harami and shooting star like pattern as it closed just below its 30 DMA. Stocks to Watch on Wednesday Leading Stocks: Holding Above 30 DMA AXYS…AYE…EZPW…PCLN…ASIA…BAP…DLTR…ESI…FLR…FSTR…TKC…JCOM…JEC…PCR…ATK…B…IRIS…MIG…RTN…SNA…WMS…HAS…JOSB…URBN…AGN…AMZN…AFAM…AME…ANSS…BIIB…BYI…DECK…ESRX…HDB…ICON…LFC…MCRS…NILE…PSSI…AAPL…AMX…AOB…CERN…CTSH…FWLT…GME…ICLR…IT…JW.A…MON…MTW…NDAQ…NEU…NIHD…QSII…RIC…SNHY…VMI…WAB Moving Above 30 DMA = 4 MOS…OI…PPD…PRXL Moving Below 30 DMA ACL…AIRM…AME…BRKR…CBST…CCC…CHTT…CHU…EPR…GILD…GIS…MTD…MYGN…PRGO…PTNR…ROST…TECH…TEVA…VIVO Staying Below 30 DMA DGIT…LAYN…NOV…OSIP…RIO…SINA…SOHU…SWN…MMM…FLIR…PCP…PETS…SPTN…STRA… BCR…CL…DV Tuesday’s Action Moving Up: MON, BRCM, MOS, SCHN, AGU Moving Down: FSLR, MA, GS, V, ESRX, SOHU, PCLN, UAUA, KRE, MS, ZION, LCC, FWLT, KBE, INFY, RF, COH, CLF, ANR,X, STRA Intermediate Term Market Trend: Neutral – DJIA, SPX, Down – Nasdaq, RUT Short Term Market Trend: Up

Continuation of Friday's Pennant Breakout

DJIA + 298.76, +3.46% SP500 + 33.63, +3.84% NASDAQ Comp. + 62.43, +4.14% Russell 2000 + 20.29, +4.40% Exchange NYSE NASD Advancing 3,061 2,095 Declining 825 812 Oil $43.71 +$2.90 Gold $767.40 +$16.90 SOX 196.15 +3.59 VIX 58.49 -1.44 Strongest Sectors: XLB +7.52%...XLF +6.71%...XLV +4.66% Weakest Sectors: XLP +0.46%...XLV +0.79%...XLU +1.62% Sector Watch Up Trending: Sideways: XLE, XLP, XLU Down Trending: XLF, XLY, XLV, XLI, XLB, XLK All nine Sector ETFS moved higher on Monday with XLF the second leading sector. XLF has been the strongest sector over the past two weeks rising more than 50%, forming a 30 DMA and Higher Low Breakout today. (click image to enlarge) ProphetCharts Index Commentary The DJIA continued moving up from Friday’s upside pennant pattern breakout…sellers appeared at 50 DMA as the Dow closed 7 points below its 50 DMA…again closed above its 20 and 30 DMA…broke out and closed above it Nov. 28 high . See DJIA Chart below in our post shortly before the close. The SPX broke out and closed above its 30 DMA…again closed above its 20 DMA…broke out and closed above its Nov. 28 high. Chart Signals Target: Fib=948 Breakout=977 The Nasdaq broke out and closed above its 30 DMA…closed above it Oct. 10 low and its Nov. 29 high, which represents a potential shift of intermediate term trend from down to neutral…continuation of its pennant pattern breakout on Friday The RUT broke out and closed above its 30 DMA…continuation of pennant pattern breakout on Friday. Stocks to Watch on Tuesday Leading Stocks: Holding Above 30 DMA AXYS…AYE…EZPW…PCLN…ASIA…BAP…CBST…DLTR…ESI…FLR…FSTR…TKC…JCOM…JEC…PCR…ATK…B…IRIS…MIG…RTN…SNA…TEVA…WMS…GILD...HAS…JOSB…URBN…AGN…AMZN…ROST…ACL…AFAM…AIRM…AME…ANSS…BIIB…BYI…DECK…ESRX…HDB…ICON…LFC…MCRS…NILE…PSSI Moving Above 30 DMA = 32 AAPL…AMX…AOB…BRKR…CCC…CERN…CHTT…CHU…CTSH…EPR…FWLT…GIS…GME…ICLR…IT…JW.A…MON…MTD…MTW…MYGN…NDAQ…NEU…NIHD…PRGO…PTNR…QSII…RCI…SNHY…TECH…VIVO…VMI…WAB (click image to enlarge) Moving Below 30 DMA BCR…CL…DV…PPD Staying Below 30 DMA GIS…DGIT…LAYN…NOV…OSIP…RIO…SINA…SOHU…SWN…VMI…MMM…FLIR…PCP…PETS…SPTN…STRA Monday’s Action Moving Up: POT, X, MA, FSLR, GS, SCHN, MON, NUE, CLF, AFAM, PCLN, CF, CNX, ANR, BTU, FWLT, MEE, MOS, AGU, NDAQ, V, INFY, AEM, GDX, ESRX, NIHD, SOHU, ONXX, SINA, IPI, COH, PNRA, KBE, GRMN, KMT, ADM Moving Down: STRA, HANS, ZION Intermediate Term Market Trend: Neutral – DJIA, SPX, Down – Nasdaq, RUT Short Term Market Trend: Up

Inverse Head & Shoulders Breakout?

2:35 pm ET The rally continues...with a little more than an hour to go on Monday, the DJIA is up over 300 points the SPX is +35 and the Nasdaq is +65.

Is this an Inverse Head & Shoulders Breakout on the DJIA?

(click image to enlarge)

DECK continues its 30 DMA and Higher Lower Breakout on Monday. (click image to enlarge)

If this breakout on MTW holds through the close it will be on our Moving Above 30 DMA List this evening.

Are you watching the Chart Signals list for 30 DMA breakouts each day?

If not you may be missing out on opportunities that could be yours!

(click image to enlarge) ProphetCharts

We'll be back after the close!

Boy, Oh Boy, Oh Boy, What a Friday...

DJIA + 259.18, +3.09% SP500 + 30.85, +3.65% NASDAQ Comp. + 63.75, +4.41% Russell 2000 + 21.56, +4.91% Exchange NYSE NASD Advancing 2,619 1,965 Declining 1,204 849 Oil $40.81 -$2.86 Gold $750.50 -$13.30 SOX 192.56 +5.92 VIX 59.93 -3.71 Strongest Sectors: XLF +7.92%...XLK +3.94%...XLV +3.41% Weakest Sectors: XLU +0.64%...XLB +1.86%...XLE +2.08% Sector Watch Up Trending: Sideways: XLE, XLP, XLU Down Trending: XLF, XLY, XLV, XLI, XLB, XLK After giving back all of Wednesday's gains on the Thursday the market found support near Monday's lows and rallied over 500 Dow points to regain all of Thursday's drop and more. All sector ETFS moved higher on Friday with Financial, XLF, leading the way for the third time this week. The Retail Industry ETF, XRT, rose 7.10%, while AMZN pulled back and found support just above 43 before rising to 48. The DJIA, SPX, Nasdaq and RUT appeared to make higher lows this week. The DJIA closed in the middle of its 8-week trading range since the Oct. 10 low. Watch for a break above the Nov. 28 high on all four indices for confirmation of this week’s higher low. All fours indices appear to be on the verge of inverse head and shoulders breakouts. Watch for a breakout this next week. Check out our Stocks to Watch on Monday list. Oil and gold continued to fall on Friday. Index Commentary The DJIA first broke down out of its pennant pattern, reversed and broke out and closed above the pennant…closed above its 20 and 30 DMA…formed an outside day…bounced off of Monday’s support low and rallied over 500 points into the close...Friday was the highest close of the week. (click image to enlarge) ProphetCharts The SPX closed above its 20 DMA…formed an outside day…Friday was the highest close of the week. The Nasdaq closed above its 20 DMA…formed an outside day…broke out to the upside of its pennant pattern forming since Monday…Friday was the highest close of the week. The RUT closed above its 20 DMA…formed and outside day…closed just above the falling resistance line of its pennant forming since Monday…Friday was highest close of the week. Stocks to Watch on Monday Leading Stocks: Holding Above 30 DMA AXYS…AYE…DV…EZPW…PCLN…PPD…ASIA…BAP…CBST…DLTR…ESI…FLR…FSTR…TKC…JCOM…JEC…PCR…ATK…B…IRIS…MIG…RTN…SNA…TEVA…WMS…GILD...HAS…JOSB…URBN…AGN…AMZN…ROST (click image to enlarge) Moving Above 30 DMA ACL…AFAM…AIRM…AME…ANSS…BCR…BIIB…BYI…CL…DECK…ESRX…HDB…ICON…LFC…MCRS…NILE…PSSI (click image to enlarge) Moving Below 30 DMA None Staying Below 30 DMA MYGN…GIS…AMX…CERN…CHU……CHTT…DGIT…LAYN…NIHD…NOV…OSIP…RIO…SINA…SOHU…SWN…VMI…MMM…FLIR…PCP…PETS…SPTN…AAPL…AOB…CTSH…FWLT…IT…JW.A…MTD…PRGO…RCI…STRA…VIVO…WAB Friday’s Action Moving Up: MA, FSLR, STRA, POT, GS, SCHN, X, PNRA, NUE, CF, V, ESRX, PCLN, HANS, AFAM, ADM, CNX, ZION, COH, MON, CLF, KRE, UAUA, SOHU, NDAQ, KBE, MOS, FWLT, KMT, INFY, LCC, MS, IPI Moving Down: None Intermediate Term Market Trend: Neutral – DJIA, SPX, Down – Nasdaq, RUT Short Term Market Trend: Up

Stocks Give Back Wednesday's Gain

DJIA - 215.45, -2.51% SP500 - 21.93, -2.93% NASDAQ Comp. - 46.82, -3.14% Russell 2000 - 14.23, -3.14% Exchange NYSE NASD Advancing 1,059 855 Declining 2,775 2,017 Oil $43.67 -$3.12 Gold $763.80 -$5.00 SOX 186.64 -11.43 VIX 63.64 +2.92 Strongest Sectors: XLY +1.09%...XLF -1.08%...XLP -1.28% Weakest Sectors: XLE -6.93%...XLK -4.05%...XLU -3.61% Sector Watch Up Trending: Sideways: XLE, XLP, XLU Down Trending: XLF, XLY, XLV, XLI, XLB, XLK The DJIA and SPX continue in their intermediate term (8 weeks) sideways trading range. The Nasdaq and RUT are still below key October support, now resistance levels. Retail stocks were strong again on Thursday. The Retail Industry ETF, XRT, rose 3.21%, while AMZN added another 4.67%. Consumer Discretionary, XLY, was the only sector that moved higher on Monday. Financial ETF, XLF, -1.08%, was the second strongest sector Eight of nine sector ETFS moved lower on Thursday. Check out our Stocks to Watch on Friday list. Oil fell another $3.12 to continue its down-trend. Gold and gold stocks fell again on Thursday. Index Commentary The DJIA, SPX, Nasdaq and RUT fell back below Monday's R1 level while forming a pennant pattern with Monday as the base. Watch for a pennant pattern break on Friday for market direction. Stocks to Watch on Friday Leading Stocks: Holding Above 30 DMA AXYS…AYE…DV…EZPW…PCLN…PPD…ASIA…BAP…CBST…DLTR…ESI…FLR…FSTR…TKC…JCOM…JEC…PCR…AME…AOB…ATK…B…IRIS…MIG…RTN…SNA…TEVA…WMS…GILD...HAS…JOSB…URBN Moving Above 30 DMA AGN…AMZN…ROST Moving Below 30 DMA AAPL…AME…ANSS…AOB…BCR…BYI…CL…CTSH…FWLT…IT…JW.A…LFC…MTD…PRGO…RCI…STRA…VIVO…WAB Staying Below 30 DMA MYGN…GIS…AMX…CERN…CHU……AFAM…CHTT…DGIT…ESRX…LAYN…NIHD…NOV…OSIP…RIO…SINA…SOHU…SWN…VMI…MMM…FLIR…PCP…PETS…PSSI…SPTN Thursday’s Action Moving Up: PNRA, NUE, ZION, MS, NDAQ, ESRX, ONXX Moving Down: STRA, FSLR, MA, BTU, POT, CNX, MON, FWLT, PCLN, AEM, CF, V, CLF, INFY, SOHU, KMT, BRCM, ANR, AGU, GS, MEE, SCHN, X, IPI Intermediate Term Market Trend: Neutral – DJIA, SPX, Down – Nasdaq, RUT Short Term Market Trend: Neutral

Stocks Continue to Rally and Confirm Bullish Harami

DJIA + 172.60, +2.05% SP500 + 21.93, +2.58% NASDAQ Comp. + 42.58, +2.94% Russell 2000 + 11.94, +2.70% Exchange NYSE NASD Advancing 2,548 1,736 Declining 1,297 1,112 Oil $46.79 -$0.17 Gold $768.80 -$12.50 SOX 198.07 +12.38 VIX 60.72 -2.26 Strongest Sectors: XLF +5.17%...XLY +3.58%...XLK +2.87% Weakest Sectors: XLB -0.18%...XLE +0.06%...XLP +1.21% Sector Watch Up Trending: Sideways: XLE, XLP, XLU Down Trending: XLF, XLY, XLV, XLI, XLB, XLK Stocks continued to rally on Tuesday in part due to strong double digit increase in online spending over the Friday to Monday Thanksgiving weekend. XRT, the Retail Industry ETF rose 4.17%, while AMZN jumped 9.76%. Financial ETF, XLF, was the strongest sector ETF for the second straight day. Eight of nine sector ETFS moved higher on Wednesday. The broad indices and many stocks confirmed Tuesday’s bullish harami pattern while also breaking through Monday’s R1 resistance level and in many cases regaining over Tuesday and Wednesday more than 75% of Monday’s losses. The VIX fell again confirming the rise in the SPX. The SOX rose significantly making up for Tuesday’s under performance providing solid support to today’s tech rise. The DJIA continues in its intermediate term (7 weeks) sideways trading range while the SPX intermediate term trend status changed to neutral after closing above its Oct. 10 low for the second straight day. The Nasdaq and RUT are still below key October support, now resistance levels. Check out our Stocks to Watch on Thursday list. Gold and gold stocks fell on Wednesday and oil slipped just 17 cents. AAPL: Head & Shoulders, Double Bottom, Fibonacci Retracement and Hammer Early this morning in our webcast we pointed out two intra-day patterns a head and shoulders from Tuesday and a potential double bottom in progress on Wednesday. We pointed out that Tuesday's head and shoulders (1) had a price target of $89.25(2) which was achieved just after 2 pm and just before a rally took AAPL to a close at $92.50. We pointed out this morning during the first hour that AAPL was forming a potential double bottom (2) and if it broke the resistance high of $92.50 that the intra-day price target for AAPL would be $96. AAPL then rallied to $94.50 where traders selling formed resistance and caused AAPL to retreat, interestingly enough to a 50% Fibonacci retracement (3), where quite amazingly a hammer and dragonfly doji were formed (3)...only to see buyers step in and drive AAPL to a touchdown at $96 (4) just before closing at $95.90. (click image to enlarge) ProphetCharts These types of occurences are only happening every day and people wonder why Dave believes so strongly in Chart Signals. Dave's Insight: "I know technical analysis is just an accident...but isn't it amazing how the accident keeps happening over and over and over again." Index Commentary The DJIA confirmed Tuesday’s bullish harami and closed above Monday’s R1 level and also above its 20 DMA…closed just below its 30 DMA…remained in sideways trading range…bounced off 50% Fibonacci support and rose above the 23.6% retracement level from the Nov. 21 low. (click image to enlarge) Stocks to Watch on Thursday Leading Stocks: Holding Above 30 DMA AXYS…AYE…DV…EZPW…PCLN…PPD…ASIA…BAP…CBST…DLTR…ESI…FLR…FSTR…TKC…JCOM…JEC…PCR…AME…AOB…ATK…B…CL…CTSH…FWLT…IRIS…JW.A…MIG…RTN…SNA…TEVA…WMS Moving Above 30 DMA AAPL…ANSS…BCR…BYI…GILD...HAS…IT…JOSB…LFC…MTD…RCI…SHW…URBN…VIVO…WAB Moving Below 30 DMA FLIR…PCP…PETS…PSSI…SPTN Staying Below 30 DMA MYGN…GIS…AMX…CERN…CHU……AFAM…AGN…CHTT…DGIT…ESRX…LAYN…NIHD…NOV…OSIP…RIO…SINA…SOHU…SWN…VMI…MMM Wednesday’s Action Moving Up: FSLR, MA, GS, MON, V, ESRX, PNRA, MS, ZION, BRCM, ONXX, COH, BTU, KBE, KRE, KMT, AFAM Moving Down: STRA, POT, ANR, AEM, PCLN, CNX, ADM, CLF Intermediate Term Market Trend: Neutral – DJIA, SPX, Down – Nasdaq, RUT Short Term Market Trend: Up

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

Stocks Give Back Gains on Economic Weakness

Monday, December 1, 2008 DJIA - 679.95, -7.70% SP500 - 80.03, -8.93% NASDAQ Comp. - 137.50, -8.95% Russell 2000 - 56.07, -11.85% Exchange NYSE NASD Advancing 502 466 Declining 3,329 2,445 Oil $49.28 -$5.15 Gold $774.60 -$41.60 SOX 183.24 -15.00 VIX 68.51 +13.23 Strongest Sectors: XLV -5.14%...XPI -5.53%...XLU -6.64% Weakest Sectors: XLF -16.67%...XLE -10.64%...XLY -8.74% Sector Watch Up Trending: Sideways: XLE, XLP, XLU Down Trending: XLF, XLY, XLV, XLI, XLB, XLK Concerns over weak retails sales over the Thanksgiving Holiday weekend had sellers in control from the opening and a series of economic reports kept the selling pressure up all day long as the broad indices gave back half of the gains the achieved over the past week. The SPX and RUT fell back below their Oct. 10 low and the Nasdaq which failed to close on Friday above its Oct. 10 low, fell below its Nov. 13 low. As we pointed out in our weekend post, each of the four indices had formed a bullish engulfing pattern on their weekly charts. In an intermediate term sideways trend, DJIA and SPX, a trader should be ready to close long positions as the market falls from resistance and initiate short positions. This is also true for intermediate term down trends with the Nasdaq and RUT. All sectors were lower on Monday. Oil and gold were also down big today and energy related and gold stocks fell with the rest of the market. The VIX confirmed today’s down move as it moved significantly higher. The broad indices and many stocks in down trends or trading ranges formed classic bullish exit signals and classic bearish entry signals on Monday. Review our Stocks to Watch on Tuesday list for current ideas. Index Commentary The DJIA gave formed a bearish engulfing patter and made a 50% Fibonacci retracement fro its recent low. ProphetCharts The SPX formed a evening star pattern and moved down to a 50% Fibonacci retracement. The Nasdaq formed a bearish engulfing pattern and moved down to the mid point between its 50% and 61.8% Fibonacci retracement. The RUT formed an evening star pattern and moved down to the mid point between its 50% and 61.8% Fibonacci retracement. Stocks to Watch on Tuesday Leading Stocks: Holding Above 30 DMA AXYS…AYE…DV…EZPW…MMM…PCLN…PPD…ASIA…BAP…CBST…DLTR…ESI…FLR…FSTR…TKC…JCOM…JEC…MTD…PCR Moving Above 30 DMA RCI Moving Below 30 DMA AFAM…AGN…AME…ANSS…AOB…ATK…B…CHTT…CL…CTSH…DGIT…ESRX…FLIR…IRIS…JW.A…LAYN…MIG…NIHD…NOV…OSIP…PCP…PETS…PRGO…RIO…RTN…SHW…SINA…SNA…SOHU…SWN…TEVA…VIVO…VMI…WAB…WMS Staying Below 30 DMA MYGN…GIS…AMX…BCR…CERN…CHU…GILD…HAS…LFC…PSSI…URBN Monday’s Action Moving Up: None Moving Down: BIDU, STRA, FSLR, MA, GS, CF, MON, DECK, PCLN, ZION, ESRX, AEM, SINA, POT, KRE, MOS, CNX, X, ANR, NUE, SCHN, GDX, CLF, SOHU, V, NIHD, MER, AGU, BTU, MS, MEE, KBE, NDAQ, HANS, UAUA, IPI, BUCY, ONXX, AMZN, RF, LDK, KMT, INFY, LAMR, DRYS, BRCM, COH, FWLT, GRMN, LCC, EBAY Intermediate Term Market Trend: Neutral – DJIA, Down – SPX, Nasdaq, RUT Short Term Market Trend: Neutral

Happy Thanksgiving...What a Great Week

DJIA + 102.43, +1.17% SP500 + 8.56, +0.96% NASDAQ Comp. + 3.47, +0.23% Russell 2000 + 4.28, +0.91% Exchange NYSE NASD Advancing 2,267 1,787 Declining 1,133 911 Oil $54.43 -$0.01 Gold $816.20 +$7.70 SOX 198.24 -3.06 VIX 55.28 +0.36 Strongest Sectors: XLF +2.51%...XLI +2.17%...XLU +1.76% Weakest Sectors: XLE -1.60%...XLK +0.13%...XLB +0.43% Sector Watch Up Trending: Sideways: XLE, XLP, XLU Down Trending: XLF, XLY, XLV, XLI, XLB, XLK Friday was a holiday shortened trading day and trading volume was light. The broad indices moved up for the fifth straight day producing the one of the largest weekly gains for 2008: Weekly Gain ending Nov. 28, 2008 DJIA +9.7% SPX +12.0% Nasdq +10.9% RUT +16.5% For some traders this past week could represent an entire year's worth of gain. While a pull back in the first week of December is not out of the question, the strength of stocks this past week is indeed making the past 7 weeks since Oct. 10 look like consolidating basing action and emphasizes the need for traders to stay focused on and trade the short-term trend, whether that trend is up or down. Index Commentary A bullish engulfing pattern on the DJIA weekly chart. (click image to enlarge) A bullish engulfing pattern on the SPX weekly. (click image to enlarge) A bullish engulfing pattern on the Nasdaq weekly. (click image to enlarge) A bullish engulfing patten on the RUT weekly. (click image to enlarge) Stocks to Watch on Monday Leading Stocks: Holding Above 30 DMA TEVA…AXYS…AYE…CL…DV…EZPW…MMM…PCLN…PPD…ANSS…ASIA…BAP…CBST…DLTR…ESI…FLR…FSTR…PRGO…SHW…TKC…WMS…AME…JCOM…JEC…NOV…AOB…ATK…CHTT…CTSH…DGIT…FLIR…JW.A…MIG...MTD…OSIP…PCP…PCR…RIO…SINA…SOHU…SWN…VIVO…VMI Moving Above 30 DMA AFAM…AGN…B…ESRX…IRIS…LAYN…NIHD…RTN…SNA…WAB (click image to enlarge) ProphetCharts Moving Below 30 DMA AMX…BCR…CERN…CHU…GILD…HAS…LFC…PSSI…RCI…URBN Staying Below 30 DMA MYGN…GIS Friday’s Action Moving Up: MON, GS, AEM, PCLN, STRA, LDK, MER, INFY, LAMR, ONXX, AGU, MOS, SINA, NUE, ZION, KBE Moving Down: BIDU, FSLR, DECK, AMZN, CNX, MEE, BTU, BRCM Intermediate Term Market Trend: Neutral – DJIA, SPX, Down – Nasdaq, RUT Short Term Market Trend: Up

Happy Thanksgiving Eve

DJIA + 247.14, +2.91% SP500 + 30.29, +3.53% NASDAQ Comp. + 67.37, +4.60% Russell 2000 + 25.68, +5.79% Exchange NYSE NASD Advancing 3,100 2,273 Declining 581 595 Oil $54.44 +$3.67 Gold $808.50 -$10.00 SOX 201.30 +14.28 VIX 54.92 -5.98 Strongest Sectors: XLY +5.88%...XLE +5.60%...XLF +4.66% Weakest Sectors: XLU -0.34%...XLP +1.28%...XLV +1.57% Sector Watch Up Trending: Sideways: XLE, XLP, XLU Down Trending: XLF, XLY, XLV, XLI, XLB, XLK What a great way to set up Thanksgiving with a continuation of the short-term up trend which began last Friday. Markets are closed on Thursday and will be open for half a day on Friday. Friday after Thanksgiving is traditionally the lightest daily volume of the year. Trading should return in earnest on Monday. Not only did the broad indices and sectors move up strong on Wednesday, many individual stocks flashed entry signals on Wednesday. Be sure to review the charts in our Stocks to Watch on Friday section. Index Commentary The DJIA formed a large white candle…buyer were able to push through the 8,600 resistance level of the past two days…closed just above its 20 and 30 DMA…closed above its Oct. 10 intraday low for fourth straight day…9,000 continues as an important intermediate resistance level. The SPX formed a large white candle…closed above Oct. 10 low for the third straight day…buyers were able to push the SPX through the 865 resistance area …840 continues as a key support area and 915 a key resistance area. The Nasdaq formed a large white candle…buyers broke through the1,500 resistance area…closed just 10 points below its Oct. 10 low and above the Oct. 24 low. The RUT formed a large white candle and Tuesday’s a potential hanging man pattern was negated…closed one point above its Oct. 10 low…broke through the 450 key resistance area…the 20 and 30 DMA’s are the next resistance area. Stocks to Watch on Friday Leading Stocks: Holding Above 30 DMA TEVA… AXYS…AYE…CL…DV…EZPW…MMM…PCLN…PPD ANSS…ASIA…BAP…CBST…DLTR…ESI…FLR…FSTR…PRGO…RCI…SHW...TKC…WMS… AME…JCOM…JEC…NOV Moving Above 30 DMA AMX…AOB…ATK…BCR…CERN…CHTT…CHJ…CTSH…DGIT…FLIR…GILD…HAS…JW.A…LFC…MIG...MTD…OSIP…PCP…PCR…PSSI…RIO…SINA…SOHU…SWN…URBN…VIVO…VMI Moving Below 30 DMA None Staying Below 30 DMA RTN…AFAM…MYGN…GIS Wednesday’s Action Moving Up: BIDU, FSLR, SOHU, MA, DECK, PCLN, GS, STRA, CF, CLF, SCHN, POT, SINA, NUE, CNX, FWLT, X, MEE, AGU, BTU, ANR, V, BUCY, NDAQ, ESRX, HANS, MOS, IPI, MON, NIHD, AMZN, KMT, LDK, ONXX, INFY, EXPE, DRYS, LAMR, BRCM, MER, EBAY, GRMN, AEM, PNRA, KBE Moving Down: None Intermediate Term Market Trend: Neutral – DJIA, SPX, Down – Nasdaq, RUT Short Term Market Trend: Up

Rally Slows Down on Tuesday

DJIA + 36.08, +0.43% SP500 + 5.58, +0.66% NASDAQ Comp. - 7.67, -0.50% Russell 2000 + 6.38, +1.46% Exchange NYSE NASD Advancing 2,505 1,597 Declining 1,195 1,255 Oil $50.77 -$3.73 Gold $819.50 +$0.00 SOX 187.02 -4.18 VIX 60.90 -3.80 Strongest Sectors: XLF +5.83%...XLB +3.67%...XLU +1.99% Weakest Sectors: XLP +0.56%...XLV +0.66%...XLY +1.26% Sector Watch Up Trending: Sideways: XLE, XLP, XLU Down Trending: XLF, XLY, XLV, XLI, XLB, XLK The DJIA, SPX and RUT moved higher on Tuesday, however, upward momentum slowed down. With the Thanksgiving holiday on Thursday and a half trading day on Friday, which is traditionally the lightest trading volume day of the year, this is not overly surprising. Many traders will close positions out on Wednesday and not return until next week. The fact that profit taking did not push the indices below Monday’s S1 level shows that buyers are still in control. If markets move below Tuesday’s low or Monday’s S1 level, some traders will view this as an opportunity to take profits on short-term bullish trades. The Financial Sector, XLF, was the strongest sector again on Tuesday gaining more than 20% over the past two days. Airline stocks had positive gains on Tuesday with LCC and DAL gaining more than 14% and UAUA up over 24%. The SPX closed above its Oct. 10 low for the second straight and is trading in its sideways trend of the past 6 weeks once again. The Nasdaq and RUT are still trading below their October lows. Index Commentary The DJIA formed a white spinning top…sellers appeared at 8,600 level for the second day in a row…closed above its Oct. 10 intraday low for third straight day…watch R3 from Wednesday…8,500 continues as an important intermediate resistance level. The SPX formed a white spinning top…closed above Oct. 10 low for the second straight day…sellers appeared the 865 area for the second day…840 continues as a key support area and 915 a key resistance area. The Nasdaq formed a black spinning top…sellers came in at the 1,486 level…1,500 continues as a key resistance area…still trading below Oct. 10 and 24 lows. The RUT formed a potential hanging man pattern…closed above its Oct. 28 low…450 is still a key resistance area…still trading below Oct. 10 low. Stocks to Watch on Wednesday Leading Stocks Holding Above 30 DMA TEVA… AXYS…AYE…CL…DV…EZPW…MMM…PCLN…PPD ANSS…ASIA…BAP…CBST…DLTR…ESI…FLR…FSTR…PRGO…RCI…SHW...TKC…WMS Stocks Moving Above 30 DMA AME…JCOM…JEC…NOV Stocks Moving Below 30 DMA MIG…OSIP…SWN Stocks Staying Below 30 DMA RTN…AFAM…MYGN…VIVO…AOB…CERN…CHTT…FLIR…GILD…GIS…PSSI Tuesday’s Action Moving Up: STRA, BIDU, MA, FSLR, MON, GS, PNRA, HANS, UAUA, CNX, CF, LAMR, AEM, FWLT, ANR, PCLN, NUE, GDX, COH, ONXX, SINA, MS, SCHN, ZION, KBE, LCC Moving Down: ESRX, INFY Intermediate Term Market Trend: Neutral – DJIA, SPX, Down – Nasdaq, RUT Short Term Market Trend: Up

Markets in Moderate Pullback on Tuesday

1:23 ET DJIA -83...SPX -6.5....Nasdaq -28...RUT -5.6....Sox -5.5....Oil -$3.58 VIX -0.05 After an 1,150 point rally in the DJIA on Friday and Monday stock indices are taking a breather. From a traders perspective this is healthy. The key becomes where does the pullback stop? If support on this pullback becomes a higher low that is positive and becomes a potential entry point for short term bullish trades. Keey your eye on key support levels. For the indices that is the S1 and S2 levels of Monday's large white candle. If those levels hold and buyers step into the market at higher lows that will be a buying opportunity for traders. For the DJIA S1 is the 8,250 area and S2 is the 8,050 area. Since the DJIA has risen above its Oct. 1o low, that 7,882 level is significant relative to the direction of its 6-week intermediate term trend; neutral or down. At this moment the SPX is barely above its Oct. 10 low of 839, which is a key level for the index. Monday's S1 level is 826 and the S2 is 801. So watch the pullback in context of these key support levels. As of this moment only the DJIA has an Intermediate Term Trend reading of Neutral. The Nasdaq and RUT can not change today as they are still trading below their October lows. Airline, Financial, Utility, Basic Material and Healthcare stocks are showing some strength this morning. Tuesday's Early Action Moving Up: BIDU, STRA, UAUA, HANS, PNRA, MA, MON, FWLT, CNX, CF Moving Down: ESRX, ZION, PCLN, POT, AEM, X, BTU, GDX, FSLR, INFY, AMZN, DECK, NIHD, CLF, SOHU

DJIA and SPX Back Above October 10 Low

DJIA + 396.97, +4.93% SP500 + 51.78 +6.47% NASDAQ Comp. + 87.67, +6.33% Russell 2000 + 30.26, +7.44% Exchange NYSE NASD Advancing 3,261 2,211 Declining 489 724 Oil $54.50 +$4.57 Gold $819.50 +$27.70 SOX 191.20 +10.98 VIX 64.70 -7.97 Strongest Sectors: XLF +15.19%...XLY +7.85%...XLE +7.23% Weakest Sectors: XLU +1.01%...XLP +1.26%...XLV +1.99% Sector Watch Up Trending: Sideways: Down Trending: XLP, XLF, XLY, XLV, XLI, XLE, XLU, XLB, XLK The rally that began on Friday broadened as the SPX, Nasdaq and RUT had larger point and percentage gains on Monday than they did on Friday. On the NYSE the number of advancing issues increased by 56% and the number of declining issues fell by 54%. The Nasdaq advancers also increased while decliners fell. The Financial Sector, XLF, was the strongest sector up 15.19% on news of a government rescue plan for C which rose $2.18 or 57%. Our Intermediate Term Trend reading on the DJIA changed to Neutral because the index closed for the second straight day above the Oct. 10 low support area. The Intermediate Term Trend on the SPX, which closed above its Oct. 10 low today, will change to Neutral on Tuesday if the index stays above the Oct. 10 support tomorrow. Index Commentary The DJIA followed Friday’s bullish engulfing pattern with a large white candle that closed above Thursday’s R3, Wednesday’s R1 and R2…closed above its Oct. 10 intraday low for second straight day…watch R3 from Wednesday…8,500 important intermediate resistance level. The SPX confirmed Friday’s bullish harami with a large white candle…closed above Thursday’s R2 and R3 and R1 from Wednesday…closed above Oct. 10 low…840 is key support area and 915 a key resistance area. The Nasdaq confirmed Friday’s hammer with a large white candle…closed above Thursday’s R3 and Wednesday’s R1…1,500 is a key resistance area…still trading below Oct. 10 low. The RUT confirmed Friday’s bullish harami with a large white candle…closed above Thursday’s R2 and R3 and Wednesday’s R1…450 is a key resistance area…still trading below Oct. 10 low. Stocks to Watch Of the 31 stocks we listed to watch for the next trading day only one was negative on Friday or Monday. This is to point out the importance of mental flexibility and being prepared for a support bounce when the Chart Signals suggest a strong probability of a move occuring. Some of the gains on just the stocks were equal to more than some traders' annual gains. Read Thursday's post and look at Monday's gains below. We were expecting this technical bounce as we had posted this Thursday evening: "Stocks continue to be technically oversold in the short-term, so be alert for a potential short-term bounce Friday or Monday. This could provide a bullish move on the few leading stocks or a counter bounce on the many down trending stocks." The emphasis was as originally posted Thursday night. Stocks to Watch Posted on Thursday for Friday Support Bounce AXYS +5.21% Potential Support Bounce SRCL +1.74%...CHRW +4.49%...TEVA +0.50%...SHLD +16.06%...FAST +5.03% VMW +3.22%...WYNN +17.93% Stocks to Watch Posted on Weekend for Monday Potential Double Bottom VRTX +6.86%...MBT +27.96%...UA +7.94% ...FSYS +16.77%...DGX +2.53%...ESRX +5.94%...UTX +5.23%...ARG +2.62% Morning Star Patterns FAST +5.03%...PRE +4.74%...FMC +8.61% Potential Support Bounce TDS +11.73%...CMP +10.48%...OTEX +2.04%...AMAG +4.71%...ESI +8.92%...MHS +7.72%...RIMM +1.03% Support Bounce URS +34.42%...MMM +3.20%...AMGN +1.99% Potential Bull Flag ADM +7.53%...CBST +6.13%...MYGN +1.36% Stocks to Watch on Tuesday Support Bounce and Potential Double Bottom MBT...TDS...WYNN...CBST...ICE...HSC...NFLX...RIMM...WFC...USB...ZION...KEY...UYG...DE...PCP Leading Stocks Holding Above 30 DMA TEVA… AXYS…AYE…CL…DV…EZPW…MMM…PCLN…PPD Stocks Moving Above 30 DMA ANSS…ASIA…BAP…CBST…DLTR…ESI…FLR…FSTR…MIG…OSIP…PRGO…RCI…SHW…SWN…TKC…WMS Stocks Moving Below 30 DMA RTN Stocks Staying Below 30 DMA AFAM…MYGN…VIVO…AOB…CERN…CHTT…FLIR…GILD…GIS…PSSI

Monday’s Action Moving Up: FSLR, GS, STRA, MA, CNX, SOHU, AMZN, NIHD, V, MER, SCHN, PCLN, MS, ZION, ESRX, PNRA, KBE, KRE, NDAQ, X, BTU, NUE, MON, FWLT, SINA, MOS, CLF, BIDU, DECK, INFY, COH, KMT, BRCM, LDK, JASO, ONXX, GDX, MEE, IPI, ANR, AGU, GRMN, AEM, RF, UAUA, HANS, DRYS, BUCY, EBAY, EXPE Moving Down: POT Intermediate Term Market Trend: Neutral – DJIA, Down – SPX, Nasdaq, RUT Short Term Market Trend: Up

Rally Follows Through on Monday

As of 3 pm ET, the rally that began on Friday has continued to move higher. A quick look at key resistance areas to pay attention to: The DJIA which on Friday's close had moved back into the sideways trading range that started on October 10, is continuing to rise and has penetrated Thursday's R3 and Wednesday's R1...currently just below Wednesday's open...watch Wendesday's R2 and R3. Key resistance areas are 8,500 and 9,000. The SPX has moved back above its October 10 low and risen above Thursday's R2 and R3 levels as well as Wednesday's R1...840 is a key resistance/support area that the SPX is currently above...915 is the next key resistance area. The rally is broad with NYSE advancers leading decliners 3,168 to 545 and on the Nasdaq 2,111 to 810.

A Rally From Down Under

DJIA + 494.13, +6.54% SP500 + 47.59 +6.32% NASDAQ Comp. + 68.23, +5.18% Russell 2000 + 21.23, +5.51% Exchange NYSE NASD Advancing 2,049 1,777 Declining 1,161 1,170 Oil $49.93 +$0.51 Gold $791.80 +$43.10 SOX 180.22 +8.90 VIX 72.67 -8.19 Strongest Sectors: XLE +11.16%...XLU +10.00%...XLY +6.86% Weakest Sectors: XLV +0.13%...XLB +1.11%...XLI +2.95% Sector Watch Up Trending: Sideways: Down Trending: XLP, XLF, XLY, XLV, XLI, XLE, XLU, XLB, XLK Stocks rallied from down under support on Friday with the DJIA regaining more than Thursday’s loss and closing above support. The SPX, Nasdaq and RUT regained most of Thursday’s loss but closed just below Thursday’s close. Advancers led decliners by about a 2 to 1 margin which was a respite from Wednesday’s and Thursday’s 9 to 1 margin in favor of decliners. All nine sectors moved higher on Friday. We were expecting this technical bounce as we had posted this Thursday evening: "Stocks continue to be technically oversold in the short-term, so be alert for a potential short-term bounce Friday or Monday. This could provide a bullish move on the few leading stocks or a counter bounce on the many down trending stocks."

The emphasis was as originally posted Thursday night.

Maybe Chart Signals do work.

This is a counter trend rally and only the DJIA has moved above its recent support for a potential breakout and reversal. The DJIA barely broke through so it is too early to conclude that Friday is anything more that a short term technical bounce and counter trend move. Watch the short term resistance areas as stated below in Index Commentary for clues if this counter trend bounce sets up a potential reversal point.

Index Commentary The DJIA formed a bullish engulfing pattern…breaks above below its Oct. 10 intraday low…watch R3 from Thursday and R1 from Wednesday…8,500 important intermediate resistance level. The SPX formed a bullish harami…watch R2 and R3 from Thursday and R1 from Wednesday. The Nasdaq formed a hammer…watch R3 from Thursday and R1 from Wednesday. The RUT formed a bullish harami…watch R2 and R3 from Thursday and R1 from Wednesday.

Stocks to Watch Posted on Thursday for Friday Support Bounce AXYS +4.50% Potential Support Bounce SRCL +0.36% CHRW +9.38% TEVA +0.00% SHLD +1.23% FAST +10.05% VMW -3.42% WYNN +2.46

Stocks to Watch on Monday Potential Double Bottom VRTX...MBT...UA...FSYS...DGX...ESRX...UTX...ARG... Morning Star Patterns FAST...PRE...FMC Potential Support Bounce TDS...CMP...OTEX...URS...AMAG...ESI...MHS...RIMM Support Bounce URS...MMM...AMGN Potential Bull Flag ADM...CBST...MYGN Leading Stocks Holding Above 30 DMA TEVA Stocks Moving Above 30 DMA AXYS…EZPW…MMM…PCLN…PPD…RTN Stocks Moving Below 30 DMA None to report Stocks Staying Below 30 DMA AFAM…CL…DLTR…DV…MYGN…VIVO…ANSS…AOB…AYE…CBST…CERN…CHTT…ESI…FLIR…FSTR…GILD…GIS…PRGO…PSSI…SHW…SWN Friday’s Action Moving Up: CF, DECK, FSLR, AEM, MA, ;POT, PCLN, GDX, ESRX, CLF, X, AGU, ANR, NUE, MOS, BTU, FWLT, SINA, MEE, STRA, SOHU, AMZN, BIDU, KRE, NDAQ, PNRA, CNX, SCHN, IPI, GS, MON, INFY, BUCY, NIHD, COH, LDK, KMT, EBAY, MS Moving Down: V, ONXX, Intermediate Term Market Trend: Down Short Term Market Trend: Down

A Record Bear Market Pecentage Drop

DJIA - 444.99, -5.56% SP500 - 54.14, -6.71% NASDAQ Comp. - 70.30, -5.07% Russell 2000 - 27.07, -6.56% Exchange NYSE NASD Advancing 334 426 Declining 3,414 2,526 Oil $48.70 -$4.92 Gold $748.70 +$12.70 SOX 171.32 -5.78 VIX 80.86 +6.60 Strongest Sectors: XLI -2.68%...XLV -2.85%...XLP -3.48% Weakest Sectors: XLE -12.37%...XLF -10.74%...XLY -5.86% Sector Watch Up Trending: Sideways: Down Trending: XLP, XLF, XLY, XLV, XLI, XLE, XLU, XLB, XLK Thursday was a record day setting, a new record post WWII bear market percentage drop. The prior worst bear market was the 1973-1974 bear market which fell from high to low -46.5%. As of the close today, the DJIA was down from its October 9, 2007 high -46.68%. A new bear market record. All four broad indices have broken support and are again in an intermediate term downtrend.

Decliners again led advancers by a 9 to 1 margin. All nine sectors moved lower. Stocks experienced a technical bounce in the morning that faded as concerns over the auto industry and jobless data weighed on the market as sellers gained the upper hand sending stocks lower. Stocks continue to be technically oversold in the short-term, so be alert for a potential short-term bounce Friday or Monday. This could provide a bullish move on the few leading stocks or a counter bounce on the many down trending stocks. Oil dropped $4.92 sending the Energy ETF (XLE) down over 12%. Gold rose $12.70.

Index Commentary The DJIA large black candle…new 52 week closing low…breaks below its Oct. 10 intraday low. The SPX large black candle breaks support…new 52-week intraday and closing low. The Nasdaq formed a large black candle breaks support…new 52-week intraday and closing low. The RUT formed a large black candle breaks support…new 52-week intraday and closing low.

Trend Reversal Strategy RIMM stopped out at $44.70 today. The options closed out at 2.50 with a 41 cent gain or 19% gain. We stated in our Wednesday morning webcast that it would be valid to move the stop even higher in the current volatile market to lock in the strong one day gains, but that we would follow the strategy rules for illustrative purposes.

Stocks to Watch on Friday Support Bounce AXYS Potential Support Bounce SRCL, CHRW, TEVA, SHLD, FAST, VMW, WYNN Broke Support from Wednesday Stocks to Watch GILD…JNJ…IBM…BCR…CELG At Support PCP Below Support BA formed an inverted hammer…watch for a potential counter trend bounce Leading Stocks Holding Above 30 DMA TEVA Stocks Moving Below 30 DMA AFAM…CL…DLTR…DV…MYGN…VIVO Stocks Staying Below 30 DMA ANSS…AOB…AYE…CBST…CERN…CHTT…ESI…FLIR…FSTR…GILD…GIS…MMM…PCLN…PRGO…PSSI…SHW…SWN Thursday’s Action Moving Up: None in our Watchlist Moving Down: FSLR, POT, MA, MOS, AGU, CF, BTU, X, BUCY, MON, ANR, GS, ESRX, V, LDK, SOHU, CLF, NIHD, SCHN, FWLT, CNX, NUE, PCLN, IPI, STRA, KBE, KRE, NDAQ, ZION, RF, UAUA, MEE, SINA, MS, KMT, MER, DRYS, BIDU, LAMR, INFY, ONXX, AMZN, GRMN, PNRA Intermediate Term Market Trend: Down Short Term Market Trend: Down