Failure to Confirm Thursday's Candle Patterns

DJIA - 143.28, -1.64% SP500 - 19.38, -2.13% NASDAQ Comp. - 45.42, -2.81% Russell 2000 - 20.71, -4.13% Exchange NYSE NASD Advancing 1,157 720 Declining 2,645 2,080 Oil $40.83 -$0.87 Gold $854.30 +$0.40 SOX 215.28 -7.26 VIX 42.82 +0.61 The VIX moved up slightly confirming the move down in the SPX on Friday. There was, however, a disparity with the small rise in the VIX and the larger drop in the SPX, suggesting that the pull back was not accompanied by an similar increase in fear. We will see if this equates into a short-term bottom Friday or early next week. Strongest Sectors: XLU -0.78%...XLV -1.06%...XLP -1.71% Weakest Sectors: XLE -3.36%...XLF -3.18%...XLY -3.07% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK, XLF Down Trending: The indices closed below Thursday's low on Friday. The indices are well above their late December lows so continue to watch for a potential support bounce and a higher low on Monday. Index Commentary The DJIA did not confirm Thursday’s hammer…closed just below its 20, 30 and 50 DMA. The SPX did not confirm Thursday’s hammer… closed below its 20 DMA and above its 30 and 50 DMA. The Nasdaq did not confirm Thursday’s piercing line pattern…closed above its 20, 30 and 50 DMA. The RUT fell below Thursday’s low…closed below its 20 DMA and above its 30 and 50 DMA.

Stocks to Watch on Monday Leading Stocks: Holding Above 30 DMA AYE…PCLN…BAP…FLR…JEC…PCR…ATK…RTN…SNA…WMS…JOSB…AMZN…BIIB…BYI…HDB…FWLT…QSII…VMI…OI…FLS…BCO…MOS…ROST…AET…POT…UTX…APH…CAM…CCC…CIR…CL…DECK…ESI…GES…GILD…JW.A…MYGN…ACL…DNA…HLF…OSIP…AGN…KEX…LAYN…RIO…SHW…AMED…PETS…BCR…CAM…FLIR…NGS…NOV…SPN…CTSH…IIVI…K…NIHD…PCP…SWN…AMX…HP…ADBE…ATW…GME…MBT…MON…RIMM…LNN…RIG… ICLR…SYNA…CBST…BLUD Moving Above 30 DMA = 3 DV…STRA…TEVA Moving Below 30 DMA = 15 AAPL…AFAM…AME…DLTR…EPR…FSTR…HAS…LFC…MMM…MTW…NE…NEU…RCI…SOHU…VIP Staying Below 30 DMA GIS…PTNR…AXYS…URBN…MTD…SINA…PRGO…PPD…ESRX…CHTT…IRIS…ISRG…SPTN…CELG…ENDP…TECH…ANSS…CHU…EZPW…NILE…PSSI…PSYS…VIVO…WAB… CERN…JCOM…MCRS…NDAQ Friday’s Action Moving Up: STRA, FSLR, DRYS, Moving Down: AFAM, COH, ESRX, MA, SCHN, X, GS, ANR, ONXX, MON, PCLN, CLF, KRE, NUE, CNX, SINA, SOHU, MOS, KBE, NIHD, CF, PNRA Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Down

Downward Momentum Stops, Stocks Bounce in Pullback

DJIA - 27.24, -0.31% SP500 + 3.08, +0.34% NASDAQ Comp. + 17.95, +1.12% Russell 2000 + 4.91, +0.99% Exchange NYSE NASD Advancing 2,300 1,702 Declining 1,487 1,087 Oil $41.70 -$0.93 Gold $853.90 +$12.80 SOX 222.54 -0.58 VIX 42.56 -1.91 The VIX moved down confirming the move up in the SPX on Thursday. Strongest Sectors: XLB +1.40%...XLE +1.29%...XLI +0.98% Weakest Sectors: XLP -1.31%...XLU -0.51%...XLF -0.42% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK, XLF Down Trending: Stocks indices found support buying near their 20 DMA today. The fact that the indices found buyers after just a one day pull back at or above key moving averages, which respresent a higher low, suggests big money sees this market going higher. Watch for confirmation of today's bullish patterns on the indices on Friday. Index Commentary The DJIA formed a hammer after a one day pull back…bounced off and closed above its 20, 30 and 50 DMA. The SPX formed a hammer…bounced off its 20 DMA and closed above its 20, 30 and 50 DMA. The Nasdaq formed a piercing line pattern after a one day pullback…closed above its Dec 9 resistance high and it 20, 30 and 50 DMA. The RUT formed small white spinning top after a one day pull back…closed above its Dec 19 resistance high and it 20, 30 and 50 DMA. Stocks to Watch on Friday Leading Stocks: Holding Above 30 DMA AYE…PCLN…BAP…FLR…JEC…PCR…ATK…RTN…SNA…WMS…HAS…JOSB…AMZN…BIIB…BYI…HDB…LFC…FWLT…MTW…QSII…VMI…OI…FLS…BCO…MOS…ROST…AET…POT…UTX…APH…CAM…CCC…CIR…CL…DECK…EPR…ESI…GES…GILD…JW.A…MYGN…ACL…DNA…HLF…OSIP…AGN…KEX…LAYN…RCI…NEU…RIO…SHW…AMED…PETS…SOHU…BCR…CAM…FLIR…NGS…NOV…SPN…CTSH…FSTR…IIVI…K…NIHD…PCP…SWN…AMX…HP…ADBE…AME…ATW…GME…MBT…MON…NE…RIMM…AFAM…LNN…RIG… ICLR…SYNA…CBST…DLTR Moving Above 30 DMA = 4 AAPL…BLUD…MMM…VIP Moving Below 30 DMA = 4 CERN…JCOM…MCRS…NDAQ Staying Below 30 DMA GIS…PTNR…AXYS…URBN…MTD…SINA…PRGO…PPD…ESRX…STRA… CHTT…DV…IRIS…ISRG…SPTN…CELG…ENDP…TECH…TEVA…ANSS…CHU…EZPW…NILE…PSSI…PSYS…VIVO…WAB Thursday’s Action Moving Up: FSLR, STRA, AEM, DRYS, SCHN, PCLN, GDX, ANR, MOS, FWLT, BTU, X, CNX, CF, NIHD, PNRA, NUE, ONXX, MS, MA, UAUA, GS, POT, MEE Moving Down: MON, AFAM, NDAQ, AGU, SINA, LAMR Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Neutral

Indices Fall to Moving Average Support

DJIA - 245.40, -2.72% SP500 - 28.05, -3.00% NASDAQ Comp. - 53.32, -3.23% Russell 2000 - 17.61, -3.42% Exchange NYSE NASD Advancing 813 754 Declining 2,997 2,071 Oil $42.63 -$5.95 Gold $841.10 -$24.30 SOX 223.12 -11.44 VIX 43.39 +4.83 The VIX moved up confirming the move down in the SPX on Tuesday. Strongest Sectors: XLU -0.81%...XLV -0.91%...XLP -1.00% Weakest Sectors: XLF -5.22%...XLI -4.47%...XLE -4.24% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK, XLF Down Trending: Wednesday was a sell signal for many short-term traders as indices and many stocks broke below the low of the high day of the recent short-term up trend of the last five trading days. This type of price action can be either a sell signal for short-term bullish trades or an entry signal for short-term bearish trades. Oil moved lower as did commodity related stocks like coal and Ag-related. Gold stocks sold off as well. Since the broad indices and sectors are in intermediate term sideways trends a pull back from resistance is not unexpected after the last two days of small spinning tops. All nine sector ETFs moved lower today. If leading stocks stay above support and form a higher low in their recent up trend from the November lows, view this pull back as a potential entry opportunity for up trending stocks as they near support. Index Commentary The DJIA formed a large black candle closing below Tuesday’s (high day) low…closed above its 20, 30 and 50 DMA. The SPX formed a large black candle closing below Tuesday’s (high day)…confirmed Monday’s bearish harami…closed above its 20, 30 and 50 DMA.

(click image to enlarge)

ProphetCharts

The Nasdaq gapped down from Tuesday’s (high day) low….confirmed Monday’s bearish harami…closed above its 20, 30 and 50 DMA. The RUT formed a large black candle closing below Tuesday’s (high day) low…closed above its 20, 30 and 50 DMA. Stocks to Watch on Thursday Leading Stocks: Holding Above 30 DMA AYE…PCLN…BAP…FLR…JCOM…JEC…PCR…ATK…RTN…SNA…WMS…HAS…JOSB…AMZN…BIIB…BYI…HDB…LFC…CERN…FWLT…MTW…QSII…VMI…OI…FLS…BCO…MOS…NDAQ…ROST…AET…POT…UTX…APH…CAM…CCC…CIR…CL…DECK…EPR…ESI…GES…GILD…JW.A…MYGN…ACL…DNA…HLF…OSIP…AGN…KEX…LAYN…RCI…NEU…RIO…SHW…AMED…PETS…SOHU…BCR…CAM…FLIR…NGS…NOV…SPN…CTSH…FSTR…IIVI…K…MCRS…NIHD…PCP…SWN…AMX…HP…ADBE…AME…ATW…GME…MBT…MON…NE…RIMM…AFAM…LNN…RIG… ICLR…SYNA Moving Above 30 DMA = 2 CBST…DLTR Moving Below 30 DMA = 12 AAPL…ANSS…BLUD…CHU…EZPW…MMM…NILE…PSSI…PSYS…VIP…VIVO…WAB Staying Below 30 DMA GIS…PTNR…AXYS…URBN…MTD…SINA…PRGO…PPD…ESRX…STRA… CHTT…DV…IRIS…ISRG…SPTN… CELG…ENDP…TECH…TEVA Wednesday’s Action Moving Up: MON, AFAM Moving Down: MA, CNX, FSLR, AEM, GS, SCHN, PCLN, KMT, BTU, X, MEE, FWLT, ANR, GDX, ZION, PNRA, NDAQ, AGU, KBE, CLF, CF, NUE, SOHU, ESRX, MS, KRE, V, LAMR, ONXX, BRC, RF, HANS, JASO, POT Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Neutral

Stocks Inch Up On Tuesday

DJIA + 62.21, +0.69% SP500 + 7.25, +0.78% NASDAQ Comp. + 24.35, +1.50% Russell 2000 + 9.68, +1.92% Exchange NYSE NASD Advancing 2,961 2,049 Declining 869 792 Oil $48.58 -$0.23 Gold $865.40 +$8.20 SOX 234.56 +11.27 VIX 38.56 -0.52 The VIX moved down confirming the move up in the SPX on Tuesday. Strongest Sectors: XLK +2.32%...XLB +2.24%...XLI +2.20% Weakest Sectors: XLV -1.63%...XLP -1.48%...XLU -1.43% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK, XLF Down Trending: From day to day over the next several weeks we will be adding some very exciting and positive features to Chart Signals so stay tuned and check back regularly. Real-Time Virtual Trade Review Many of you are aware of the real-time virtual trades that we do in our webcasts. This week I will be reviewing these in greater detail. As of today's close this is the status of the following trades: (Click images to enlarge) Dec 10 - Buy Jan 70 calls 2.85, today's close 9.20 + 222% Dec 23 - Buy Jan 50 calls 1.50, today's close 4.90 +222%

Dec 24 Buy Jan 45 calls 7.70, today's close 12.47 +61%

Dec 30 Buy stock 6.62, today's close 7.64 + 15.4%

ProphetCharts

Index Commentary The DJIA formed a small spinning top that did not confirm Monday’s bearish harami…closed above its 20, 30 and 50 DMA. The SPX formed a small spinning top that did not confirm Monday’s bearish harami…closed above its 20, 30 and 50 DMA. The Nasdaq formed a small spinning top that was a new high close…its highest close since Nov. 5…closed above its Dec 9 resistance high and it 20, 30 and 50 DMA. The RUT formed small white candle that was a new high close…highest close since Nov. 4…closed above its Dec 19 resistance high and it 20, 30 and 50 DMA. Stocks to Watch on Wednesday Leading Stocks: Holding Above 30 DMA AYE…PCLN…BAP…FLR…JCOM…JEC…PCR…ATK…RTN…SNA…WMS…HAS…JOSB…AMZN…BIIB…BYI…HDB…LFC…PSSI…CERN…FWLT…MTW…QSII…VMI…OI…FLS…BCO…MOS…NDAQ…ROST…VIVO…AET…POT…UTX…APH…CAM…CCC…CIR…CL…DECK…EPR…ESI…GES…GILD…JW.A…MYGN…ACL…BLUD…DNA…HLF…OSIP…AGN…KEX…LAYN…RCI…NEU…PSYS…RIO…SHW…AMED…PETS…SOHU…BCR…CAM…FLIR…NGS…NOV…SPN…WAB…CTSH…FSTR…IIVI…K…MCRS…NIHD…PCP…SWN…AMX…HP…ADBE…AME…ANSS…ATW…CHU…GME…MBT…MON…NE…NILE…RIMM…AAPL…AFAM…EZPW…LNN…RIG…VIP Moving Above 30 DMA = 3 ICLR…MMM…SYNA Moving Below 30 DMA = 6 CBST…CELG…DLTR…ENDP…TECH…TEVA Staying Below 30 DMA GIS…PTNR…AXYS…URBN…MTD…SINA…PRGO…PPD…ESRX…STRA… CHTT…DV…IRIS…ISRG…SPTN Tuesday’s Action Moving Up: MA, V, PCLN, SCHN, ONXX, ANR, BTU, MS, NIHD, LAMR, CNX, POT, MEE, BRCM, CLF, AEM, ZION, MOS, AFAM, GDX, LCC Moving Down: STRA, FSLR, NUE, CF, SOHU, MON, ADM, GRMN, NDAQ Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Up

Markets Pause After Three White Soldiers

DJIA - 81.80, -0.91% SP500 - 4.35, -0.47% NASDAQ Comp. - 4.18, -0.26% Russell 2000 - 0.81, -0.16% Exchange NYSE NASD Advancing 2,481 1,542 Declining 1,358 1,299 Oil $48.81 +$2.47 Gold $857.20 -$21.60 SOX 223.29 +0.62 VIX 39.08 -0.11 The VIX moved down and did NOT confirm the move down in the SPX on Monday. Strongest Sectors: XLE +2.35%...XLU +1.41%...XLP +0.41% Weakest Sectors: XLF -1.66%...XLI -0.78%...XLV -0.48% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK, XLF Down Trending: Index Commentary The DJIA formed a bearish harami after a three white soldiers pattern…closed above its 20, 30 and 50 DMA. The SPX formed a bearish harami after a three white soldiers pattern…closed above its Dec 8 resistance high and it 20, 30 and 50 DMA. The Nasdaq formed a bearish harami after a three white soldiers pattern…closed above its Dec 9 resistance high and it 20, 30 and 50 DMA. The RUT formed a doji bearish harami after a three white soldiers pattern…closed above its Dec 19 resistance high and it 20, 30 and 50 DMA. Stocks to Watch on Tuesday Leading Stocks: Holding Above 30 DMA AYE…PCLN…BAP…DLTR…FLR…JCOM…JEC…PCR…ATK…RTN...SNA…WMS…HAS…JOSB…AMZN…BIIB…BYI…HDB…LFC…PSSI…CERN…FWLT…MTW…QSII…VMI…OI…FLS…BCO…MOS...NDAQ…ROST…VIVO…AET…POT...UTX…APH…CCC…CIR…CL…DECK…EPR…ESI…GES…GILD…JW.A…MYGN…ACL…BLUD…DNA…HLF…OSIP…AGN…WCG...KEX…LAYN…RCI…CELG…NEU…PSYS…RIO…SHW…AMED…PETS…SOHU…BCR…CAM…FLIR…NGS…NOV…SPN…WAB…CTSH…FSTR…IIVI…K…MCRS…NIHD…PCP…SWN… AMX…CBST…HP…TECH…TEVA…ADBE…AME…ANSS…ATW…CHU…GME…MBT…MON…NE…NILE…RIMM Moving Above 30 DMA = 6 AAPL…AFAM…EZPW…LNN…RIG…VIP Moving Below 30 DMA = 6 CHTT…DV…IRIS…ISRG…MMM…SPTN Staying Below 30 DMA GIS…AXYS…URBN…MTD…ICLR…SINA…PRGO…PPD…ESRX…STRA Monday’s Action Moving Up: FSLR, POT, MA, CF, CNX, GS, BTU, ANR, FWLT, AFAM, CLF, AGU, MEE, MOS, INFY Moving Down: STRA, PCLN, GDX, AEM, KRE, KMT, NUE, KBE, SCHN Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Up

New Year Starts With a Big Move Up

DJIA + 258.30, +2.94% SP500 + 28.55, +3.16% NASDAQ Comp. + 55.18, +3.50% Russell 2000 + 6.39, +1.28% Exchange NYSE NASD Advancing 3,073 2,094 Declining 707 754 Oil $46.34 +$1.74 Gold $878.80 -$4.80 SOX 221.74 +9.74 VIX 39.19 -0.81 The VIX moved down confirming the rise in the SPX on Wednesday; however the VIX rose from its low of the day going into the close. Strongest Sectors: XLY +5.01%...XLE +4.98%...XLK +3.76% Weakest Sectors: XLF +1.12%...XLP +1.42%...XLV +2.03% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK, XLF Down Trending: The first day of the new year was up. Some have been quoting research that since 1972 over 90% of the time when the first trading day of January is an up day the year is an up year. What that statistic doesn't reveal is what is the range of returns for those up years, do those up years experience any draw downs or how much does an up year pull back from its peak, along with a host of other statistical measurements that any good quant (quantitative analyst) would want to know. Don't misunderstand...we posted on October 10 the question..."does this finally mark the beginning of the end of the down trend? So far the technical evidence has been indicating this to be the case. While there likely were others, we're not aware of anyone else who on that early date was able to discern the technicals pointing to a potential bottom and change of trend. Whether the trend is up, sideways or down in 2009 a trader has the potential to make money when they focus on the actual technicals of trend, support and resistance and momentum, while following a proven strategy consistently; buying when they are supposed to buy and selling when they are supposed to sell, using sound risk management techniques and continually exercising discipline. We recently read one trader's opinion that he didn't believe the bear market was over and gave a list of isolated factors to support his opinion. Everyone is entitled to their opinion and certainly in the investment industry there is no end to opinions, many of which are free. We are always dismayed when skilled technicans, mediocre technicians, pretended technicians and those who don't even pretend to have technical proficiency state their opinion about the future as if they know the future. Many traders fall into the trap of believing opinions supported by a list of technical factors because of the list. We are espeically humored by predictions of the future that use the word "probability" as nothing more than a code word for their opinion. This is easily detected when they predict a future occurence weeks or months away as a high probability but offer no valid sample size for their opinion, generally accepted technical patterns or they predict a technical pattern that hasn't even formed yet. Also if you find the phrases "I think, we think, etc." in the place of valid technical observations these can also tip you off to it being a guess rather than a valid technical forecast. We share these observations because many people like to take short cuts in their trading and rely on pubicly available opinions or guesses and then wonder why their trading doesn't deliver the positive results they had desired. The beginning of the New Year is a time when many can get side tracked by all the guesses and opinions. Dave's Insight: Don't waste your time with people's opinions. Nobody has a crystal ball even if they are on tv, have a website or write an email. Trade trend, support and resistance and momentum. When people's opinions fail and they eventually do, one can still make money when they trade the markets and not people's thoughts about the market.

An observation about our Stocks to Watch list which we have been posting on during the past few weeks. This list has 120 stocks with good growth fundamentals. During the past 6 trading days, 41 of these stocks have risen above their 30 DMA. A few weeks ago just a few stocks were above their 30 DMA. As of Friday, only 18 of the 120 are below their 30 DMA. Continue to enjoy the list and watch for trading signals as they appear on the charts.

Stocks to Watch on Monday Leading Stocks: Holding Above 30 DMA AYE…PCLN…BAP…DLTR…FLR…JCOM…JEC…PCR…ATK…B…IRIS…SNA…WMS…HAS…JOSB…AMZN…BIIB…BYI…HDB…LFC…PSSI…CERN…FWLT…MTW…QSII…VMI…OI…FLS…BCO…NDAQ…ROST…VIVO…AET…UTX…APH…CAM…CCC…CIR…CL…DECK…DV…EPR…ESI…GES…GILD…JW.A…MYGN…NOV…ACL…BLUD…DNA…HLF…OSIP…AGN…KEX…LAYN…RCI…CELG…NEU…PSYS…RIO…SHW…AMED…PETS…SOHU…SPTN BCR…CAM…FLIR…NGS…NOV…SPN…WAB…CHTT…CTSH…FSTR…IIVI…K…MCRS…NIHD…PCP…SWN… AMX…CBST…HP…TECH…TEVA Moving Above 30 DMA = 13 ADBE…AME…ANSS…ATW…CHU…GME…ISRG…MBT…MMM…MON…NE…NILE…RIMM Moving Below 30 DMA = 2 AFAM…STRA Staying Below 30 DMA GIS…PTNR…AXYS…URBN…MTD…ICLR…LNN...AAPL…SINA…EZPW…PRGO…PPD…ESRX

Friday’s Action Moving Up: FSLR, MA, POT, CF, CLF, CNX, PCLN, MON, NIHD, GRMN, SCHN, MEE, GS, BTU, X, AGU, MOS, ANR, NUE, HANS, FWLT, NDAQ, ESRX, KMT, PNRA, LAMR, COH, SOHU, SINA, V, MS, UAUA, EBAY Moving Down: AFAM, STRA Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Up

Stocks End Year With Support Bounce Continuation

DJIA + 108.00, +1.25% SP500 + 12.61, +1.42% NASDAQ Comp. + 26.33, +1.70% Russell 2000 + 16.68, +3.46% Exchange NYSE NASD Advancing 3,212 2,264 Declining 665 680 Oil $44.60 +$5.57 Gold $883.60 +$14.30 SOX 212.17 +0.91 VIX 40.00 -1.63 The VIX moved down confirming the rise in the SPX on Wednesday. (click images to enlarge)

Strongest Sectors: XLF +3.22%...XLI +2.40%...XLY +1.79% Weakest Sectors: XLV +0.91%...XLP +0.97%...XLE +1.06% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK, XLF Down Trending: All nine sector ETFs rose on Wednesday. XLF was the leading sector for the second straight day. Oil rose over 14% on the eve of when the OPEC production cuts were scheduled to occur. Watch to see if this is just a counter trend move or turns into a trend change. One news based view that I saw was that the market was up on Wednesday and the volume was low so that indicated no conviction. We stated on Monday of last week to expect volume to be low in the two holiday shortened weeks and to expect movement to shift back and forth between buyers and sellers. That is what happened. The low volume on Wednesday, oh yes and Tuesday and Monday and Friday are not evidence of lack of conviction, rather it is evidence that many traders took time off. Period. The broad indices are in sideways trends so expect them to bounce between support and resistance until they breakout of the trading range. Expect this to occur whether it happens on low or high volume. The market this week acted precisely consistent with a sideways trend and a low volume holiday shortened week. Period. The head and shoulders bottom in each of the four major indices indicates a potential move up over the month of January. On the DJIA that is a move to the 10,200 area. Of course a good trader knows that patterns give the more probable move and price target and that the less probable move can still occur. Dave's Insight: Technical analysis is about probabilities, not certainties. ProphetCharts

Stocks to Watch on Friday Leading Stocks: Holding Above 30 DMA AYE…PCLN…BAP…DLTR…FLR…JCOM…JEC…PCR…ATK…B…IRIS…SNA…WMS…HAS…JOSB…AMZN…BIIB…BYI…HDB…LFC…PSSI…CERN…FWLT…MTW…QSII…VMI…OI…FLS…BCO…NDAQ…ROST…VIVO…AET…UTX…APH…CAM…CCC…CIR…CL…DECK…DV…EPR…ESI…GES…GILD…JW.A…MYGN…NOV…ACL…BLUD…DNA…HLF…OSIP…AGN…KEX…LAYN…RCI…CELG…NEU…PSYS…RIO…SHW…AMED…PETS…SOHU…SPTN...BCR…CAM…FLIR…NGS…NOV…SPN…WAB…AFAM…CHTT…CTSH…FSTR…IIVI…K…MCRS…NIHD…PCP…SWN Moving Above 30 DMA = 6 AMX…CBST…HP…STRA…TECH…TEVA Moving Below 30 DMA = 3 ANSS…ESRX…GME Staying Below 30 DMA SWN…MMM…AME…GIS…PTNR…AXYS…MON…MTD…URBN…ICLR…LNN...AAPL…TECH…EZPW…MOS…POT…PPD…RTN…SINA…WCG…MBT…PRGO…RIMM…NILE…PPD…CHU Wednesday’s Action Moving Up: MA, PCLN, FSLR, PNRA, STRA, GS, ZION, CF, V, SOHU, AGU, NDAQ, AEM, GDX, KRE, IPI, MS, MON, KMT, KBE Moving Down: ESRX, HANS Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Up

Classic Support Bounce on Tuesday

DJIA + 184.46, +2.17% SP500 + 21.22, +2.44% NASDAQ Comp. + 40.38, +2.67% Russell 2000 + 16.62, +3.57% Exchange NYSE NASD Advancing 3,134 2,000 Declining 752 930 Oil $39.03 -0.99 Gold $869.30 -$5.30 SOX 211.26 +9.31 VIX 41.63 -2.27 The VIX moved down confirming the rise in the SPX on Tuesday. Strongest Sectors: XLF +3.85%...XLY +3.77%...XLI +3,72% Weakest Sectors: XLU +1.53%...XPI +1.59%...XLK +1.87% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK, XLF Down Trending: The support bounce that we discussed in our webcast on Monday evening occurred on Tuesday. The market continued trading light volume slightly higher than on Monday just as we had expected. All nine ETF sectors moved higher on Tuesday. All nine sectors have now been in a sideways trading range or sideways trend for 4 weeks or more and are now listed as Sideways in our Sector Watch. The rally was reasonably broad for the light volume holiday shortened trading week as advancers led decliners 4 to 1 on the NYSE. On the Nasdaq advancers led decliners 2 to 1. In our Stocks to Watch list there were 12 stocks crossing above the 30 DMA to just one crossing below. Our Action watch list had 24 stocks Moving Up and 2 Moving Down. We mentioned last night the fact that the SOX PHLX Semiconductor Index was essentially flat on Monday was a bullish clue. We set up a virtual trade on MRVL with a buy stop at 6.62 which filled on Tuesday. We also showed charts on TXN and BRCM and mentioned they were also attractive setups. The SOX, MRVL, TXN and BRCM all had classic support bounce entries today. Stocks to Watch on Wednesday Leading Stocks: Holding Above 30 DMA AYE…PCLN…BAP…DLTR…FLR…JCOM…JEC…PCR…ATK…B…IRIS…SNA…WMS…HAS…JOSB…AMZN…BIIB…BYI…HDB…LFC…PSSI…CERN…FWLT…MTW…QSII…VMI…OI…FLS…BCO…NDAQ…ROST…VIVO…AET…ESRX…UTX…APH…CAM…CCC…CIR…CL…DECK…DV…EPR…ESI…GES…GILD…JW.A…MYGN…NOV…ACL…BLUD…DNA…HLF…OSIP…AGN…KEX…LAYN…RCI…CELG…NEU…PSYS…RIO…SHW…AMED…PETS…SOHU…SPTN BCR…CAM…FLIR…NGS…NOV…SPN…WAB Moving Above 30 DMA = 12 AFAM…ANSS…CHTT…CTSH…FSTR…GME…IIVI…K…MCRS…NIHD…PCP…SWN Moving Below 30 DMA = 1 CHU Staying Below 30 DMA SWN…MMM…STRA…AME…GIS…PTNR…TECH…AXYS…MON…MTD…URBN…ICLR…LNN...AAPL…TECH…EZPW…MOS…POT…PPD…RTN…SINA…TEVA…WCG…MBT…PRGO…RIMM…NILE…AMX…CBST…PPD Tuesday’s Action Moving Up: STRA, GS, X, AFAM, PCLN, HANS, SCHN, AGU, NDAQ, NUE, SOHU, ZION, CLF, MON, PNRA, KRE, GRMN, JASO, KMT, CF, BRCM, NIHD, KBE, ANR Moving Down: V, ESRX, Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Neutral

Light Volume Trading Continues

DJIA - 31.62, -0.37% SP500 - 3.38, -0.39% NASDAQ Comp. - 19.92, -1.30% Russell 2000 - 10.62, -2.23% Exchange NYSE NASD Advancing 1,480 826 Declining 2,358 2,079 Oil $40.02 +$2.31 Gold $874.60 +$4.10 SOX 201.95 -0.05 VIX 43.90 -0.52 Strongest Sectors: XLE +2.19%...XLU +0.21%...XLK +0.07% Weakest Sectors: XLY -1.92%...XLI -1.87%...XLB -1.81% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK Down Trending: XLF Trading volume rose on Monday but still traded well below average volume. Expect volume to increase on Tuesday and Wednesday while staying below average. The markets are closed on Thursday, New Year's Day. Year end tax selling will be finished on Wednesday and it will be interesting to see what instiutions will do next week. The broad indices continue to trade inside their sideways trading range. Friday which was the lightest full day trading volume this year, was just slightly ahead of Wednesday's half day volume. Monday's volume in many cases was ahead of Friday and just half of average volume. The Chart Signals suggest a greater probability of a rising market after the first of the year, however traders need to stay focued on what the market is doing. $SOX finished near unchanged which is a sign of strength on a down day. Individual semiconductor stocks like MRVL, BRCM, TXN and ALTR are exhibiting basing pattern formations and potential trend reversal. Stocks to Watch on Tuesday Leading Stocks: Holding Above 30 DMA AYE…PCLN…BAP…DLTR…FLR…JCOM…JEC…PCR…ATK…B…IRIS…SNA…WMS…HAS…JOSB…AMZN…BIIB…BYI…HDB…LFC…PSSI…CERN…FWLT…MTW…QSII…VMI…OI…CHU…FLS…BCO…NDAQ…ROST…VIVO…AET…ESRX…UTX…APH…CAM…CCC…CIR…CL…DECK…DV…EPR…ESI…GES…GILD…JW.A…MYGN…NOV…ACL…BLUD…DNA…HLF…OSIP…AGN…KEX…LAYN…RCI…CELG…NEU…PSYS…RIO…SHW…AMED…PETS…SOHU…SPTN Moving Above 30 DMA = 6 BCR…CAM…FLIR…NGS…NOV…SPN…WAB Moving Below 30 DMA = 9 AMX…ANSS…CBST…CTSH…FSTR…GME…NIHD…PCP…PPD Staying Below 30 DMA SWN…MMM…STRA…AME…GIS…PTNR…TECH…AXYS…MON…MTD…URBN…ICLR…LNN...AAPL…TECH…EZPW…MCRS…MOS…POT…PPD…RTN…SINA…TEVA…WCG…AFAM…MBT…PRGO…RIMM… CHTT…NILE Monday’s Action Moving Up: POT, AEM, AGU, MOS, IPI, SOHU, AFAM, FSLR, MON, GDX Moving Down: MA, V, CLF, NUE, KMT, NIHD, ESRC, SINA, LAMR, NDAQ, ANR, GRMN, HANS Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Down

Markets Move Higher on Light Volume

DJIA + 47.07, +0.56% SP500 + 4.65, +0.54% NASDAQ Comp. + 5.34, +0.35% Russell 2000 + 6.28, +1.33% Exchange NYSE NASD Advancing 2,310 1,702 Declining 792 1,102 Oil $37.71 +$2.36 Gold $870.50 +$23.20 SOX 202.00 -0.89 VIX 43.38 -0.83 Strongest Sectors: XLE +1.35%...XLB +1.23%...XLY +1.12% Weakest Sectors: XLK -0.13%...XLV +0.08%...XLF +0.09% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK Down Trending: XLF Stocks traded very light volume on Friday as expected. Volume was slightly above the volume on Christmas Eve which was just a half day of trading. Expect some year end tax selling next week through New Years Eve on Wednesday. Next week is again a holiday shortened week with the markets closed Thursday for New Years Day. Stocks to Watch on Monday Leading Stocks: Holding Above 30 DMA AYE…PCLN…BAP…DLTR…FLR…JCOM…JEC…PCR…ATK…B…IRIS…SNA…WMS…HAS…JOSB…AMZN…BIIB…BYI…HDB…LFC…PSSI…AMX…CERN…FWLT…MTW…QSII…VMI…OI…CHU…FLS…BCO…NDAQ…ROST…VIVO…AET…ESRX…UTX…APH…CAM…CCC…CIR…CL…DECK…DV…EPR…ESI…GES…GILD…JW.A…MYGN…NOV…PCP…ACL…BLUD…DNA…HLF…OSIP…AGN…KEX…LAYN…RCI…CELG…NEU…ANSS…CBST…GME…NIHD…PSYS…RIO…SHW Moving Above 30 DMA = 6 AMED…CTSH…FSTR…PETS…SOHU…SPTN Moving Below 30 DMA = 3 CHTT…FLIR…NILE Staying Below 30 DMA SWN…MMM…STRA…BCR…AME…GIS…PTNR…TECH…AXYS…MON…MTD…URBN…ICLR…LNN...AAPL…TECH…EZPW…MCRS…MOS…NGS…POT…PPD…RTN…SINA…SPN…TEVA…WCG…WAB…AFAM…MBT…PRGO…RIMM Friday’s Action Moving Up: BTU, GDX, NUE, POT, MOS, X, AGU, CLF, FSLR, CNX, SOHU, IPI, ESRX, MEE, SCHN, SINA, AEM Moving Down: STRA, AFAM, MA, PCLN, INFY Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Down

It Is Now the Wee Hours of Christmas Morning...

and I am pondering one of my favorite passages from Charles Dickens’ A Christmas Carol. It was this same time of night when Scrooge was approached by the ghost of his partner Jacob Marley: “’But you were always a good man of business, Jacob,’ faltered Scrooge, who now began to apply this to himself. “Business!” cried the Ghost, wringing its hands again. “Mankind was my business; charity, mercy, forbearance, and benevolence were, all, my business. The dealings of my trade were but a drop of water in the comprehensive ocean of my business!” May we all, like Scrooge, learn to live in the present to make a better future for everyone with whom we associate. May a positive spirit of change and improvement bless your life this day and every day during the coming New Year! Merry Christmas and Happy New Year!

Markets Move Higher on Christmas Eve

DJIA + 48.99, +0.58% SP500 + 2.26, +0.26% NASDAQ Comp. + 3.36, +0.22% Russell 2000 + 1.85, +0.39% Exchange NYSE NASD Advancing 2,150 1,441 Declining 1,489 1,284 Oil $35.35 -$3.63 Gold $847.30 +$9.90 SOX 202.89 +2.02 VIX 44.21 -0.81 Strongest Sectors: XLF +2.17%...XLP +0.87%...XLY +0.73% Weakest Sectors: XLE -0.38%...XLV -0.35%...XLB +0.09% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK Down Trending: XLF The broad indices rose on light volume in a half day of trading on Wednesdy. Next week will be a holiday shortened trading week also. The VIX confirmed the SPX move up on Wednesday. Stocks to Watch on Friday Leading Stocks: Holding Above 30 DMA AYE…PCLN…BAP…DLTR…FLR…JCOM…JEC…PCR…ATK…B…IRIS…SNA…WMS…HAS…JOSB…AMZN…BIIB…BYI…HDB…LFC…PSSI…AMX…CERN…FWLT…MTW…QSII…VMI…OI…CHU…FLS…BCO…NDAQ…ROST…VIVO…AET…ESRX…UTX…APH…CAM…CCC…CIR…CL…DECK…DV…EPR…ESI…GES…GILD…JW.A…MYGN…NILE…NOV…PCP…ACL…BLUD…DNA…HLF…OSIP…AGN…CHTT…KEX…LAYN…RCI… CELG…NEU Moving Above 30 DMA = 8 ANSS…CBST…FLIR…GME…NIHD…PSYS…RIO…SHW Moving Below 30 DMA = 4 AFAM…MBT…PRGO…RIMM Staying Below 30 DMA SWN…MMM…PETS…STRA…BCR…AME…GIS…PTNR…TECH…AXYS…MON…MTD…URBN…ICLR…LNN...AAPL…TECH…CTSH…EZPW…FSTR…MCRS…MOS…NGS…POT…PPD…RTN…SINA…SOHU…SPN…TEVA…WCG… SPTN…WAB Wednesday’s Action Moving Up: MON, GS Moving Down: FSLR, AFAM, ANR, POT, SCHN, BTU, CLF, ESRX, V Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Down

Indices Move Lower on Christmas Eve Eve

DJIA - 100.28, -1.18% SP500 - 8.47, -0.97% NASDAQ Comp. - 10.81, -0.71% Russell 2000 - 6.43, -1.35% Exchange NYSE NASD Advancing 1,497 1,052 Declining 2,307 1,846 Oil $38.98 -$0.93 Gold $837.40 -$9.80 SOX 200.87 -5.79 VIX 45.02 +1.03 Strongest Sectors: XLE +0.22%...XLV +0.04%...XLI -0.31% Weakest Sectors: XLF-2.37%...XLK -1.39%...XLU -1.14% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK Down Trending: XLF On the eve of Christmas Eve the broad indices moved lower on light volume. As we said in our webcast Monday evening we expected price action to be somewhat random on lighter volume on this holiday shortened week. Buyers and sellers alternating control during each trading day and that is what essentially happened on Tuesday. NYSE volume was less than 1 billion shares which is the lowest full day volume since August. Even though the broad indices were down a fair number of the stocks in our watch lists moved higher. There were more NYSE and Nasdaq advancers and fewer decliners on Tuesday than on Monday. DECK fell 3 cents holding in the $76 horizontal resistance area. PCLN rallied 6.55% moving back to the $70 horizontal resistance area on Tuesday forming a bullish engulfing pattern after Monday’s pull back. We wish you and yours a Merry Christmas and Happy Holidays! Index Commentary The DJIA did not confirm Monday’s hammer and stayed above Monday’s low and its 20 and 30 DMA. The SPX, Nasdaq and RUT all formed an inside day. The market will only be open a half day on Christmas Eve. Expect volume to be light. Stocks to Watch on Wednesday Leading Stocks: Holding Above 30 DMA AYE…PCLN…BAP…DLTR…FLR…JCOM…JEC…PCR…ATK…B…IRIS…SNA…WMS…HAS…JOSB…AMZN…BIIB…BYI…HDB…LFC…PSSI…AMX…CERN…FWLT…MTW…QSII…VMI…OI…CHU…FLS…BCO…NDAQ…ROST…VIVO…AET…ESRX…UTX…APH…CAM…CCC…CIR…CL…DECK…DV…EPR…ESI…GES…GILD…JW.A…MYGN…NILE…NOV…PCP…ACL…BLUD…DNA…HLF…OSIP…AGN…CHTT…RIMM… KEX…LAYN…RCI Moving Above 30 DMA = 5 AFAM…CELG…MBT…NEU…PRGO Moving Below 30 DMA = 5 ANSS…GME…PSYS…SPTN…WAB Staying Below 30 DMA SWN…MMM…FLIR…PETS…STRA…BCR…AME…GIS…PTNR…TECH…AXYS…MON…MTD…URBN…ICLR…LNN...AAPL…TECH…SHW…CBST…CTSH…EZPW…FSTR…MCRS…MOS…NGS…NIHD...POT…PPD…RIO…RTN…SINA…SOHU…SPN…TEVA…WCG Tuesday’s Action Moving Up: PCLN, FSLR, POT, SCHN, NUE, ONXX, AEM, AFAM, CF, CLF, HANS, GDX, AGU Moving Down: MA, PNRA, SINA, GS, ESRX, BRCM, ZION Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Down

Stocks Drift Lower to Start Holiday Shortened Week

DJIA - 59.42, -0.69% SP500 - 16.25, -1.83% NASDAQ Comp. - 31.97, -2.04% Russell 2000 - 11.19, -2.30% Exchange NYSE NASD Advancing 1,176 981 Declining 2,676 1,908 Oil $39.91 -$2.45 Gold $847.20 +$9.80 SOX 206.66 -5.18 VIX 44.56 -0.82 Strongest Sectors: XLP -0.95%...XLV -2.07%...XLU -2.20% Weakest Sectors: XLB -4.96%...XLF -4.58%...XLE -4.24% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK Down Trending: XLF February oil prices fell as oil trading rotated to the February contracts today after expiration of the January contract on Friday. The VIX again did not confirm the move down in the SPX. Look for lighter volume this holiday shotened week with a partial trading day on Wednesday, Christmas Eve and no trading on Thursday, December 25 Christmas day. Expect sellers and buyers to each take their turn moving stock prices this week and next. At this point a continuation of the current trading range betwee support and resistance are expected to continue. (click images to enlarge) ProphetCharts Index Commentary The DJIA formed a hammer at the 30 DMA after Friday’s inverted hammer. The SPX fell below its 30 DMA and then bounced 14 points to close down but above it s30 DMA. Friday’s inverted hammer did not confirm. The Nasdaq fewll to its 30 DMA and bounced 29 points to close above its 30 DMA and below its 50 DMA. The RUT formed a bearish engulfing pattern with a lower shadow as the RUT bounced off its 30 DMA and rose 15 points in the last half hour of trading to closed 5 points below its 50 DMA. Many of our Holding Above 30 DMA stocks are in bull flag pullbacks! Stocks to Watch on Tuesday Leading Stocks: Holding Above 30 DMA AYE…PCLN…BAP…DLTR…FLR…JCOM…JEC…PCR…ATK…B…IRIS…SNA…WMS…HAS…JOSB…AMZN…BIIB…BYI…HDB…LFC…PSSI…AMX…CERN…FWLT…GME…MTW…QSII…VMI…WAB…OI…CHU…FLS…MBT…BCO…NDAQ…ROST…VIVO…AET…ESRX…UTX…ANSS…APH…CAM…CCC…CIR…CL…DECK…DV…EPR…ESI…GES…GILD…JW.A…MYGN…NILE…NOV…PCP…SPTN…ACL…BLUD…DNA…HLF…OSIP…PSYS… AGN…CHTT…RIMM Moving Above 30 DMA = 3 KEX…LAYN…RCI Moving Below 30 DMA = 20 CBST…CELG…CTSH…EZPW…FSTR…MCRS…MOS…NEU…NGS…NIHD..POT…PPD…PRGO…RIO…RTN…SINA..SOHU..SPN…TEVA…WCG Staying Below 30 DMA SWN…MMM…FLIR…PETS…STRA…BCR…AME…GIS…PTNR…TECH…AXYS…AFAM…MON…MTD…URBN…ICLR…LNN...AAPL…MBT…TECH…SHW Monday’s Action Moving Up: STRA Moving Down: MA, FSLR, POT, MON, SINA, CNX, GS, X, MOS, PCLN, CLF, PNRA, CF, ZION, SOHU, ANR, AGU, BTU, FWLT, MEE, NUE, V, ESRX, IPI, KMT, AEM, GDX, HANS, AFAM ADM, KRE, NIHD, MS, COH, LAMR, SCHN, NDAQ, KBE Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Down

Stocks Stablilize as Auto Industries Receives Help

DJIA - 25.88, -0.30% SP500 + 2.60, +0.29% NASDAQ Comp. + 11.95, +0.77% Russell 2000 + 7.09, +1.48% Exchange NYSE NASD Advancing 2,276 1,451 Declining 1,540 1,506 Oil $33.87 -$2.35 Gold $837.40 -$23.20 SOX 211.84 +2.89 VIX 44.93 -2.41 Strongest Sectors: XLK +0.33%...XLI +0.13%...XLV +0.00% Weakest Sectors: XLB -3.23%...XLF -1.69%...XLP -1.65% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK Down Trending: XLF The DJIA slipped 25 points as the SPX, Nasdaq and RUT rose on Friday as a financial lifeline was extended to GM and Chrysler. Ford said they did not need cash at this time. Thursday's falling VIX while the SPX also fell appears to again given a clue to Friday's positive market movement. DECK rose for its fourth straight day on Friday $2.72 or 3.71%. PCLN fell just 85 cents on Friday at a key resistance level of $85. Watch for potential breakout beginning on Monday. (click images to enlarge)

Index Commentary The DJIA formed an inverted hammer closing above its 30 DMA and below its 50 DMA. The SPX and Nasdaq are both forming a pennant pattern since Tuesday and closed just below their 50 DMA and above their 20 and 30 DMA. ProphetCharts The RUT closed above its 50 DMA for the second time in three days while holding above its 20 and 30 DMA. Stocks to Watch on Monday 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…HDB…LFC…PSSI…AMX…CERN…FWLT…GME…MTW…NEU…QSII…VMI…WAB…OI…PPD…CHU…FLS…MBT…RIO…BCO…MOS…NDAQ…ROST…VIVO…AET…ESRX…NGS…POT…UTX…ANSS…APH…CAM…CCC…CIR…CL…DECK…DV…EPR…ESI…GES…GILD…JW.A…MYGN…NIHD…NILE…NOV…PCP…SINA…SPTN…TEVA…ACL…BLUD…CBST…DNA…HLF…SOHU…CELG…OSIP…PRGO…PSYS Moving Above 30 DMA = 7 AGN…CHTT…CTSH…MCRS…RIMM…SPN…WCG

Moving Below 30 DMA = 2 LAYN…SHW Staying Below 30 DMA SWN…MMM…FLIR…PETS…STRA…BCR…AME…GIS…PTNR…TECH…AXYS…RCI…AFAM…MON…MTD…URBN…ICLR…LNN... AAPL…MBT…TECH… KEX Friday’s Action Moving Up: MA, AEM, FSLR, ESRX, ONXX, KMT, GDX Moving Down: STRA, MON, CF, POT, FWLT, AGU, MOS, IPI, ZION, CLF, PCLN, MS, COH Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Neutral

Stocks Fall Over Economic, Auto and Oil Concerns

DJIA - 219.35, -2.49% SP500 - 19.14, -2.12% NASDAQ Comp. - 26.94, -1.71% Russell 2000 - 7.42, -1.52% Exchange NYSE NASD Advancing 1,573 1,097 Declining 2,268 1,777 Oil $36.22 -$3.84 Gold $860.60 -$7.90 SOX 208.95 -12.21 VIX 47.34 -2.50 Strongest Sectors: XLU +0.84%...XLV +0.73%...XLP +0.34% Weakest Sectors: XLE -5.82%...XLB -3.84%...XLI -3.51% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK Down Trending: XLF The DJIA, SPX, Nasdaq and RUT fell during the last 3 hours of trading over continued economic woes, concerns in the auto industry and falling oil prices impact on oil stocks. Once again the VIX did not confirm the drop in the SPX today as the VIX also moved lower to 47.34. Typically this suggests fear is falling which generally is short-term bullish. We will stay tuned on Friday to see if a rally occurs or if the VIX gets rises. Oil closes under $40 for the first time since 2004. Falling demand from global recession continues to fuel the drop in oil prices not withstanding OPEC’s move to cut production. DECK rose again on Thursday 2.67 or 3.78%. PCLN fell just 21 cents on Thursday. Index Commentary The DJIA, SPX, Nasdaq and RUT all closed below their 50 DMAs and above their 20 and 30 DMAs. 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…HDB…LFC…PSSI…AMX…CERN…FWLT…GME…MTW…NEU…QSII…VMI…WAB…OI…PPD…CHU…FLS…MBT…RIO…BCO…MOS…NDAQ…ROST…SHW…VIVO…AET…ESRX…NGS…POT…UTX…ANSS…APH…CAM…CCC…CIR…CL…DECK…DV…EPR…ESI…GES…GILD…JW.A…MYGN…NIHD…NILE…NOV…PCP…SINA…SPTN…TEVA… ACL…BLUD…CBST…DNA…HLF…SOHU Moving Above 30 DMA = 5 CELG…LAYN…OSIP…PRGO…PSYS Moving Below 30 DMA = 3 AGN…KEX…SPN Staying Below 30 DMA SWN…MMM…FLIR…PETS…STRA…BCR…AME…CHTT…GIS…PTNR…TECH…AXYS…RCI…AFAM…MON…MTD…URBN…ICLR…CTSH…LNN...MCRS… AAPL…MBT…TECH Thursday’s Action Moving Up: STRA, GS, HANS Moving Down: POT, X, ANR, CF, NUE, FSLR, CNX, GDX, AEM, SCHN, BTU, FWLT, MOS, AGU, MEE, GRMN, CLF, BRCM, MON, PNRA Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Down

RUT Rises, DJIA, SPX and Nasdaq Pullback While VIX Falls

DJIA - 99.80, -1.12% SP500 - 8.76, -0.96% NASDAQ Comp. - 10.58, -0.67% Russell 2000 + 3.74, +0.77% Exchange NYSE NASD Advancing 2,267 1,496 Declining 1,566 1,377 Oil $40.06 -$3.54 Gold $867.50 +$25.80 SOX 221.16 -0.35 VIX 49.84 -2.53 Strongest Sectors: XLY +0.55%...XLB +0.08%...XLI +0.04% Weakest Sectors: XLU -3.03%...XLK -1.94%...XLF -0.93% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK Down Trending: XLF The DJIA, SPX and Nasdaq pulled back on Wednesday while holding above the S1 level of Tuesday’s large white candle. The VIX did not confirm the down move in the SPX today as the VIX also moved lower to 49.84, just the second close below 50 in the past 10 weeks. This has bullish implications as it suggests fear did not rise as the SPX fell. The SOX was stronger that the Nasdaq today suggesting a lack of weakness in semiconductors. Also a review of the charts on the SPDR sector ETFS shows eight of the nine sectors have changed from down to neutral trend. We’ll continue to watch the sectors for a break above resistance to see if any of the trends move into an intermediate term uptrend. Oil fell another 3.54 to close at a new 52-week low 0f $40.06 as OPEC announced another 2.2 million bpd production cut effective Jan. 1. OPEC members have a reputation for exceeding production quotas, so some are skeptical about members honoring the cuts. Oil’s drop in price since July is being fueled by demand destruction from global recession factors. DECK one of Friday’s support bounce Stocks to Watch moved up another 3.49 or 5.2%. PCLN rose 4.32% on Wednesday. We placed an at support above the 20, 30 and 50 DMA entry on a real time virtual trade in our Dec. 10 webcast. We purchased 10 Jan 70 calls for 2.85. The close mark for Wednesday was $5.65, a 98% gain in just one week. Dave is teaching a two day Advanced Technical Analysis Workshop in Orlando. Index Commentary The DJIA formed a bearish harami that stayed above Tuesday’s S1 support level while closing for the second straight day above its 50 DMA. The SPX formed a bearish harami that found buyers just above Tuesday’s S1 level and again closed above its 50 DMA. The Nasdaq formed a white spinning top bearish harami that held above Tuesday’s S1 support level and fell just below its 50 DMA. The RUT moved higher forming a white spinning top and closed above its 50 DMA for the first time since Sep. 22. Stocks to Watch on Thursday 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…HDB…LFC…PSSI…AMX…CERN…FWLT…GME…MTW…NEU…QSII…VMI…WAB…OI…PPD…CHU…FLS…MBT…RIO…BCO…MOS…NDAQ…ROST…SHW…VIVO…AET…ESRX…NGS…POT…UTX…AGN…ANSS…APH…CAM…CCC…CIR…CL…DECK…DV…EPR…ESI…GES…GILD…JW.A…KEX…MYGN…NIHD…NILE…NOV…PCP…SINA…SPN…SPTN…TEVA Moving Above 30 DMA = 6 ACL…BLUD…CBST…DNA…HLF…SOHU Moving Below 30 DMA = 3 AAPL…MBT…TECH Staying Below 30 DMA LAYN…OSIP…SWN…MMM…FLIR…PETS…STRA…BCR…AME…CHTT…GIS…PRGO…PTNR…TECH…AXYS…RCI…AFAM…MON…MTD…URBN… ICLR…CTSH…LNN...MCRS Wednesday’s Action Moving Up: FSLR, POT, GS, PCLN, STRA, SCHN, CLF, HANS, NUE, SOHU, PNRA, CNX, X, MOS, FWLT, ANR, IPI, COH, INFY, ONXX Moving Down: ESRX, NDAQ Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Down

Friday's Higher Low Support Bounce Follows Through...Indices Close Above 50 DMA

DJIA + 359.15, +4.20% SP500 + 44.61, +5.14% NASDAQ Comp. + 81.55, +5.41% Russell 2000 + 30.28, +6.69% Exchange NYSE NASD Advancing 3,274 2,278 Declining 604 660 Oil $43.60 -$0.91 Gold $841.70 +$6.30 SOX 221.51 +12.29 VIX 52.37 -4.39 Strongest Sectors: XLF +11.18%...XLB +6.12%...XLY +5.32% Weakest Sectors: XLP +2.34%...XLE +3.10%...XLU +3.41% Sector Watch Up Trending: Sideways: XLE, XLP, XLU Down Trending: XLF, XLY, XLV, XLI, XLB, XLK The FOMC lowered the Fed Funds rate on Tuesday giving catalyst to the continuation of the short-term up trend that has been in place for the past three weeks, forming an inverse head and shoulders pattern and a bull flag before today. The stocks we posted comments on Friday and suggested on Monday to watch bounced with above average returns today: ANSS +6.50%, EPR +18.18%, NDAQ +12.66%, DECK +7.96%, NILE +7.25%. Also on Monday we highlighted DIA which rose 4.16% today. Also last week we posted on XLF as the strongest sector of the past three weeks rose 11.18% today. Index Commentary The DJIA confirmed Friday’s hammer and bullish harami while closing above its 50 DMA. The SPX confirmed Friday’s hammer closing above its 50 DMA. The Nasdaq confirmed its piercing line pattern bouncing off its higher low and closing just above its 50 DMA. The RUT confirmed Friday’s piercing line pattern while bouncing off its higher low and closing just below its 50 DMA. Stocks to Watch on Wednesday 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…HDB…LFC…PSSI…AMX…CERN…FWLT…GME…MTW…NEU…QSII…VMI…WAB…OI…PPD…CHU…FLS…MBT…RIO…AAPL…BCO…MOS…NDAQ…ROST…SHW…VIVO… AET…ESRX…NGS…POT…UTX Moving Above 30 DMA = 26 AGN…ANSS…APH…CAM…CCC…CIR…CL…DECK…DV…EPR…ESI…GES…GILD…JW.A…KEX…MBT…MYGN…NIHD…NILE…NOV…PCP…SINA…SPN…SPTN…TECH…TEVA Moving Below 30 DMA = 0 None Staying Below 30 DMA LAYN…OSIP…SOHU…SWN…MMM…FLIR…PETS…STRA…BCR…ACL…AME…CBST…CHTT…GIS…PRGO…PTNR…TECH…AXYS…RCI…AFAM…HLF…MON…MTD…URBN… ICLR…CTSH…LNN...MCRS Tuesday’s Action Moving Up: FSLR, GS, POT, MA, STRA, CF, PCLN, MON, MOS, AGU, X, NDAQ, PNRA, AEM, ADM, GDX, SCHN, KBE, ZION, NUE, ESRX, MS, SOHU, V, CNX, HANS, SINA, KRE, CLF, KMT, ONXX, NIHD, EBAY, COH, IPI, GRMN, BTU, FWLT, MEE, AFAM, BRCM, LAMR, LCC, UAUA, Moving Down: None Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Down

Markets Give Back Friday's Gains

DJIA - 65.15, -0.75% SP500 - 11.16, -1.27% NASDAQ Comp. - 32.38, -2.10% Russell 2000 - 15.86, -3.39% Exchange NYSE NASD Advancing 1,098 724 Declining 2,722 2,134 Oil $44.51 -$1.77 Gold $835.40 +$16.50 SOX 209.22 -3.72 VIX 56.76 +2.48 Strongest Sectors: XLI -0.04%...XLP -0.09%...XLV -0.20% Weakest Sectors: XLF -4.12%...XLU -1.56%...XLK -1.11% Sector Watch Up Trending: Sideways: XLE, XLP, XLU Down Trending: XLF, XLY, XLV, XLI, XLB, XLK Stock indices pulled back on Monday and held above support. As we stated Friday, watch for confirmation of Friday's support bounce...well, confirmation did not occur. So continue to watch on Tuesday. Watch for any breaks of support that would indicate equities are headed back to the lower end of the trading range of the past 9 weeks before they are headed higher.

As long as charts stay above their recent break outs of inverse head and shoulders, double bottoms and other reversal patterns, look for short-term entry to the upside.

Watch the stocks we mentioned in Friday's post for support bounce follow through and our Stocks to Watch for Tuesday list.

Index Commentary

The DJIA did not confirm Friday's hammer and bullish harami...formed an inside day while clsoing just below its 30 DMA.

The SPX did not confirm Friday's hammer as formed a black spinning top with a higher low while closing just below its 30 DMA.

The Nasdaq did not confirm Friday's piercing line pattern while making a higher low and closing below its 30 DMA.

The RUT did not confirm Friday's piercing line pattern while making a higher low and closing below its 30 DMA.

ProphetCharts

Stocks to Watch on Tuesday 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…HDB…LFC…PSSI…AMX…CERN…FWLT…GME…MTW…NEU…QSII…VMI…WAB…OI…PPD…CHU…FLS…MBT…RIO…AAPL…BCO…MOS…NDAQ…ROST…SHW…VIVO Moving Above 30 DMA = 5 AET…ESRX…NGS…POT…UTX Moving Below 30 DMA = 12 ANSS...CCC…CTSH…DECK…DV…EPR…GILD…JW.A…LNN...MCRS…NIHD…NILE Staying Below 30 DMA DGIT…LAYN…NOV…OSIP…SINA…SOHU…SWN…MMM…FLIR…PETS…SPTN…STRA…BCR…CL…ACL…AIRM…AME…CBST…CHTT…GIS…MYGN…PRGO…PTNR…TECH…AXYS…PRXL…RCI…AFAM…AGN…CAM…ESI…HLF…MON…MTD…PCP…POT…TEVA…URBN… ICLR…MBT Monday’s Action Moving Up: AEM, POT GDX, ESRX, PNRA, ANR Moving Down: STRA, FSLR, PCLN, AFAM, SOHU, CLF, ZION, CF, NIHD, LAMR, X, SCHN, NDAQ, GS, MEE, KBE, NUE, KRE, Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Down

Higher Low Support Bounce - Bullish Continuation

DJIA + 64.59, +0.75% SP500 + 6.14, +0.70% NASDAQ Comp. + 32.84, +2.18% Russell 2000 + 17.22, +3.82% Exchange NYSE NASD Advancing 2,278 1,941 Declining 1,518 902 Oil $46.28 -$1.70 Gold $818.90 -$6.00 SOX 212.94 +9.57 VIX 54.28 -1.50 Strongest Sectors: XLF +1.93%...XLK +1.19%...XLU +0.63% Weakest Sectors: XLE -0.98%...XLY -0.33%...XLP +0.13% Sector Watch Up Trending: Sideways: XLE, XLP, XLU Down Trending: XLF, XLY, XLV, XLI, XLB, XLK This was an interesting week with plenty of bad news that threatened to send the market lower. We saw some interesting non-confirmations from the VIX on Monday suggesting a pullback on Tuesday and on Thursday suggesting a rally on Friday both non-confirmation signals were successful. The SOX and the momentum line were also helpful in staying focused on the chart and see through the smoke screen being created by the news. In the end the market formed a higher low and is showing many positive breakouts in the indices and the stocks in our watchlists. We posed the question on October 10…”Was this the beginning of the end?” We also stated that if it was the market would take at least 4 to 8 weeks before it would likely be ready to go up. After 9 weeks it continues to appear that Oct. 10 may have been the beginning of the end. And while the markets are at best in a neutral trading range, they are showing signs of higher lows with bullish potential.

This is the time to watch closely leading stocks that are breaking above their 30 DMA and making higher lows for bullish trading opportunities. Watch our Stocks to Watch list each day for stocks closing above their 30 DMA.

Index Commentary The DJIA formed a hammer and bullish harami while making a higher low on Friday as it closed above its 30 DMA. The SPX formed a hammer as it made a higher low closing just below its 30 DMA. The Nasdaq formed a piercing line pattern while making a higher low and closing just above its 30 DMA. The RUT formed a formed a piercing line pattern while making a higher low and closing just above its 30 DMA. Watch for confirmation of these bullish candle patterns in the indices on Monday. Stocks to Watch on Monday 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…HDB…LFC…MCRS…PSSI…AMX…CERN…FWLT…GME…MTW…NEU…NIHD…QSII…VMI…WAB…OI…PPD…CHU…FLS…MBT…RIO Moving Above 30 DMA = 17 AAPL…ANSS…BCO…CCC…CTSH…DECK…DV…EPR…GILD…JW.A…LNN…MOS…NDAQ…NILE…ROST…SHW…VIVO Bullish Engulfing Pattern (click images to enlarge) Piercing Line Pattern Bull Flag Pattern ProphetCharts Moving Below 30 DMA = 3 ESRX…ICLR…MBT Staying Below 30 DMA DGIT…LAYN…NOV…OSIP…SINA…SOHU…SWN…MMM…FLIR…PETS…SPTN…STRA…BCR…CL…ACL…AIRM…AME…CBST…CHTT…GIS…MYGN…PRGO…PTNR…TECH…AXYS…PRXL…RCI…AFAM…AGN…CAM…ESI…HLF…MON…MTD…PCP…POT…TEVA…URBN Friday’s Action Moving Up: STRA, PCLN, AEM, PNRA, X, POT, CLF, IPI, BRCM, KRE, AFAM, HANS, SINA, NUE, V, KMT, SCHN, AGU, NDAQ Moving Down: MON, ZION, GS, ADM, BTU Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Down