| Market Direction with Ed Downs  |
 Dow 15 Minute Chart  Dow 60 Minute Chart | ||||||
Downside BreakDow breaks volatile range to downside.From prior commentary, "...The index has traded within the boundaries of this range for four sessions now, indicating that the Dow is likely gearing up for a potentially powerful move away from this range. ...a downside break of the lower trend line at 8,670 will likely fuel a move lower toward the bottom of the channel at around 8,500..." The Dow got the downside break from the wide trading range today, which sparked a significant decline to the lower boundary of the sloping channel at 8,500, seen in the 15 and 60 Minute Charts. Click Here for full Article | |||||||
| NYSE Chart of the Day with Jeff Drake YCC gapped down and then continued to fall during market hours today. This move begins to penetrate the upward trendline, and we have the heavy volume we like for reversal confirmation. However, it is still early, and we are waiting to see if it falls to 20 before taking a short position. |  Yankee Candle Co Inc | ||||||
NASDAQ Chart of the Day There's nothing fancy or difficult about NFLX's chart, and that is usually good. It had been in a steady upward trend, but today it gapped down and dropped hard to penetrate the trendline. Notice the volume decreasing as of late, but we now have a spike into today's move. |  Netflix Inc | ||||||
Lesson of the Day
|  Gold Fields Ltd Adr | ||||||
Industry Commentary Last Thursday I wrote, "Curiously, while prospecting today I located a disproportionate number of individual short candidates. This could be an early sign of a broad market pullback." Today certainly qualifies for a broad market pullback. Short of a sell off, but definitely a significant pullback. Virtually all the groups were down were down with the exception of Gold. We could pull down all the long groups, but taking a look at the charts suggest that may be premature. Oil and Health Care did pull back, but the charts weren't broken in today's trading. The next few trading sessions will determine if these trends are going to reverse. In Friday's post we were about equal weighted with long and short groups. Obviously the shorts worked out nicely. Hopefully you had some candidates ready in your watch list. We have added several groups to the reversing short candidate list. Today's selling was sparked by a weakening dollar, following comments from Treasury John Snow. The dollar hit a four month low against the euro. Why traders reacted so strongly today is a mystery, but it made picking the direction to trade an easy decision. Steve Belknap | |||||||
