MARKET COMMENTARY

The Dow continued to be bearish. It has made new low but rebounded at the final hours. After so many days of record low, the bulls may have some say while the bear may fear a short-term rally. Hence, the rebound can be considered a healthy move. I have identified a minor-resistance just right about the current level. The resistance is marked at 11400 level. The reason I do that is to identify an area where the beginning of a rally can happen. At the same time, I want to ensure that we do not take risk at this time. Continue shorting the market is not advisable at this moment. The risk/reward is not warranted.

Coincidentally, the 11400 is also the intersection of the downtrend line and the resistance line. This makes the break of the resistance a strong break, hence a rather extended rally as a result. I would prefer to watch out and stay put to continuing to add to my bear positions. I have no problem with further drop in the index, but I have big risk for a strong rally.

BRCM remains in my watch for bullish breakout. It stayed up very well. Watch it.

DJIA Daily Chart

The S&P is as much bearish as the Dow. But it has not shown any consolidation as the Dow. Therefore, there is not immediate resistance to break. I am looking at 1310 as the first and major resistance for rebound target.

SPX Daily Chart

The Nasdaq had a technical breakout on Friday. This should be a confirmed signal for more bearish move for this index. However, the rebound at the final hours almost reversed it breakout confirmation. Now, I would want to see what will happen on Monday before I pass a verdict on this index.

NDX Daily Chart

STOCKS TO WATCH:

BRCM - Bullish breakout

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