MARKET COMMENTARY

It was a nice rebound on Wednesday, indeed. It was like a sunshine day after so many days of raining, not that the rally was actually good for trading. Looking at the way the market closed, it is possible that it will continue to be bullish for Thursday. One reason for the Dow and other indexes to surge was mainly attributed to the crash in oil price. In two days, oil price dropped for more than $10, due perhaps to the rise in US supply. Whatever the reason it is, the market certainly had the much needed reprieve from the downtrodden condition.

The Dow and the S&P are both out of the oversold pressure. If they stay higher for just another day or two, they are going to reach the neutral zone. It would then be another possibility of heavy selling again. The general markets are still in the bearish mode. So, we can take advantage of this favorable condition to trade for profit in the bear market. Try to watch for a larger bearish bar with heavy volume when both the Dow and the S&P hit the resistance areas or resistance at shown on the RSI and Slow Stochastics.

DJIA Daily Chart

SPX rebounded. It will break out of the downtrend line if it continues to move higher on Thursday.

SPX Daily Chart

It is apparent the NDX may reach the resistance earlier than the Dow and the S&P. It is my favorite for bearish reversal trade. This index moves faster than other broad market indexes.

NDX Daily Chart

STOCKS TO WATCH:

NIL

[GS rebounded. It did not trend lower as expected, but there is not entry anyway.]

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