MARKET COMMENTARY

The equity markets stalled on Friday. This is a common phenomenon when a big surge or crash occurred the previous day. Usually this is a sign of continuation of current trend. Therefore, we can expect further slide of the market on Monday. I am a little discomfort by the 200-day moving average right below the price level of the Dow. This forms some support for the index. But we shall see what will happen next. Since I’m short of the market, I have set a target for 11000 for the Dow.

Crude Oil price should make a rebound after falling for quite some time. It is rather oversold at the moment. Anyway, I am of the opinion that it should drop further once the rebound is complete. If you wish to trade the oil market but can’t afford the crude oil futures (CL), you may opt for the ETF (USO) which behaves pretty much the same.

Financial stocks are still bearish. You may want to watch for potential ones that could sink further for a quick profit.

DJIA Daily Chart

The S&P moves the same way as the Dow. I expect both indexes to go hand in hand for now. What I am more interested in at this time is the Russell 2000. Russell is the most bullish index of all. I am watching if it is going to break the immediate support at 685.

RUT Daily Chart

The Nasdaq is moving sideways for about two weeks now. I am looking for breakout to identify new direction.

NDX Daily Chart

STOCKS TO WATCH:

NIL

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