MARKET COMMENTARY

It was a highly volatile market on Monday. The Dow had swung from a gain of 80 points to a big loss of over 160 points and then moved back up to a small gain of about 10 points only to see it finally fell back to a loss of 56 points. I believe the day traders and the pit traders on CME are having one of the most exciting times of their life. We seldom see this much of volatility in the market. Hence, you can see that the volume for the day was very high.

What this means is that the bulls and bears are really fighting each other out to gain control of the market. Although the bulls seemed to have the upper hand, I consider it a draw. We really need to see a bigger change of trading pattern to be able to trade it. At this time, only the day-traders can trade in this uncertain situation.

One of the meaningful patterns is a quick rebound, giving the market a breather to allow the bear traders to regroup. One thing is for sure. We have not seen the bottom of the market yet. The weekly chart still shows us some room for further drop.

One stock to watch is BRCM. It is poised for a bullish breakout at $29 soon. Have fun with it.

DJIA Daily Chart

The resistance for SPX is expected to be around 1350-60. Catch the reversal from near here.

SPX Daily Chart

The same comment for Nasdaq as I have given in last week’s post. It has not gone anywhere. I expect a last lap to 1770 before making a rebound. The situation, however, remains volatile. You may hold on to any open position but do not create ones.

NDX Daily Chart

STOCKS TO WATCH:

BRCM - Bullish breakout

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