MARKET COMMENTARY

The market continued to move in a more organized manner on Tuesday. This stability is reflected in the Volatility Index ($VIX) which showed only minor gain in a relatively strong falling market. The Dow had lost 231 points on Tuesday.

The Dow’s triangle pattern remains intact as of yesterday. I am still anxiously waiting for breakout to occur. At this juncture, it is still hard to tell which way it will break out to though there is a strong possibility of another bearish market on Wednesday. Anyway, do watch the 8,600 support for a breakout. When this happens, you can short the market (or long the put options).

Meanwhile, the Crude Oil price has dropped to the low of the pre-bullish run to the high of $147.27 per barrel. The OPEC is preparing to halt production when the member countries meet on next Monday. Looking at the momentum of the price movement, I think the Crude Oil will continue to fall for the next couple of days. A rebound should happen on Monday and the days after. We shall monitor this commodity as I see opportunity to take position to profit from this black gold.

Talking about gold, gold price too has dropped significantly. The talk about gold being a safe heaven for investors in the poor stock market condition has fizzled. I guess the chart is telling truth, not the market watchers. But do look out for a rebound soon. It looks like it is going to form a double bottom soon.

DJIA Daily Chart

Russell’s story is the same of the Dow. Watch for breakout if the market gets really bearish on Wednesday.

RUT Daily Chart

Although there is no triangle chart pattern formed in the Nasdaq chart, I feel that this index might break out sooner than other indexes. This might be a good choice for put options as early as the market opens.

NDX Daily Chart

STOCKS TO WATCH:

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