July 2006 Archives

There's not much to say about today's action. The indices just consolidated last week's gains on lighter volume -- which is bullish action. Just about all the indices made NR7 bars today so those bars should (could) be good ones to trade off of, if NR7s are your thing.

The Nasdaq's sitting just under that important 2100 level.

The futures are down a little this morning so I guess we'll find out if Friday's low volume rally was for real. If we head higher during the day I'm expecting a struggle at the early July highs on the S&P 500.

Potential swing trades:

It was a struggle on Wednesday and Thursday bit the bulls finished the week strong on Friday. But while the price action was undeniably impressive volume was lacking. Yes, I know I always complain about the upside volume but I have to call 'em as I see 'em. I'm not alone though, IBD has issues with the volume too ($):

For the week, the Nasdaq advanced 3.7%, its biggest price gain since the first week of the year. The S&P 500 climbed 3.1%. The Dow pocketed a 3.2% gain.

But the market's day-to-day action calls those gains into doubt. The major indexes twice posted large gains in weak volume. Combine those two divergent sessions with Thursday's distribution day, and you get a market that's not showing much conviction.

The market fares best when price and volume move higher in tandem. When stocks grab big price gains in light volume, that's a sign that institutional investors aren't buying shares with any kind of intensity. Without that institutional support, the market may be vulnerable to a pullback.

The big picture remains the same. The market is still in a downtrend.

Still, we must respect the price action, low volume or not. The true test will be whether the S&P 500 and the Dow can close above the trading range they've been in since mid-May. They've yet to make higher-highs relative to the June highs.

The Naz finally got through that 2075 area but there's still plenty of overhead resistance. Breaking the blue trendline will be key for th bulls.

The S&P closed just below the June highs. The bears have to be very nervous right about now...

The Dow looks a lot like the S&P, perched just under resistance.

The Russell had a big day on Friday but is still well within its longer-term downtrend and the descending trianlge I pointed out on Thursday.

I'm doing another flip of the Russell's short-term trend.

The question on Qualcomm is do I think it's bottomed. I see nothing in the chart that leads me to believe QCOM has bottomed. But I guess it all depends on your time frame. In the short term it's promising that the stock was finally able to close above its 10-day moving average. It's down a lot in a short period of time and could easily get a sizeable bounce from here. If it does get that bounce I'd expect the top of the channel and/or the 50-day moving average to be resistance.

If you've read this site for more than a few weeks you know it's almost impossible for me to be bullish on any stock that below both its 50 and 200-day moving averages. I'd be looking to short rallies as long as it's under those moving averages.

I was asked what I thought was a good entry and target price for shorting the Dow Transportation Index. My answer, as if often the case is "it depends". One possible entry is at or near the top of its downtrend channel whch, at the moment, is around $81. If I were to try to catch the top of the channel I'd only short it if it showed some weakness after it's reached the top of the channel. A bearish candle or two would be great.

One thing that I don't like about that strategy is that the index would be back above the June lows and the 200-day moving average. I'd be worried about those levels becoming support. So if I wanted to hang on to this position for a while I'd wait for it to close under the 200-day moving average again and then short it. My stop would go just above $80.

As for targets -- I don't see much support on the way down. There's a bit around 75, some more around 73 and then what looks like pretty solid support just above 68.

The futures point to a higher open today but still well within the ranges of the last few days. I'm hoping that we can break the ranges today. Up or down, it doesn't matter to me, although I do see a lot of good looking short setups on the daily charts.

Potential swing trades:

Jerry wrote:

I wanted to know your option on GOOG. For the first time GOOG posted good earnings and the stock goes down... :-?

I'm not sure if this is the first time it dropped post-earnings but I could be wrong... I've been watching GOOG the last several days as it's tried to climb back above its 200-day moving average. It looks ready to break down to me but I've thought that before and it didn't happen. I still think that late March gap is begging to be filled. The chart looks really bad to me in this shorter time frame:

But when we zoom out a bit I see a huge symmetrical triangle. Based on this view I'd wait for Google to break (if & when) the bottom of the triangle before shorting it.

On a related note, can Google withstand the apparent pressure that's on many other internet companies / stocks?

I think the Yahoo Inc. (YHOO) knife catchers have shot their wads. The stock looks ready to roll over and retest 25. It'll probably be healthy for those lows to be retested in order to shake out the weak holders. Besides, I rarely trust V bottoms, especially after such a huge drop.

eBay Inc. (EBAY) looks like death:

and even Rackable Systems (Nasdaq: RACK) blew-up post-earning tonight. Their story is that they sell servers to Google and other big internet companies. Clearly all is not well in this space:

I'm glad Jason, who is short the Dow, requested a Dow chart because I meant to post it in tonight's recap. I happened to catch Art Cashin's spot on CNBC this afternoon and he mentioned some Dow technicals. Apparently folks on the floor of the NYSE are focused on the 90-day moving average. Why the 90-day? Beats me, I can't recall ever hearing of people following that average. But I guess that's why I'm not on CNBC nor on the floor of the exchange. :d

So I've included the 90 DMA on the chart below -- it's the green line. As you see it was the high yesterday and after a short trip above the line today the Dow fell back. But what's more compelling to me are the two doji (reversal candlesticks) which both challenged the downward sloping trendline and closed below. Also note the stochastic sell signal.

This sure sees like a good, low-risk spot to be short the Dow. You've got the trendline, the 90 DMA and the early July highs as resistance just above. Those areas are logical and relatively close spots to place stops.

Except for a quick head fake higher just after the open the S&P 500 and Nasdaq stayed in the range they've defined over the past two days. I was as impressed with what the sellers did today as I was with the bulls' resolve the last two days. But we've got to see if they can break the bottom of these ranges.

The Nasdaq crossed 2075 and fell back for the third day in a row. It made a bearish engulfing pattern today and is very close to short-term overbought. I think the odds favor a breakdown here...

The S&P had another 200-day moving average battle again today. This time the bears won by pushing the index back under that line. On Balance Volume still looks ominous to me and stochastic just gave a sell signal.

The small caps got hit hardest today as the Russell 2000 lost 1.26%. It tagged its 50-day moving average and reversed lower to close under the 10-day moving average. It also looks like it's building a huge descending triangle. That's usually bearish... look out below? We'll see.

I've changed the Russell's short-term trend back to down since it's under the 10-day moving average, even if just barely.

The buyers appear to still be determined to push the market higher. We're set to gap up right to yesterday's highs on the indices. I have no idea if they can push through what's been resistance for the last two days but this should make for an interesting first hour.

Gold is en fuego this morning as it pops above its 50-day moving average. So I'm keeping a close eye on GLD and some gold stocks.

Potential swing trades:

There's not much to say about today's action. The indices just consolidated last week's gains on lighter volume -- which is bullish action. Just about all the indices made NR7 bars today so those bars should (could) be good ones to trade off of, if NR7s are your thing.

The Nasdaq's sitting just under that important 2100 level.

The futures are down a little this morning so I guess we'll find out if Friday's low volume rally was for real. If we head higher during the day I'm expecting a struggle at the early July highs on the S&P 500.

Potential swing trades:

It was a struggle on Wednesday and Thursday bit the bulls finished the week strong on Friday. But while the price action was undeniably impressive volume was lacking. Yes, I know I always complain about the upside volume but I have to call 'em as I see 'em. I'm not alone though, IBD has issues with the volume too ($):

For the week, the Nasdaq advanced 3.7%, its biggest price gain since the first week of the year. The S&P 500 climbed 3.1%. The Dow pocketed a 3.2% gain.

But the market's day-to-day action calls those gains into doubt. The major indexes twice posted large gains in weak volume. Combine those two divergent sessions with Thursday's distribution day, and you get a market that's not showing much conviction.

The market fares best when price and volume move higher in tandem. When stocks grab big price gains in light volume, that's a sign that institutional investors aren't buying shares with any kind of intensity. Without that institutional support, the market may be vulnerable to a pullback.

The big picture remains the same. The market is still in a downtrend.

Still, we must respect the price action, low volume or not. The true test will be whether the S&P 500 and the Dow can close above the trading range they've been in since mid-May. They've yet to make higher-highs relative to the June highs.

The Naz finally got through that 2075 area but there's still plenty of overhead resistance. Breaking the blue trendline will be key for th bulls.

The S&P closed just below the June highs. The bears have to be very nervous right about now...

The Dow looks a lot like the S&P, perched just under resistance.

The Russell had a big day on Friday but is still well within its longer-term downtrend and the descending trianlge I pointed out on Thursday.

I'm doing another flip of the Russell's short-term trend.

The question on Qualcomm is do I think it's bottomed. I see nothing in the chart that leads me to believe QCOM has bottomed. But I guess it all depends on your time frame. In the short term it's promising that the stock was finally able to close above its 10-day moving average. It's down a lot in a short period of time and could easily get a sizeable bounce from here. If it does get that bounce I'd expect the top of the channel and/or the 50-day moving average to be resistance.

If you've read this site for more than a few weeks you know it's almost impossible for me to be bullish on any stock that below both its 50 and 200-day moving averages. I'd be looking to short rallies as long as it's under those moving averages.

I was asked what I thought was a good entry and target price for shorting the Dow Transportation Index. My answer, as if often the case is "it depends". One possible entry is at or near the top of its downtrend channel whch, at the moment, is around $81. If I were to try to catch the top of the channel I'd only short it if it showed some weakness after it's reached the top of the channel. A bearish candle or two would be great.

One thing that I don't like about that strategy is that the index would be back above the June lows and the 200-day moving average. I'd be worried about those levels becoming support. So if I wanted to hang on to this position for a while I'd wait for it to close under the 200-day moving average again and then short it. My stop would go just above $80.

As for targets -- I don't see much support on the way down. There's a bit around 75, some more around 73 and then what looks like pretty solid support just above 68.

The futures point to a higher open today but still well within the ranges of the last few days. I'm hoping that we can break the ranges today. Up or down, it doesn't matter to me, although I do see a lot of good looking short setups on the daily charts.

Potential swing trades:

Jerry wrote:

I wanted to know your option on GOOG. For the first time GOOG posted good earnings and the stock goes down... :-?

I'm not sure if this is the first time it dropped post-earnings but I could be wrong... I've been watching GOOG the last several days as it's tried to climb back above its 200-day moving average. It looks ready to break down to me but I've thought that before and it didn't happen. I still think that late March gap is begging to be filled. The chart looks really bad to me in this shorter time frame:

But when we zoom out a bit I see a huge symmetrical triangle. Based on this view I'd wait for Google to break (if & when) the bottom of the triangle before shorting it.

On a related note, can Google withstand the apparent pressure that's on many other internet companies / stocks?

I think the Yahoo Inc. (YHOO) knife catchers have shot their wads. The stock looks ready to roll over and retest 25. It'll probably be healthy for those lows to be retested in order to shake out the weak holders. Besides, I rarely trust V bottoms, especially after such a huge drop.

eBay Inc. (EBAY) looks like death:

and even Rackable Systems (Nasdaq: RACK) blew-up post-earning tonight. Their story is that they sell servers to Google and other big internet companies. Clearly all is not well in this space:

I'm glad Jason, who is short the Dow, requested a Dow chart because I meant to post it in tonight's recap. I happened to catch Art Cashin's spot on CNBC this afternoon and he mentioned some Dow technicals. Apparently folks on the floor of the NYSE are focused on the 90-day moving average. Why the 90-day? Beats me, I can't recall ever hearing of people following that average. But I guess that's why I'm not on CNBC nor on the floor of the exchange. :d

So I've included the 90 DMA on the chart below -- it's the green line. As you see it was the high yesterday and after a short trip above the line today the Dow fell back. But what's more compelling to me are the two doji (reversal candlesticks) which both challenged the downward sloping trendline and closed below. Also note the stochastic sell signal.

This sure sees like a good, low-risk spot to be short the Dow. You've got the trendline, the 90 DMA and the early July highs as resistance just above. Those areas are logical and relatively close spots to place stops.

Except for a quick head fake higher just after the open the S&P 500 and Nasdaq stayed in the range they've defined over the past two days. I was as impressed with what the sellers did today as I was with the bulls' resolve the last two days. But we've got to see if they can break the bottom of these ranges.

The Nasdaq crossed 2075 and fell back for the third day in a row. It made a bearish engulfing pattern today and is very close to short-term overbought. I think the odds favor a breakdown here...

The S&P had another 200-day moving average battle again today. This time the bears won by pushing the index back under that line. On Balance Volume still looks ominous to me and stochastic just gave a sell signal.

The small caps got hit hardest today as the Russell 2000 lost 1.26%. It tagged its 50-day moving average and reversed lower to close under the 10-day moving average. It also looks like it's building a huge descending triangle. That's usually bearish... look out below? We'll see.

I've changed the Russell's short-term trend back to down since it's under the 10-day moving average, even if just barely.

The buyers appear to still be determined to push the market higher. We're set to gap up right to yesterday's highs on the indices. I have no idea if they can push through what's been resistance for the last two days but this should make for an interesting first hour.

Gold is en fuego this morning as it pops above its 50-day moving average. So I'm keeping a close eye on GLD and some gold stocks.

Potential swing trades:

There's not much to say about today's action. The indices just consolidated last week's gains on lighter volume -- which is bullish action. Just about all the indices made NR7 bars today so those bars should (could) be good ones to trade off of, if NR7s are your thing.

The Nasdaq's sitting just under that important 2100 level.

The futures are down a little this morning so I guess we'll find out if Friday's low volume rally was for real. If we head higher during the day I'm expecting a struggle at the early July highs on the S&P 500.

Potential swing trades:

It was a struggle on Wednesday and Thursday bit the bulls finished the week strong on Friday. But while the price action was undeniably impressive volume was lacking. Yes, I know I always complain about the upside volume but I have to call 'em as I see 'em. I'm not alone though, IBD has issues with the volume too ($):

For the week, the Nasdaq advanced 3.7%, its biggest price gain since the first week of the year. The S&P 500 climbed 3.1%. The Dow pocketed a 3.2% gain.

But the market's day-to-day action calls those gains into doubt. The major indexes twice posted large gains in weak volume. Combine those two divergent sessions with Thursday's distribution day, and you get a market that's not showing much conviction.

The market fares best when price and volume move higher in tandem. When stocks grab big price gains in light volume, that's a sign that institutional investors aren't buying shares with any kind of intensity. Without that institutional support, the market may be vulnerable to a pullback.

The big picture remains the same. The market is still in a downtrend.

Still, we must respect the price action, low volume or not. The true test will be whether the S&P 500 and the Dow can close above the trading range they've been in since mid-May. They've yet to make higher-highs relative to the June highs.

The Naz finally got through that 2075 area but there's still plenty of overhead resistance. Breaking the blue trendline will be key for th bulls.

The S&P closed just below the June highs. The bears have to be very nervous right about now...

The Dow looks a lot like the S&P, perched just under resistance.

The Russell had a big day on Friday but is still well within its longer-term downtrend and the descending trianlge I pointed out on Thursday.

I'm doing another flip of the Russell's short-term trend.

The question on Qualcomm is do I think it's bottomed. I see nothing in the chart that leads me to believe QCOM has bottomed. But I guess it all depends on your time frame. In the short term it's promising that the stock was finally able to close above its 10-day moving average. It's down a lot in a short period of time and could easily get a sizeable bounce from here. If it does get that bounce I'd expect the top of the channel and/or the 50-day moving average to be resistance.

If you've read this site for more than a few weeks you know it's almost impossible for me to be bullish on any stock that below both its 50 and 200-day moving averages. I'd be looking to short rallies as long as it's under those moving averages.

I was asked what I thought was a good entry and target price for shorting the Dow Transportation Index. My answer, as if often the case is "it depends". One possible entry is at or near the top of its downtrend channel whch, at the moment, is around $81. If I were to try to catch the top of the channel I'd only short it if it showed some weakness after it's reached the top of the channel. A bearish candle or two would be great.

One thing that I don't like about that strategy is that the index would be back above the June lows and the 200-day moving average. I'd be worried about those levels becoming support. So if I wanted to hang on to this position for a while I'd wait for it to close under the 200-day moving average again and then short it. My stop would go just above $80.

As for targets -- I don't see much support on the way down. There's a bit around 75, some more around 73 and then what looks like pretty solid support just above 68.

The futures point to a higher open today but still well within the ranges of the last few days. I'm hoping that we can break the ranges today. Up or down, it doesn't matter to me, although I do see a lot of good looking short setups on the daily charts.

Potential swing trades:

Jerry wrote:

I wanted to know your option on GOOG. For the first time GOOG posted good earnings and the stock goes down... :-?

I'm not sure if this is the first time it dropped post-earnings but I could be wrong... I've been watching GOOG the last several days as it's tried to climb back above its 200-day moving average. It looks ready to break down to me but I've thought that before and it didn't happen. I still think that late March gap is begging to be filled. The chart looks really bad to me in this shorter time frame:

But when we zoom out a bit I see a huge symmetrical triangle. Based on this view I'd wait for Google to break (if & when) the bottom of the triangle before shorting it.

On a related note, can Google withstand the apparent pressure that's on many other internet companies / stocks?

I think the Yahoo Inc. (YHOO) knife catchers have shot their wads. The stock looks ready to roll over and retest 25. It'll probably be healthy for those lows to be retested in order to shake out the weak holders. Besides, I rarely trust V bottoms, especially after such a huge drop.

eBay Inc. (EBAY) looks like death:

and even Rackable Systems (Nasdaq: RACK) blew-up post-earning tonight. Their story is that they sell servers to Google and other big internet companies. Clearly all is not well in this space:

I'm glad Jason, who is short the Dow, requested a Dow chart because I meant to post it in tonight's recap. I happened to catch Art Cashin's spot on CNBC this afternoon and he mentioned some Dow technicals. Apparently folks on the floor of the NYSE are focused on the 90-day moving average. Why the 90-day? Beats me, I can't recall ever hearing of people following that average. But I guess that's why I'm not on CNBC nor on the floor of the exchange. :d

So I've included the 90 DMA on the chart below -- it's the green line. As you see it was the high yesterday and after a short trip above the line today the Dow fell back. But what's more compelling to me are the two doji (reversal candlesticks) which both challenged the downward sloping trendline and closed below. Also note the stochastic sell signal.

This sure sees like a good, low-risk spot to be short the Dow. You've got the trendline, the 90 DMA and the early July highs as resistance just above. Those areas are logical and relatively close spots to place stops.

Except for a quick head fake higher just after the open the S&P 500 and Nasdaq stayed in the range they've defined over the past two days. I was as impressed with what the sellers did today as I was with the bulls' resolve the last two days. But we've got to see if they can break the bottom of these ranges.

The Nasdaq crossed 2075 and fell back for the third day in a row. It made a bearish engulfing pattern today and is very close to short-term overbought. I think the odds favor a breakdown here...

The S&P had another 200-day moving average battle again today. This time the bears won by pushing the index back under that line. On Balance Volume still looks ominous to me and stochastic just gave a sell signal.

The small caps got hit hardest today as the Russell 2000 lost 1.26%. It tagged its 50-day moving average and reversed lower to close under the 10-day moving average. It also looks like it's building a huge descending triangle. That's usually bearish... look out below? We'll see.

I've changed the Russell's short-term trend back to down since it's under the 10-day moving average, even if just barely.

The buyers appear to still be determined to push the market higher. We're set to gap up right to yesterday's highs on the indices. I have no idea if they can push through what's been resistance for the last two days but this should make for an interesting first hour.

Gold is en fuego this morning as it pops above its 50-day moving average. So I'm keeping a close eye on GLD and some gold stocks.

Potential swing trades:

There's not much to say about today's action. The indices just consolidated last week's gains on lighter volume -- which is bullish action. Just about all the indices made NR7 bars today so those bars should (could) be good ones to trade off of, if NR7s are your thing.

The Nasdaq's sitting just under that important 2100 level.

The futures are down a little this morning so I guess we'll find out if Friday's low volume rally was for real. If we head higher during the day I'm expecting a struggle at the early July highs on the S&P 500.

Potential swing trades:

It was a struggle on Wednesday and Thursday bit the bulls finished the week strong on Friday. But while the price action was undeniably impressive volume was lacking. Yes, I know I always complain about the upside volume but I have to call 'em as I see 'em. I'm not alone though, IBD has issues with the volume too ($):

For the week, the Nasdaq advanced 3.7%, its biggest price gain since the first week of the year. The S&P 500 climbed 3.1%. The Dow pocketed a 3.2% gain.

But the market's day-to-day action calls those gains into doubt. The major indexes twice posted large gains in weak volume. Combine those two divergent sessions with Thursday's distribution day, and you get a market that's not showing much conviction.

The market fares best when price and volume move higher in tandem. When stocks grab big price gains in light volume, that's a sign that institutional investors aren't buying shares with any kind of intensity. Without that institutional support, the market may be vulnerable to a pullback.

The big picture remains the same. The market is still in a downtrend.

Still, we must respect the price action, low volume or not. The true test will be whether the S&P 500 and the Dow can close above the trading range they've been in since mid-May. They've yet to make higher-highs relative to the June highs.

The Naz finally got through that 2075 area but there's still plenty of overhead resistance. Breaking the blue trendline will be key for th bulls.

The S&P closed just below the June highs. The bears have to be very nervous right about now...

The Dow looks a lot like the S&P, perched just under resistance.

The Russell had a big day on Friday but is still well within its longer-term downtrend and the descending trianlge I pointed out on Thursday.

I'm doing another flip of the Russell's short-term trend.

The question on Qualcomm is do I think it's bottomed. I see nothing in the chart that leads me to believe QCOM has bottomed. But I guess it all depends on your time frame. In the short term it's promising that the stock was finally able to close above its 10-day moving average. It's down a lot in a short period of time and could easily get a sizeable bounce from here. If it does get that bounce I'd expect the top of the channel and/or the 50-day moving average to be resistance.

If you've read this site for more than a few weeks you know it's almost impossible for me to be bullish on any stock that below both its 50 and 200-day moving averages. I'd be looking to short rallies as long as it's under those moving averages.

I was asked what I thought was a good entry and target price for shorting the Dow Transportation Index. My answer, as if often the case is "it depends". One possible entry is at or near the top of its downtrend channel whch, at the moment, is around $81. If I were to try to catch the top of the channel I'd only short it if it showed some weakness after it's reached the top of the channel. A bearish candle or two would be great.

One thing that I don't like about that strategy is that the index would be back above the June lows and the 200-day moving average. I'd be worried about those levels becoming support. So if I wanted to hang on to this position for a while I'd wait for it to close under the 200-day moving average again and then short it. My stop would go just above $80.

As for targets -- I don't see much support on the way down. There's a bit around 75, some more around 73 and then what looks like pretty solid support just above 68.

The futures point to a higher open today but still well within the ranges of the last few days. I'm hoping that we can break the ranges today. Up or down, it doesn't matter to me, although I do see a lot of good looking short setups on the daily charts.

Potential swing trades:

Jerry wrote:

I wanted to know your option on GOOG. For the first time GOOG posted good earnings and the stock goes down... :-?

I'm not sure if this is the first time it dropped post-earnings but I could be wrong... I've been watching GOOG the last several days as it's tried to climb back above its 200-day moving average. It looks ready to break down to me but I've thought that before and it didn't happen. I still think that late March gap is begging to be filled. The chart looks really bad to me in this shorter time frame:

But when we zoom out a bit I see a huge symmetrical triangle. Based on this view I'd wait for Google to break (if & when) the bottom of the triangle before shorting it.

On a related note, can Google withstand the apparent pressure that's on many other internet companies / stocks?

I think the Yahoo Inc. (YHOO) knife catchers have shot their wads. The stock looks ready to roll over and retest 25. It'll probably be healthy for those lows to be retested in order to shake out the weak holders. Besides, I rarely trust V bottoms, especially after such a huge drop.

eBay Inc. (EBAY) looks like death:

and even Rackable Systems (Nasdaq: RACK) blew-up post-earning tonight. Their story is that they sell servers to Google and other big internet companies. Clearly all is not well in this space:

I'm glad Jason, who is short the Dow, requested a Dow chart because I meant to post it in tonight's recap. I happened to catch Art Cashin's spot on CNBC this afternoon and he mentioned some Dow technicals. Apparently folks on the floor of the NYSE are focused on the 90-day moving average. Why the 90-day? Beats me, I can't recall ever hearing of people following that average. But I guess that's why I'm not on CNBC nor on the floor of the exchange. :d

So I've included the 90 DMA on the chart below -- it's the green line. As you see it was the high yesterday and after a short trip above the line today the Dow fell back. But what's more compelling to me are the two doji (reversal candlesticks) which both challenged the downward sloping trendline and closed below. Also note the stochastic sell signal.

This sure sees like a good, low-risk spot to be short the Dow. You've got the trendline, the 90 DMA and the early July highs as resistance just above. Those areas are logical and relatively close spots to place stops.

Except for a quick head fake higher just after the open the S&P 500 and Nasdaq stayed in the range they've defined over the past two days. I was as impressed with what the sellers did today as I was with the bulls' resolve the last two days. But we've got to see if they can break the bottom of these ranges.

The Nasdaq crossed 2075 and fell back for the third day in a row. It made a bearish engulfing pattern today and is very close to short-term overbought. I think the odds favor a breakdown here...

The S&P had another 200-day moving average battle again today. This time the bears won by pushing the index back under that line. On Balance Volume still looks ominous to me and stochastic just gave a sell signal.

The small caps got hit hardest today as the Russell 2000 lost 1.26%. It tagged its 50-day moving average and reversed lower to close under the 10-day moving average. It also looks like it's building a huge descending triangle. That's usually bearish... look out below? We'll see.

I've changed the Russell's short-term trend back to down since it's under the 10-day moving average, even if just barely.

The buyers appear to still be determined to push the market higher. We're set to gap up right to yesterday's highs on the indices. I have no idea if they can push through what's been resistance for the last two days but this should make for an interesting first hour.

Gold is en fuego this morning as it pops above its 50-day moving average. So I'm keeping a close eye on GLD and some gold stocks.

Potential swing trades:

There's not much to say about today's action. The indices just consolidated last week's gains on lighter volume -- which is bullish action. Just about all the indices made NR7 bars today so those bars should (could) be good ones to trade off of, if NR7s are your thing.

The Nasdaq's sitting just under that important 2100 level.

The futures are down a little this morning so I guess we'll find out if Friday's low volume rally was for real. If we head higher during the day I'm expecting a struggle at the early July highs on the S&P 500.

Potential swing trades:

It was a struggle on Wednesday and Thursday bit the bulls finished the week strong on Friday. But while the price action was undeniably impressive volume was lacking. Yes, I know I always complain about the upside volume but I have to call 'em as I see 'em. I'm not alone though, IBD has issues with the volume too ($):

For the week, the Nasdaq advanced 3.7%, its biggest price gain since the first week of the year. The S&P 500 climbed 3.1%. The Dow pocketed a 3.2% gain.

But the market's day-to-day action calls those gains into doubt. The major indexes twice posted large gains in weak volume. Combine those two divergent sessions with Thursday's distribution day, and you get a market that's not showing much conviction.

The market fares best when price and volume move higher in tandem. When stocks grab big price gains in light volume, that's a sign that institutional investors aren't buying shares with any kind of intensity. Without that institutional support, the market may be vulnerable to a pullback.

The big picture remains the same. The market is still in a downtrend.

Still, we must respect the price action, low volume or not. The true test will be whether the S&P 500 and the Dow can close above the trading range they've been in since mid-May. They've yet to make higher-highs relative to the June highs.

The Naz finally got through that 2075 area but there's still plenty of overhead resistance. Breaking the blue trendline will be key for th bulls.

The S&P closed just below the June highs. The bears have to be very nervous right about now...

The Dow looks a lot like the S&P, perched just under resistance.

The Russell had a big day on Friday but is still well within its longer-term downtrend and the descending trianlge I pointed out on Thursday.

I'm doing another flip of the Russell's short-term trend.

The question on Qualcomm is do I think it's bottomed. I see nothing in the chart that leads me to believe QCOM has bottomed. But I guess it all depends on your time frame. In the short term it's promising that the stock was finally able to close above its 10-day moving average. It's down a lot in a short period of time and could easily get a sizeable bounce from here. If it does get that bounce I'd expect the top of the channel and/or the 50-day moving average to be resistance.

If you've read this site for more than a few weeks you know it's almost impossible for me to be bullish on any stock that below both its 50 and 200-day moving averages. I'd be looking to short rallies as long as it's under those moving averages.

I was asked what I thought was a good entry and target price for shorting the Dow Transportation Index. My answer, as if often the case is "it depends". One possible entry is at or near the top of its downtrend channel whch, at the moment, is around $81. If I were to try to catch the top of the channel I'd only short it if it showed some weakness after it's reached the top of the channel. A bearish candle or two would be great.

One thing that I don't like about that strategy is that the index would be back above the June lows and the 200-day moving average. I'd be worried about those levels becoming support. So if I wanted to hang on to this position for a while I'd wait for it to close under the 200-day moving average again and then short it. My stop would go just above $80.

As for targets -- I don't see much support on the way down. There's a bit around 75, some more around 73 and then what looks like pretty solid support just above 68.

The futures point to a higher open today but still well within the ranges of the last few days. I'm hoping that we can break the ranges today. Up or down, it doesn't matter to me, although I do see a lot of good looking short setups on the daily charts.

Potential swing trades:

Jerry wrote:

I wanted to know your option on GOOG. For the first time GOOG posted good earnings and the stock goes down... :-?

I'm not sure if this is the first time it dropped post-earnings but I could be wrong... I've been watching GOOG the last several days as it's tried to climb back above its 200-day moving average. It looks ready to break down to me but I've thought that before and it didn't happen. I still think that late March gap is begging to be filled. The chart looks really bad to me in this shorter time frame:

But when we zoom out a bit I see a huge symmetrical triangle. Based on this view I'd wait for Google to break (if & when) the bottom of the triangle before shorting it.

On a related note, can Google withstand the apparent pressure that's on many other internet companies / stocks?

I think the Yahoo Inc. (YHOO) knife catchers have shot their wads. The stock looks ready to roll over and retest 25. It'll probably be healthy for those lows to be retested in order to shake out the weak holders. Besides, I rarely trust V bottoms, especially after such a huge drop.

eBay Inc. (EBAY) looks like death:

and even Rackable Systems (Nasdaq: RACK) blew-up post-earning tonight. Their story is that they sell servers to Google and other big internet companies. Clearly all is not well in this space:

I'm glad Jason, who is short the Dow, requested a Dow chart because I meant to post it in tonight's recap. I happened to catch Art Cashin's spot on CNBC this afternoon and he mentioned some Dow technicals. Apparently folks on the floor of the NYSE are focused on the 90-day moving average. Why the 90-day? Beats me, I can't recall ever hearing of people following that average. But I guess that's why I'm not on CNBC nor on the floor of the exchange. :d

So I've included the 90 DMA on the chart below -- it's the green line. As you see it was the high yesterday and after a short trip above the line today the Dow fell back. But what's more compelling to me are the two doji (reversal candlesticks) which both challenged the downward sloping trendline and closed below. Also note the stochastic sell signal.

This sure sees like a good, low-risk spot to be short the Dow. You've got the trendline, the 90 DMA and the early July highs as resistance just above. Those areas are logical and relatively close spots to place stops.

Except for a quick head fake higher just after the open the S&P 500 and Nasdaq stayed in the range they've defined over the past two days. I was as impressed with what the sellers did today as I was with the bulls' resolve the last two days. But we've got to see if they can break the bottom of these ranges.

The Nasdaq crossed 2075 and fell back for the third day in a row. It made a bearish engulfing pattern today and is very close to short-term overbought. I think the odds favor a breakdown here...

The S&P had another 200-day moving average battle again today. This time the bears won by pushing the index back under that line. On Balance Volume still looks ominous to me and stochastic just gave a sell signal.

The small caps got hit hardest today as the Russell 2000 lost 1.26%. It tagged its 50-day moving average and reversed lower to close under the 10-day moving average. It also looks like it's building a huge descending triangle. That's usually bearish... look out below? We'll see.

I've changed the Russell's short-term trend back to down since it's under the 10-day moving average, even if just barely.

The buyers appear to still be determined to push the market higher. We're set to gap up right to yesterday's highs on the indices. I have no idea if they can push through what's been resistance for the last two days but this should make for an interesting first hour.

Gold is en fuego this morning as it pops above its 50-day moving average. So I'm keeping a close eye on GLD and some gold stocks.

Potential swing trades:

There's not much to say about today's action. The indices just consolidated last week's gains on lighter volume -- which is bullish action. Just about all the indices made NR7 bars today so those bars should (could) be good ones to trade off of, if NR7s are your thing.

The Nasdaq's sitting just under that important 2100 level.

The futures are down a little this morning so I guess we'll find out if Friday's low volume rally was for real. If we head higher during the day I'm expecting a struggle at the early July highs on the S&P 500.

Potential swing trades:

It was a struggle on Wednesday and Thursday bit the bulls finished the week strong on Friday. But while the price action was undeniably impressive volume was lacking. Yes, I know I always complain about the upside volume but I have to call 'em as I see 'em. I'm not alone though, IBD has issues with the volume too ($):

For the week, the Nasdaq advanced 3.7%, its biggest price gain since the first week of the year. The S&P 500 climbed 3.1%. The Dow pocketed a 3.2% gain.

But the market's day-to-day action calls those gains into doubt. The major indexes twice posted large gains in weak volume. Combine those two divergent sessions with Thursday's distribution day, and you get a market that's not showing much conviction.

The market fares best when price and volume move higher in tandem. When stocks grab big price gains in light volume, that's a sign that institutional investors aren't buying shares with any kind of intensity. Without that institutional support, the market may be vulnerable to a pullback.

The big picture remains the same. The market is still in a downtrend.

Still, we must respect the price action, low volume or not. The true test will be whether the S&P 500 and the Dow can close above the trading range they've been in since mid-May. They've yet to make higher-highs relative to the June highs.

The Naz finally got through that 2075 area but there's still plenty of overhead resistance. Breaking the blue trendline will be key for th bulls.

The S&P closed just below the June highs. The bears have to be very nervous right about now...

The Dow looks a lot like the S&P, perched just under resistance.

The Russell had a big day on Friday but is still well within its longer-term downtrend and the descending trianlge I pointed out on Thursday.

I'm doing another flip of the Russell's short-term trend.

The question on Qualcomm is do I think it's bottomed. I see nothing in the chart that leads me to believe QCOM has bottomed. But I guess it all depends on your time frame. In the short term it's promising that the stock was finally able to close above its 10-day moving average. It's down a lot in a short period of time and could easily get a sizeable bounce from here. If it does get that bounce I'd expect the top of the channel and/or the 50-day moving average to be resistance.

If you've read this site for more than a few weeks you know it's almost impossible for me to be bullish on any stock that below both its 50 and 200-day moving averages. I'd be looking to short rallies as long as it's under those moving averages.

I was asked what I thought was a good entry and target price for shorting the Dow Transportation Index. My answer, as if often the case is "it depends". One possible entry is at or near the top of its downtrend channel whch, at the moment, is around $81. If I were to try to catch the top of the channel I'd only short it if it showed some weakness after it's reached the top of the channel. A bearish candle or two would be great.

One thing that I don't like about that strategy is that the index would be back above the June lows and the 200-day moving average. I'd be worried about those levels becoming support. So if I wanted to hang on to this position for a while I'd wait for it to close under the 200-day moving average again and then short it. My stop would go just above $80.

As for targets -- I don't see much support on the way down. There's a bit around 75, some more around 73 and then what looks like pretty solid support just above 68.

The futures point to a higher open today but still well within the ranges of the last few days. I'm hoping that we can break the ranges today. Up or down, it doesn't matter to me, although I do see a lot of good looking short setups on the daily charts.

Potential swing trades:

Jerry wrote:

I wanted to know your option on GOOG. For the first time GOOG posted good earnings and the stock goes down... :-?

I'm not sure if this is the first time it dropped post-earnings but I could be wrong... I've been watching GOOG the last several days as it's tried to climb back above its 200-day moving average. It looks ready to break down to me but I've thought that before and it didn't happen. I still think that late March gap is begging to be filled. The chart looks really bad to me in this shorter time frame:

But when we zoom out a bit I see a huge symmetrical triangle. Based on this view I'd wait for Google to break (if & when) the bottom of the triangle before shorting it.

On a related note, can Google withstand the apparent pressure that's on many other internet companies / stocks?

I think the Yahoo Inc. (YHOO) knife catchers have shot their wads. The stock looks ready to roll over and retest 25. It'll probably be healthy for those lows to be retested in order to shake out the weak holders. Besides, I rarely trust V bottoms, especially after such a huge drop.

eBay Inc. (EBAY) looks like death:

and even Rackable Systems (Nasdaq: RACK) blew-up post-earning tonight. Their story is that they sell servers to Google and other big internet companies. Clearly all is not well in this space:

I'm glad Jason, who is short the Dow, requested a Dow chart because I meant to post it in tonight's recap. I happened to catch Art Cashin's spot on CNBC this afternoon and he mentioned some Dow technicals. Apparently folks on the floor of the NYSE are focused on the 90-day moving average. Why the 90-day? Beats me, I can't recall ever hearing of people following that average. But I guess that's why I'm not on CNBC nor on the floor of the exchange. :d

So I've included the 90 DMA on the chart below -- it's the green line. As you see it was the high yesterday and after a short trip above the line today the Dow fell back. But what's more compelling to me are the two doji (reversal candlesticks) which both challenged the downward sloping trendline and closed below. Also note the stochastic sell signal.

This sure sees like a good, low-risk spot to be short the Dow. You've got the trendline, the 90 DMA and the early July highs as resistance just above. Those areas are logical and relatively close spots to place stops.

Except for a quick head fake higher just after the open the S&P 500 and Nasdaq stayed in the range they've defined over the past two days. I was as impressed with what the sellers did today as I was with the bulls' resolve the last two days. But we've got to see if they can break the bottom of these ranges.

The Nasdaq crossed 2075 and fell back for the third day in a row. It made a bearish engulfing pattern today and is very close to short-term overbought. I think the odds favor a breakdown here...

The S&P had another 200-day moving average battle again today. This time the bears won by pushing the index back under that line. On Balance Volume still looks ominous to me and stochastic just gave a sell signal.

The small caps got hit hardest today as the Russell 2000 lost 1.26%. It tagged its 50-day moving average and reversed lower to close under the 10-day moving average. It also looks like it's building a huge descending triangle. That's usually bearish... look out below? We'll see.

I've changed the Russell's short-term trend back to down since it's under the 10-day moving average, even if just barely.

The buyers appear to still be determined to push the market higher. We're set to gap up right to yesterday's highs on the indices. I have no idea if they can push through what's been resistance for the last two days but this should make for an interesting first hour.

Gold is en fuego this morning as it pops above its 50-day moving average. So I'm keeping a close eye on GLD and some gold stocks.

Potential swing trades:

There's not much to say about today's action. The indices just consolidated last week's gains on lighter volume -- which is bullish action. Just about all the indices made NR7 bars today so those bars should (could) be good ones to trade off of, if NR7s are your thing.

The Nasdaq's sitting just under that important 2100 level.

The futures are down a little this morning so I guess we'll find out if Friday's low volume rally was for real. If we head higher during the day I'm expecting a struggle at the early July highs on the S&P 500.

Potential swing trades:

It was a struggle on Wednesday and Thursday bit the bulls finished the week strong on Friday. But while the price action was undeniably impressive volume was lacking. Yes, I know I always complain about the upside volume but I have to call 'em as I see 'em. I'm not alone though, IBD has issues with the volume too ($):

For the week, the Nasdaq advanced 3.7%, its biggest price gain since the first week of the year. The S&P 500 climbed 3.1%. The Dow pocketed a 3.2% gain.

But the market's day-to-day action calls those gains into doubt. The major indexes twice posted large gains in weak volume. Combine those two divergent sessions with Thursday's distribution day, and you get a market that's not showing much conviction.

The market fares best when price and volume move higher in tandem. When stocks grab big price gains in light volume, that's a sign that institutional investors aren't buying shares with any kind of intensity. Without that institutional support, the market may be vulnerable to a pullback.

The big picture remains the same. The market is still in a downtrend.

Still, we must respect the price action, low volume or not. The true test will be whether the S&P 500 and the Dow can close above the trading range they've been in since mid-May. They've yet to make higher-highs relative to the June highs.

The Naz finally got through that 2075 area but there's still plenty of overhead resistance. Breaking the blue trendline will be key for th bulls.

The S&P closed just below the June highs. The bears have to be very nervous right about now...

The Dow looks a lot like the S&P, perched just under resistance.

The Russell had a big day on Friday but is still well within its longer-term downtrend and the descending trianlge I pointed out on Thursday.

I'm doing another flip of the Russell's short-term trend.

The question on Qualcomm is do I think it's bottomed. I see nothing in the chart that leads me to believe QCOM has bottomed. But I guess it all depends on your time frame. In the short term it's promising that the stock was finally able to close above its 10-day moving average. It's down a lot in a short period of time and could easily get a sizeable bounce from here. If it does get that bounce I'd expect the top of the channel and/or the 50-day moving average to be resistance.

If you've read this site for more than a few weeks you know it's almost impossible for me to be bullish on any stock that below both its 50 and 200-day moving averages. I'd be looking to short rallies as long as it's under those moving averages.

I was asked what I thought was a good entry and target price for shorting the Dow Transportation Index. My answer, as if often the case is "it depends". One possible entry is at or near the top of its downtrend channel whch, at the moment, is around $81. If I were to try to catch the top of the channel I'd only short it if it showed some weakness after it's reached the top of the channel. A bearish candle or two would be great.

One thing that I don't like about that strategy is that the index would be back above the June lows and the 200-day moving average. I'd be worried about those levels becoming support. So if I wanted to hang on to this position for a while I'd wait for it to close under the 200-day moving average again and then short it. My stop would go just above $80.

As for targets -- I don't see much support on the way down. There's a bit around 75, some more around 73 and then what looks like pretty solid support just above 68.

The futures point to a higher open today but still well within the ranges of the last few days. I'm hoping that we can break the ranges today. Up or down, it doesn't matter to me, although I do see a lot of good looking short setups on the daily charts.

Potential swing trades:

Jerry wrote:

I wanted to know your option on GOOG. For the first time GOOG posted good earnings and the stock goes down... :-?

I'm not sure if this is the first time it dropped post-earnings but I could be wrong... I've been watching GOOG the last several days as it's tried to climb back above its 200-day moving average. It looks ready to break down to me but I've thought that before and it didn't happen. I still think that late March gap is begging to be filled. The chart looks really bad to me in this shorter time frame:

But when we zoom out a bit I see a huge symmetrical triangle. Based on this view I'd wait for Google to break (if & when) the bottom of the triangle before shorting it.

On a related note, can Google withstand the apparent pressure that's on many other internet companies / stocks?

I think the Yahoo Inc. (YHOO) knife catchers have shot their wads. The stock looks ready to roll over and retest 25. It'll probably be healthy for those lows to be retested in order to shake out the weak holders. Besides, I rarely trust V bottoms, especially after such a huge drop.

eBay Inc. (EBAY) looks like death:

and even Rackable Systems (Nasdaq: RACK) blew-up post-earning tonight. Their story is that they sell servers to Google and other big internet companies. Clearly all is not well in this space:

I'm glad Jason, who is short the Dow, requested a Dow chart because I meant to post it in tonight's recap. I happened to catch Art Cashin's spot on CNBC this afternoon and he mentioned some Dow technicals. Apparently folks on the floor of the NYSE are focused on the 90-day moving average. Why the 90-day? Beats me, I can't recall ever hearing of people following that average. But I guess that's why I'm not on CNBC nor on the floor of the exchange. :d

So I've included the 90 DMA on the chart below -- it's the green line. As you see it was the high yesterday and after a short trip above the line today the Dow fell back. But what's more compelling to me are the two doji (reversal candlesticks) which both challenged the downward sloping trendline and closed below. Also note the stochastic sell signal.

This sure sees like a good, low-risk spot to be short the Dow. You've got the trendline, the 90 DMA and the early July highs as resistance just above. Those areas are logical and relatively close spots to place stops.

Except for a quick head fake higher just after the open the S&P 500 and Nasdaq stayed in the range they've defined over the past two days. I was as impressed with what the sellers did today as I was with the bulls' resolve the last two days. But we've got to see if they can break the bottom of these ranges.

The Nasdaq crossed 2075 and fell back for the third day in a row. It made a bearish engulfing pattern today and is very close to short-term overbought. I think the odds favor a breakdown here...

The S&P had another 200-day moving average battle again today. This time the bears won by pushing the index back under that line. On Balance Volume still looks ominous to me and stochastic just gave a sell signal.

The small caps got hit hardest today as the Russell 2000 lost 1.26%. It tagged its 50-day moving average and reversed lower to close under the 10-day moving average. It also looks like it's building a huge descending triangle. That's usually bearish... look out below? We'll see.

I've changed the Russell's short-term trend back to down since it's under the 10-day moving average, even if just barely.

The buyers appear to still be determined to push the market higher. We're set to gap up right to yesterday's highs on the indices. I have no idea if they can push through what's been resistance for the last two days but this should make for an interesting first hour.

Gold is en fuego this morning as it pops above its 50-day moving average. So I'm keeping a close eye on GLD and some gold stocks.

Potential swing trades:

There's not much to say about today's action. The indices just consolidated last week's gains on lighter volume -- which is bullish action. Just about all the indices made NR7 bars today so those bars should (could) be good ones to trade off of, if NR7s are your thing.

The Nasdaq's sitting just under that important 2100 level.

The futures are down a little this morning so I guess we'll find out if Friday's low volume rally was for real. If we head higher during the day I'm expecting a struggle at the early July highs on the S&P 500.

Potential swing trades:

It was a struggle on Wednesday and Thursday bit the bulls finished the week strong on Friday. But while the price action was undeniably impressive volume was lacking. Yes, I know I always complain about the upside volume but I have to call 'em as I see 'em. I'm not alone though, IBD has issues with the volume too ($):

For the week, the Nasdaq advanced 3.7%, its biggest price gain since the first week of the year. The S&P 500 climbed 3.1%. The Dow pocketed a 3.2% gain.

But the market's day-to-day action calls those gains into doubt. The major indexes twice posted large gains in weak volume. Combine those two divergent sessions with Thursday's distribution day, and you get a market that's not showing much conviction.

The market fares best when price and volume move higher in tandem. When stocks grab big price gains in light volume, that's a sign that institutional investors aren't buying shares with any kind of intensity. Without that institutional support, the market may be vulnerable to a pullback.

The big picture remains the same. The market is still in a downtrend.

Still, we must respect the price action, low volume or not. The true test will be whether the S&P 500 and the Dow can close above the trading range they've been in since mid-May. They've yet to make higher-highs relative to the June highs.

The Naz finally got through that 2075 area but there's still plenty of overhead resistance. Breaking the blue trendline will be key for th bulls.

The S&P closed just below the June highs. The bears have to be very nervous right about now...

The Dow looks a lot like the S&P, perched just under resistance.

The Russell had a big day on Friday but is still well within its longer-term downtrend and the descending trianlge I pointed out on Thursday.

I'm doing another flip of the Russell's short-term trend.

The question on Qualcomm is do I think it's bottomed. I see nothing in the chart that leads me to believe QCOM has bottomed. But I guess it all depends on your time frame. In the short term it's promising that the stock was finally able to close above its 10-day moving average. It's down a lot in a short period of time and could easily get a sizeable bounce from here. If it does get that bounce I'd expect the top of the channel and/or the 50-day moving average to be resistance.

If you've read this site for more than a few weeks you know it's almost impossible for me to be bullish on any stock that below both its 50 and 200-day moving averages. I'd be looking to short rallies as long as it's under those moving averages.

I was asked what I thought was a good entry and target price for shorting the Dow Transportation Index. My answer, as if often the case is "it depends". One possible entry is at or near the top of its downtrend channel whch, at the moment, is around $81. If I were to try to catch the top of the channel I'd only short it if it showed some weakness after it's reached the top of the channel. A bearish candle or two would be great.

One thing that I don't like about that strategy is that the index would be back above the June lows and the 200-day moving average. I'd be worried about those levels becoming support. So if I wanted to hang on to this position for a while I'd wait for it to close under the 200-day moving average again and then short it. My stop would go just above $80.

As for targets -- I don't see much support on the way down. There's a bit around 75, some more around 73 and then what looks like pretty solid support just above 68.

The futures point to a higher open today but still well within the ranges of the last few days. I'm hoping that we can break the ranges today. Up or down, it doesn't matter to me, although I do see a lot of good looking short setups on the daily charts.

Potential swing trades:

Jerry wrote:

I wanted to know your option on GOOG. For the first time GOOG posted good earnings and the stock goes down... :-?

I'm not sure if this is the first time it dropped post-earnings but I could be wrong... I've been watching GOOG the last several days as it's tried to climb back above its 200-day moving average. It looks ready to break down to me but I've thought that before and it didn't happen. I still think that late March gap is begging to be filled. The chart looks really bad to me in this shorter time frame:

But when we zoom out a bit I see a huge symmetrical triangle. Based on this view I'd wait for Google to break (if & when) the bottom of the triangle before shorting it.

On a related note, can Google withstand the apparent pressure that's on many other internet companies / stocks?

I think the Yahoo Inc. (YHOO) knife catchers have shot their wads. The stock looks ready to roll over and retest 25. It'll probably be healthy for those lows to be retested in order to shake out the weak holders. Besides, I rarely trust V bottoms, especially after such a huge drop.

eBay Inc. (EBAY) looks like death:

and even Rackable Systems (Nasdaq: RACK) blew-up post-earning tonight. Their story is that they sell servers to Google and other big internet companies. Clearly all is not well in this space:

I'm glad Jason, who is short the Dow, requested a Dow chart because I meant to post it in tonight's recap. I happened to catch Art Cashin's spot on CNBC this afternoon and he mentioned some Dow technicals. Apparently folks on the floor of the NYSE are focused on the 90-day moving average. Why the 90-day? Beats me, I can't recall ever hearing of people following that average. But I guess that's why I'm not on CNBC nor on the floor of the exchange. :d

So I've included the 90 DMA on the chart below -- it's the green line. As you see it was the high yesterday and after a short trip above the line today the Dow fell back. But what's more compelling to me are the two doji (reversal candlesticks) which both challenged the downward sloping trendline and closed below. Also note the stochastic sell signal.

This sure sees like a good, low-risk spot to be short the Dow. You've got the trendline, the 90 DMA and the early July highs as resistance just above. Those areas are logical and relatively close spots to place stops.

Except for a quick head fake higher just after the open the S&P 500 and Nasdaq stayed in the range they've defined over the past two days. I was as impressed with what the sellers did today as I was with the bulls' resolve the last two days. But we've got to see if they can break the bottom of these ranges.

The Nasdaq crossed 2075 and fell back for the third day in a row. It made a bearish engulfing pattern today and is very close to short-term overbought. I think the odds favor a breakdown here...

The S&P had another 200-day moving average battle again today. This time the bears won by pushing the index back under that line. On Balance Volume still looks ominous to me and stochastic just gave a sell signal.

The small caps got hit hardest today as the Russell 2000 lost 1.26%. It tagged its 50-day moving average and reversed lower to close under the 10-day moving average. It also looks like it's building a huge descending triangle. That's usually bearish... look out below? We'll see.

I've changed the Russell's short-term trend back to down since it's under the 10-day moving average, even if just barely.

The buyers appear to still be determined to push the market higher. We're set to gap up right to yesterday's highs on the indices. I have no idea if they can push through what's been resistance for the last two days but this should make for an interesting first hour.

Gold is en fuego this morning as it pops above its 50-day moving average. So I'm keeping a close eye on GLD and some gold stocks.

Potential swing trades:

There's not much to say about today's action. The indices just consolidated last week's gains on lighter volume -- which is bullish action. Just about all the indices made NR7 bars today so those bars should (could) be good ones to trade off of, if NR7s are your thing.

The Nasdaq's sitting just under that important 2100 level.

The futures are down a little this morning so I guess we'll find out if Friday's low volume rally was for real. If we head higher during the day I'm expecting a struggle at the early July highs on the S&P 500.

Potential swing trades:

It was a struggle on Wednesday and Thursday bit the bulls finished the week strong on Friday. But while the price action was undeniably impressive volume was lacking. Yes, I know I always complain about the upside volume but I have to call 'em as I see 'em. I'm not alone though, IBD has issues with the volume too ($):

For the week, the Nasdaq advanced 3.7%, its biggest price gain since the first week of the year. The S&P 500 climbed 3.1%. The Dow pocketed a 3.2% gain.

But the market's day-to-day action calls those gains into doubt. The major indexes twice posted large gains in weak volume. Combine those two divergent sessions with Thursday's distribution day, and you get a market that's not showing much conviction.

The market fares best when price and volume move higher in tandem. When stocks grab big price gains in light volume, that's a sign that institutional investors aren't buying shares with any kind of intensity. Without that institutional support, the market may be vulnerable to a pullback.

The big picture remains the same. The market is still in a downtrend.

Still, we must respect the price action, low volume or not. The true test will be whether the S&P 500 and the Dow can close above the trading range they've been in since mid-May. They've yet to make higher-highs relative to the June highs.

The Naz finally got through that 2075 area but there's still plenty of overhead resistance. Breaking the blue trendline will be key for th bulls.

The S&P closed just below the June highs. The bears have to be very nervous right about now...

The Dow looks a lot like the S&P, perched just under resistance.

The Russell had a big day on Friday but is still well within its longer-term downtrend and the descending trianlge I pointed out on Thursday.

I'm doing another flip of the Russell's short-term trend.

The question on Qualcomm is do I think it's bottomed. I see nothing in the chart that leads me to believe QCOM has bottomed. But I guess it all depends on your time frame. In the short term it's promising that the stock was finally able to close above its 10-day moving average. It's down a lot in a short period of time and could easily get a sizeable bounce from here. If it does get that bounce I'd expect the top of the channel and/or the 50-day moving average to be resistance.

If you've read this site for more than a few weeks you know it's almost impossible for me to be bullish on any stock that below both its 50 and 200-day moving averages. I'd be looking to short rallies as long as it's under those moving averages.

I was asked what I thought was a good entry and target price for shorting the Dow Transportation Index. My answer, as if often the case is "it depends". One possible entry is at or near the top of its downtrend channel whch, at the moment, is around $81. If I were to try to catch the top of the channel I'd only short it if it showed some weakness after it's reached the top of the channel. A bearish candle or two would be great.

One thing that I don't like about that strategy is that the index would be back above the June lows and the 200-day moving average. I'd be worried about those levels becoming support. So if I wanted to hang on to this position for a while I'd wait for it to close under the 200-day moving average again and then short it. My stop would go just above $80.

As for targets -- I don't see much support on the way down. There's a bit around 75, some more around 73 and then what looks like pretty solid support just above 68.

The futures point to a higher open today but still well within the ranges of the last few days. I'm hoping that we can break the ranges today. Up or down, it doesn't matter to me, although I do see a lot of good looking short setups on the daily charts.

Potential swing trades:

Jerry wrote:

I wanted to know your option on GOOG. For the first time GOOG posted good earnings and the stock goes down... :-?

I'm not sure if this is the first time it dropped post-earnings but I could be wrong... I've been watching GOOG the last several days as it's tried to climb back above its 200-day moving average. It looks ready to break down to me but I've thought that before and it didn't happen. I still think that late March gap is begging to be filled. The chart looks really bad to me in this shorter time frame:

But when we zoom out a bit I see a huge symmetrical triangle. Based on this view I'd wait for Google to break (if & when) the bottom of the triangle before shorting it.

On a related note, can Google withstand the apparent pressure that's on many other internet companies / stocks?

I think the Yahoo Inc. (YHOO) knife catchers have shot their wads. The stock looks ready to roll over and retest 25. It'll probably be healthy for those lows to be retested in order to shake out the weak holders. Besides, I rarely trust V bottoms, especially after such a huge drop.

eBay Inc. (EBAY) looks like death:

and even Rackable Systems (Nasdaq: RACK) blew-up post-earning tonight. Their story is that they sell servers to Google and other big internet companies. Clearly all is not well in this space:

I'm glad Jason, who is short the Dow, requested a Dow chart because I meant to post it in tonight's recap. I happened to catch Art Cashin's spot on CNBC this afternoon and he mentioned some Dow technicals. Apparently folks on the floor of the NYSE are focused on the 90-day moving average. Why the 90-day? Beats me, I can't recall ever hearing of people following that average. But I guess that's why I'm not on CNBC nor on the floor of the exchange. :d

So I've included the 90 DMA on the chart below -- it's the green line. As you see it was the high yesterday and after a short trip above the line today the Dow fell back. But what's more compelling to me are the two doji (reversal candlesticks) which both challenged the downward sloping trendline and closed below. Also note the stochastic sell signal.

This sure sees like a good, low-risk spot to be short the Dow. You've got the trendline, the 90 DMA and the early July highs as resistance just above. Those areas are logical and relatively close spots to place stops.

Except for a quick head fake higher just after the open the S&P 500 and Nasdaq stayed in the range they've defined over the past two days. I was as impressed with what the sellers did today as I was with the bulls' resolve the last two days. But we've got to see if they can break the bottom of these ranges.

The Nasdaq crossed 2075 and fell back for the third day in a row. It made a bearish engulfing pattern today and is very close to short-term overbought. I think the odds favor a breakdown here...

The S&P had another 200-day moving average battle again today. This time the bears won by pushing the index back under that line. On Balance Volume still looks ominous to me and stochastic just gave a sell signal.

The small caps got hit hardest today as the Russell 2000 lost 1.26%. It tagged its 50-day moving average and reversed lower to close under the 10-day moving average. It also looks like it's building a huge descending triangle. That's usually bearish... look out below? We'll see.

I've changed the Russell's short-term trend back to down since it's under the 10-day moving average, even if just barely.

The buyers appear to still be determined to push the market higher. We're set to gap up right to yesterday's highs on the indices. I have no idea if they can push through what's been resistance for the last two days but this should make for an interesting first hour.

Gold is en fuego this morning as it pops above its 50-day moving average. So I'm keeping a close eye on GLD and some gold stocks.

Potential swing trades:

There's not much to say about today's action. The indices just consolidated last week's gains on lighter volume -- which is bullish action. Just about all the indices made NR7 bars today so those bars should (could) be good ones to trade off of, if NR7s are your thing.

The Nasdaq's sitting just under that important 2100 level.

The futures are down a little this morning so I guess we'll find out if Friday's low volume rally was for real. If we head higher during the day I'm expecting a struggle at the early July highs on the S&P 500.

Potential swing trades:

It was a struggle on Wednesday and Thursday bit the bulls finished the week strong on Friday. But while the price action was undeniably impressive volume was lacking. Yes, I know I always complain about the upside volume but I have to call 'em as I see 'em. I'm not alone though, IBD has issues with the volume too ($):

For the week, the Nasdaq advanced 3.7%, its biggest price gain since the first week of the year. The S&P 500 climbed 3.1%. The Dow pocketed a 3.2% gain.

But the market's day-to-day action calls those gains into doubt. The major indexes twice posted large gains in weak volume. Combine those two divergent sessions with Thursday's distribution day, and you get a market that's not showing much conviction.

The market fares best when price and volume move higher in tandem. When stocks grab big price gains in light volume, that's a sign that institutional investors aren't buying shares with any kind of intensity. Without that institutional support, the market may be vulnerable to a pullback.

The big picture remains the same. The market is still in a downtrend.

Still, we must respect the price action, low volume or not. The true test will be whether the S&P 500 and the Dow can close above the trading range they've been in since mid-May. They've yet to make higher-highs relative to the June highs.

The Naz finally got through that 2075 area but there's still plenty of overhead resistance. Breaking the blue trendline will be key for th bulls.

The S&P closed just below the June highs. The bears have to be very nervous right about now...

The Dow looks a lot like the S&P, perched just under resistance.

The Russell had a big day on Friday but is still well within its longer-term downtrend and the descending trianlge I pointed out on Thursday.

I'm doing another flip of the Russell's short-term trend.

The question on Qualcomm is do I think it's bottomed. I see nothing in the chart that leads me to believe QCOM has bottomed. But I guess it all depends on your time frame. In the short term it's promising that the stock was finally able to close above its 10-day moving average. It's down a lot in a short period of time and could easily get a sizeable bounce from here. If it does get that bounce I'd expect the top of the channel and/or the 50-day moving average to be resistance.

If you've read this site for more than a few weeks you know it's almost impossible for me to be bullish on any stock that below both its 50 and 200-day moving averages. I'd be looking to short rallies as long as it's under those moving averages.

I was asked what I thought was a good entry and target price for shorting the Dow Transportation Index. My answer, as if often the case is "it depends". One possible entry is at or near the top of its downtrend channel whch, at the moment, is around $81. If I were to try to catch the top of the channel I'd only short it if it showed some weakness after it's reached the top of the channel. A bearish candle or two would be great.

One thing that I don't like about that strategy is that the index would be back above the June lows and the 200-day moving average. I'd be worried about those levels becoming support. So if I wanted to hang on to this position for a while I'd wait for it to close under the 200-day moving average again and then short it. My stop would go just above $80.

As for targets -- I don't see much support on the way down. There's a bit around 75, some more around 73 and then what looks like pretty solid support just above 68.

The futures point to a higher open today but still well within the ranges of the last few days. I'm hoping that we can break the ranges today. Up or down, it doesn't matter to me, although I do see a lot of good looking short setups on the daily charts.

Potential swing trades:

Jerry wrote:

I wanted to know your option on GOOG. For the first time GOOG posted good earnings and the stock goes down... :-?

I'm not sure if this is the first time it dropped post-earnings but I could be wrong... I've been watching GOOG the last several days as it's tried to climb back above its 200-day moving average. It looks ready to break down to me but I've thought that before and it didn't happen. I still think that late March gap is begging to be filled. The chart looks really bad to me in this shorter time frame:

But when we zoom out a bit I see a huge symmetrical triangle. Based on this view I'd wait for Google to break (if & when) the bottom of the triangle before shorting it.

On a related note, can Google withstand the apparent pressure that's on many other internet companies / stocks?

I think the Yahoo Inc. (YHOO) knife catchers have shot their wads. The stock looks ready to roll over and retest 25. It'll probably be healthy for those lows to be retested in order to shake out the weak holders. Besides, I rarely trust V bottoms, especially after such a huge drop.

eBay Inc. (EBAY) looks like death:

and even Rackable Systems (Nasdaq: RACK) blew-up post-earning tonight. Their story is that they sell servers to Google and other big internet companies. Clearly all is not well in this space:

I'm glad Jason, who is short the Dow, requested a Dow chart because I meant to post it in tonight's recap. I happened to catch Art Cashin's spot on CNBC this afternoon and he mentioned some Dow technicals. Apparently folks on the floor of the NYSE are focused on the 90-day moving average. Why the 90-day? Beats me, I can't recall ever hearing of people following that average. But I guess that's why I'm not on CNBC nor on the floor of the exchange. :d

So I've included the 90 DMA on the chart below -- it's the green line. As you see it was the high yesterday and after a short trip above the line today the Dow fell back. But what's more compelling to me are the two doji (reversal candlesticks) which both challenged the downward sloping trendline and closed below. Also note the stochastic sell signal.

This sure sees like a good, low-risk spot to be short the Dow. You've got the trendline, the 90 DMA and the early July highs as resistance just above. Those areas are logical and relatively close spots to place stops.

Except for a quick head fake higher just after the open the S&P 500 and Nasdaq stayed in the range they've defined over the past two days. I was as impressed with what the sellers did today as I was with the bulls' resolve the last two days. But we've got to see if they can break the bottom of these ranges.

The Nasdaq crossed 2075 and fell back for the third day in a row. It made a bearish engulfing pattern today and is very close to short-term overbought. I think the odds favor a breakdown here...

The S&P had another 200-day moving average battle again today. This time the bears won by pushing the index back under that line. On Balance Volume still looks ominous to me and stochastic just gave a sell signal.

The small caps got hit hardest today as the Russell 2000 lost 1.26%. It tagged its 50-day moving average and reversed lower to close under the 10-day moving average. It also looks like it's building a huge descending triangle. That's usually bearish... look out below? We'll see.

I've changed the Russell's short-term trend back to down since it's under the 10-day moving average, even if just barely.

The buyers appear to still be determined to push the market higher. We're set to gap up right to yesterday's highs on the indices. I have no idea if they can push through what's been resistance for the last two days but this should make for an interesting first hour.

Gold is en fuego this morning as it pops above its 50-day moving average. So I'm keeping a close eye on GLD and some gold stocks.

Potential swing trades:

There's not much to say about today's action. The indices just consolidated last week's gains on lighter volume -- which is bullish action. Just about all the indices made NR7 bars today so those bars should (could) be good ones to trade off of, if NR7s are your thing.

The Nasdaq's sitting just under that important 2100 level.

The futures are down a little this morning so I guess we'll find out if Friday's low volume rally was for real. If we head higher during the day I'm expecting a struggle at the early July highs on the S&P 500.

Potential swing trades:

It was a struggle on Wednesday and Thursday bit the bulls finished the week strong on Friday. But while the price action was undeniably impressive volume was lacking. Yes, I know I always complain about the upside volume but I have to call 'em as I see 'em. I'm not alone though, IBD has issues with the volume too ($):

For the week, the Nasdaq advanced 3.7%, its biggest price gain since the first week of the year. The S&P 500 climbed 3.1%. The Dow pocketed a 3.2% gain.

But the market's day-to-day action calls those gains into doubt. The major indexes twice posted large gains in weak volume. Combine those two divergent sessions with Thursday's distribution day, and you get a market that's not showing much conviction.

The market fares best when price and volume move higher in tandem. When stocks grab big price gains in light volume, that's a sign that institutional investors aren't buying shares with any kind of intensity. Without that institutional support, the market may be vulnerable to a pullback.

The big picture remains the same. The market is still in a downtrend.

Still, we must respect the price action, low volume or not. The true test will be whether the S&P 500 and the Dow can close above the trading range they've been in since mid-May. They've yet to make higher-highs relative to the June highs.

The Naz finally got through that 2075 area but there's still plenty of overhead resistance. Breaking the blue trendline will be key for th bulls.

The S&P closed just below the June highs. The bears have to be very nervous right about now...

The Dow looks a lot like the S&P, perched just under resistance.

The Russell had a big day on Friday but is still well within its longer-term downtrend and the descending trianlge I pointed out on Thursday.

I'm doing another flip of the Russell's short-term trend.

The question on Qualcomm is do I think it's bottomed. I see nothing in the chart that leads me to believe QCOM has bottomed. But I guess it all depends on your time frame. In the short term it's promising that the stock was finally able to close above its 10-day moving average. It's down a lot in a short period of time and could easily get a sizeable bounce from here. If it does get that bounce I'd expect the top of the channel and/or the 50-day moving average to be resistance.

If you've read this site for more than a few weeks you know it's almost impossible for me to be bullish on any stock that below both its 50 and 200-day moving averages. I'd be looking to short rallies as long as it's under those moving averages.

I was asked what I thought was a good entry and target price for shorting the Dow Transportation Index. My answer, as if often the case is "it depends". One possible entry is at or near the top of its downtrend channel whch, at the moment, is around $81. If I were to try to catch the top of the channel I'd only short it if it showed some weakness after it's reached the top of the channel. A bearish candle or two would be great.

One thing that I don't like about that strategy is that the index would be back above the June lows and the 200-day moving average. I'd be worried about those levels becoming support. So if I wanted to hang on to this position for a while I'd wait for it to close under the 200-day moving average again and then short it. My stop would go just above $80.

As for targets -- I don't see much support on the way down. There's a bit around 75, some more around 73 and then what looks like pretty solid support just above 68.

The futures point to a higher open today but still well within the ranges of the last few days. I'm hoping that we can break the ranges today. Up or down, it doesn't matter to me, although I do see a lot of good looking short setups on the daily charts.

Potential swing trades:

Jerry wrote:

I wanted to know your option on GOOG. For the first time GOOG posted good earnings and the stock goes down... :-?

I'm not sure if this is the first time it dropped post-earnings but I could be wrong... I've been watching GOOG the last several days as it's tried to climb back above its 200-day moving average. It looks ready to break down to me but I've thought that before and it didn't happen. I still think that late March gap is begging to be filled. The chart looks really bad to me in this shorter time frame:

But when we zoom out a bit I see a huge symmetrical triangle. Based on this view I'd wait for Google to break (if & when) the bottom of the triangle before shorting it.

On a related note, can Google withstand the apparent pressure that's on many other internet companies / stocks?

I think the Yahoo Inc. (YHOO) knife catchers have shot their wads. The stock looks ready to roll over and retest 25. It'll probably be healthy for those lows to be retested in order to shake out the weak holders. Besides, I rarely trust V bottoms, especially after such a huge drop.

eBay Inc. (EBAY) looks like death:

and even Rackable Systems (Nasdaq: RACK) blew-up post-earning tonight. Their story is that they sell servers to Google and other big internet companies. Clearly all is not well in this space:

I'm glad Jason, who is short the Dow, requested a Dow chart because I meant to post it in tonight's recap. I happened to catch Art Cashin's spot on CNBC this afternoon and he mentioned some Dow technicals. Apparently folks on the floor of the NYSE are focused on the 90-day moving average. Why the 90-day? Beats me, I can't recall ever hearing of people following that average. But I guess that's why I'm not on CNBC nor on the floor of the exchange. :d

So I've included the 90 DMA on the chart below -- it's the green line. As you see it was the high yesterday and after a short trip above the line today the Dow fell back. But what's more compelling to me are the two doji (reversal candlesticks) which both challenged the downward sloping trendline and closed below. Also note the stochastic sell signal.

This sure sees like a good, low-risk spot to be short the Dow. You've got the trendline, the 90 DMA and the early July highs as resistance just above. Those areas are logical and relatively close spots to place stops.

Except for a quick head fake higher just after the open the S&P 500 and Nasdaq stayed in the range they've defined over the past two days. I was as impressed with what the sellers did today as I was with the bulls' resolve the last two days. But we've got to see if they can break the bottom of these ranges.

The Nasdaq crossed 2075 and fell back for the third day in a row. It made a bearish engulfing pattern today and is very close to short-term overbought. I think the odds favor a breakdown here...

The S&P had another 200-day moving average battle again today. This time the bears won by pushing the index back under that line. On Balance Volume still looks ominous to me and stochastic just gave a sell signal.

The small caps got hit hardest today as the Russell 2000 lost 1.26%. It tagged its 50-day moving average and reversed lower to close under the 10-day moving average. It also looks like it's building a huge descending triangle. That's usually bearish... look out below? We'll see.

I've changed the Russell's short-term trend back to down since it's under the 10-day moving average, even if just barely.

The buyers appear to still be determined to push the market higher. We're set to gap up right to yesterday's highs on the indices. I have no idea if they can push through what's been resistance for the last two days but this should make for an interesting first hour.

Gold is en fuego this morning as it pops above its 50-day moving average. So I'm keeping a close eye on GLD and some gold stocks.

Potential swing trades:

There's not much to say about today's action. The indices just consolidated last week's gains on lighter volume -- which is bullish action. Just about all the indices made NR7 bars today so those bars should (could) be good ones to trade off of, if NR7s are your thing.

The Nasdaq's sitting just under that important 2100 level.

The futures are down a little this morning so I guess we'll find out if Friday's low volume rally was for real. If we head higher during the day I'm expecting a struggle at the early July highs on the S&P 500.

Potential swing trades:

It was a struggle on Wednesday and Thursday bit the bulls finished the week strong on Friday. But while the price action was undeniably impressive volume was lacking. Yes, I know I always complain about the upside volume but I have to call 'em as I see 'em. I'm not alone though, IBD has issues with the volume too ($):

For the week, the Nasdaq advanced 3.7%, its biggest price gain since the first week of the year. The S&P 500 climbed 3.1%. The Dow pocketed a 3.2% gain.

But the market's day-to-day action calls those gains into doubt. The major indexes twice posted large gains in weak volume. Combine those two divergent sessions with Thursday's distribution day, and you get a market that's not showing much conviction.

The market fares best when price and volume move higher in tandem. When stocks grab big price gains in light volume, that's a sign that institutional investors aren't buying shares with any kind of intensity. Without that institutional support, the market may be vulnerable to a pullback.

The big picture remains the same. The market is still in a downtrend.

Still, we must respect the price action, low volume or not. The true test will be whether the S&P 500 and the Dow can close above the trading range they've been in since mid-May. They've yet to make higher-highs relative to the June highs.

The Naz finally got through that 2075 area but there's still plenty of overhead resistance. Breaking the blue trendline will be key for th bulls.

The S&P closed just below the June highs. The bears have to be very nervous right about now...

The Dow looks a lot like the S&P, perched just under resistance.

The Russell had a big day on Friday but is still well within its longer-term downtrend and the descending trianlge I pointed out on Thursday.

I'm doing another flip of the Russell's short-term trend.

The question on Qualcomm is do I think it's bottomed. I see nothing in the chart that leads me to believe QCOM has bottomed. But I guess it all depends on your time frame. In the short term it's promising that the stock was finally able to close above its 10-day moving average. It's down a lot in a short period of time and could easily get a sizeable bounce from here. If it does get that bounce I'd expect the top of the channel and/or the 50-day moving average to be resistance.

If you've read this site for more than a few weeks you know it's almost impossible for me to be bullish on any stock that below both its 50 and 200-day moving averages. I'd be looking to short rallies as long as it's under those moving averages.

I was asked what I thought was a good entry and target price for shorting the Dow Transportation Index. My answer, as if often the case is "it depends". One possible entry is at or near the top of its downtrend channel whch, at the moment, is around $81. If I were to try to catch the top of the channel I'd only short it if it showed some weakness after it's reached the top of the channel. A bearish candle or two would be great.

One thing that I don't like about that strategy is that the index would be back above the June lows and the 200-day moving average. I'd be worried about those levels becoming support. So if I wanted to hang on to this position for a while I'd wait for it to close under the 200-day moving average again and then short it. My stop would go just above $80.

As for targets -- I don't see much support on the way down. There's a bit around 75, some more around 73 and then what looks like pretty solid support just above 68.

The futures point to a higher open today but still well within the ranges of the last few days. I'm hoping that we can break the ranges today. Up or down, it doesn't matter to me, although I do see a lot of good looking short setups on the daily charts.

Potential swing trades:

Jerry wrote:

I wanted to know your option on GOOG. For the first time GOOG posted good earnings and the stock goes down... :-?

I'm not sure if this is the first time it dropped post-earnings but I could be wrong... I've been watching GOOG the last several days as it's tried to climb back above its 200-day moving average. It looks ready to break down to me but I've thought that before and it didn't happen. I still think that late March gap is begging to be filled. The chart looks really bad to me in this shorter time frame:

But when we zoom out a bit I see a huge symmetrical triangle. Based on this view I'd wait for Google to break (if & when) the bottom of the triangle before shorting it.

On a related note, can Google withstand the apparent pressure that's on many other internet companies / stocks?

I think the Yahoo Inc. (YHOO) knife catchers have shot their wads. The stock looks ready to roll over and retest 25. It'll probably be healthy for those lows to be retested in order to shake out the weak holders. Besides, I rarely trust V bottoms, especially after such a huge drop.

eBay Inc. (EBAY) looks like death:

and even Rackable Systems (Nasdaq: RACK) blew-up post-earning tonight. Their story is that they sell servers to Google and other big internet companies. Clearly all is not well in this space:

I'm glad Jason, who is short the Dow, requested a Dow chart because I meant to post it in tonight's recap. I happened to catch Art Cashin's spot on CNBC this afternoon and he mentioned some Dow technicals. Apparently folks on the floor of the NYSE are focused on the 90-day moving average. Why the 90-day? Beats me, I can't recall ever hearing of people following that average. But I guess that's why I'm not on CNBC nor on the floor of the exchange. :d

So I've included the 90 DMA on the chart below -- it's the green line. As you see it was the high yesterday and after a short trip above the line today the Dow fell back. But what's more compelling to me are the two doji (reversal candlesticks) which both challenged the downward sloping trendline and closed below. Also note the stochastic sell signal.

This sure sees like a good, low-risk spot to be short the Dow. You've got the trendline, the 90 DMA and the early July highs as resistance just above. Those areas are logical and relatively close spots to place stops.

Except for a quick head fake higher just after the open the S&P 500 and Nasdaq stayed in the range they've defined over the past two days. I was as impressed with what the sellers did today as I was with the bulls' resolve the last two days. But we've got to see if they can break the bottom of these ranges.

The Nasdaq crossed 2075 and fell back for the third day in a row. It made a bearish engulfing pattern today and is very close to short-term overbought. I think the odds favor a breakdown here...

The S&P had another 200-day moving average battle again today. This time the bears won by pushing the index back under that line. On Balance Volume still looks ominous to me and stochastic just gave a sell signal.

The small caps got hit hardest today as the Russell 2000 lost 1.26%. It tagged its 50-day moving average and reversed lower to close under the 10-day moving average. It also looks like it's building a huge descending triangle. That's usually bearish... look out below? We'll see.

I've changed the Russell's short-term trend back to down since it's under the 10-day moving average, even if just barely.

The buyers appear to still be determined to push the market higher. We're set to gap up right to yesterday's highs on the indices. I have no idea if they can push through what's been resistance for the last two days but this should make for an interesting first hour.

Gold is en fuego this morning as it pops above its 50-day moving average. So I'm keeping a close eye on GLD and some gold stocks.

Potential swing trades:

There's not much to say about today's action. The indices just consolidated last week's gains on lighter volume -- which is bullish action. Just about all the indices made NR7 bars today so those bars should (could) be good ones to trade off of, if NR7s are your thing.

The Nasdaq's sitting just under that important 2100 level.

The futures are down a little this morning so I guess we'll find out if Friday's low volume rally was for real. If we head higher during the day I'm expecting a struggle at the early July highs on the S&P 500.

Potential swing trades:

It was a struggle on Wednesday and Thursday bit the bulls finished the week strong on Friday. But while the price action was undeniably impressive volume was lacking. Yes, I know I always complain about the upside volume but I have to call 'em as I see 'em. I'm not alone though, IBD has issues with the volume too ($):

For the week, the Nasdaq advanced 3.7%, its biggest price gain since the first week of the year. The S&P 500 climbed 3.1%. The Dow pocketed a 3.2% gain.

But the market's day-to-day action calls those gains into doubt. The major indexes twice posted large gains in weak volume. Combine those two divergent sessions with Thursday's distribution day, and you get a market that's not showing much conviction.

The market fares best when price and volume move higher in tandem. When stocks grab big price gains in light volume, that's a sign that institutional investors aren't buying shares with any kind of intensity. Without that institutional support, the market may be vulnerable to a pullback.

The big picture remains the same. The market is still in a downtrend.

Still, we must respect the price action, low volume or not. The true test will be whether the S&P 500 and the Dow can close above the trading range they've been in since mid-May. They've yet to make higher-highs relative to the June highs.

The Naz finally got through that 2075 area but there's still plenty of overhead resistance. Breaking the blue trendline will be key for th bulls.

The S&P closed just below the June highs. The bears have to be very nervous right about now...

The Dow looks a lot like the S&P, perched just under resistance.

The Russell had a big day on Friday but is still well within its longer-term downtrend and the descending trianlge I pointed out on Thursday.

I'm doing another flip of the Russell's short-term trend.

The question on Qualcomm is do I think it's bottomed. I see nothing in the chart that leads me to believe QCOM has bottomed. But I guess it all depends on your time frame. In the short term it's promising that the stock was finally able to close above its 10-day moving average. It's down a lot in a short period of time and could easily get a sizeable bounce from here. If it does get that bounce I'd expect the top of the channel and/or the 50-day moving average to be resistance.

If you've read this site for more than a few weeks you know it's almost impossible for me to be bullish on any stock that below both its 50 and 200-day moving averages. I'd be looking to short rallies as long as it's under those moving averages.

I was asked what I thought was a good entry and target price for shorting the Dow Transportation Index. My answer, as if often the case is "it depends". One possible entry is at or near the top of its downtrend channel whch, at the moment, is around $81. If I were to try to catch the top of the channel I'd only short it if it showed some weakness after it's reached the top of the channel. A bearish candle or two would be great.

One thing that I don't like about that strategy is that the index would be back above the June lows and the 200-day moving average. I'd be worried about those levels becoming support. So if I wanted to hang on to this position for a while I'd wait for it to close under the 200-day moving average again and then short it. My stop would go just above $80.

As for targets -- I don't see much support on the way down. There's a bit around 75, some more around 73 and then what looks like pretty solid support just above 68.

The futures point to a higher open today but still well within the ranges of the last few days. I'm hoping that we can break the ranges today. Up or down, it doesn't matter to me, although I do see a lot of good looking short setups on the daily charts.

Potential swing trades:

Jerry wrote:

I wanted to know your option on GOOG. For the first time GOOG posted good earnings and the stock goes down... :-?

I'm not sure if this is the first time it dropped post-earnings but I could be wrong... I've been watching GOOG the last several days as it's tried to climb back above its 200-day moving average. It looks ready to break down to me but I've thought that before and it didn't happen. I still think that late March gap is begging to be filled. The chart looks really bad to me in this shorter time frame:

But when we zoom out a bit I see a huge symmetrical triangle. Based on this view I'd wait for Google to break (if & when) the bottom of the triangle before shorting it.

On a related note, can Google withstand the apparent pressure that's on many other internet companies / stocks?

I think the Yahoo Inc. (YHOO) knife catchers have shot their wads. The stock looks ready to roll over and retest 25. It'll probably be healthy for those lows to be retested in order to shake out the weak holders. Besides, I rarely trust V bottoms, especially after such a huge drop.

eBay Inc. (EBAY) looks like death:

and even Rackable Systems (Nasdaq: RACK) blew-up post-earning tonight. Their story is that they sell servers to Google and other big internet companies. Clearly all is not well in this space:

I'm glad Jason, who is short the Dow, requested a Dow chart because I meant to post it in tonight's recap. I happened to catch Art Cashin's spot on CNBC this afternoon and he mentioned some Dow technicals. Apparently folks on the floor of the NYSE are focused on the 90-day moving average. Why the 90-day? Beats me, I can't recall ever hearing of people following that average. But I guess that's why I'm not on CNBC nor on the floor of the exchange. :d

So I've included the 90 DMA on the chart below -- it's the green line. As you see it was the high yesterday and after a short trip above the line today the Dow fell back. But what's more compelling to me are the two doji (reversal candlesticks) which both challenged the downward sloping trendline and closed below. Also note the stochastic sell signal.

This sure sees like a good, low-risk spot to be short the Dow. You've got the trendline, the 90 DMA and the early July highs as resistance just above. Those areas are logical and relatively close spots to place stops.

Except for a quick head fake higher just after the open the S&P 500 and Nasdaq stayed in the range they've defined over the past two days. I was as impressed with what the sellers did today as I was with the bulls' resolve the last two days. But we've got to see if they can break the bottom of these ranges.

The Nasdaq crossed 2075 and fell back for the third day in a row. It made a bearish engulfing pattern today and is very close to short-term overbought. I think the odds favor a breakdown here...

The S&P had another 200-day moving average battle again today. This time the bears won by pushing the index back under that line. On Balance Volume still looks ominous to me and stochastic just gave a sell signal.

The small caps got hit hardest today as the Russell 2000 lost 1.26%. It tagged its 50-day moving average and reversed lower to close under the 10-day moving average. It also looks like it's building a huge descending triangle. That's usually bearish... look out below? We'll see.

I've changed the Russell's short-term trend back to down since it's under the 10-day moving average, even if just barely.

The buyers appear to still be determined to push the market higher. We're set to gap up right to yesterday's highs on the indices. I have no idea if they can push through what's been resistance for the last two days but this should make for an interesting first hour.

Gold is en fuego this morning as it pops above its 50-day moving average. So I'm keeping a close eye on GLD and some gold stocks.

Potential swing trades:

There's not much to say about today's action. The indices just consolidated last week's gains on lighter volume -- which is bullish action. Just about all the indices made NR7 bars today so those bars should (could) be good ones to trade off of, if NR7s are your thing.

The Nasdaq's sitting just under that important 2100 level.

The futures are down a little this morning so I guess we'll find out if Friday's low volume rally was for real. If we head higher during the day I'm expecting a struggle at the early July highs on the S&P 500.

Potential swing trades:

It was a struggle on Wednesday and Thursday bit the bulls finished the week strong on Friday. But while the price action was undeniably impressive volume was lacking. Yes, I know I always complain about the upside volume but I have to call 'em as I see 'em. I'm not alone though, IBD has issues with the volume too ($):

For the week, the Nasdaq advanced 3.7%, its biggest price gain since the first week of the year. The S&P 500 climbed 3.1%. The Dow pocketed a 3.2% gain.

But the market's day-to-day action calls those gains into doubt. The major indexes twice posted large gains in weak volume. Combine those two divergent sessions with Thursday's distribution day, and you get a market that's not showing much conviction.

The market fares best when price and volume move higher in tandem. When stocks grab big price gains in light volume, that's a sign that institutional investors aren't buying shares with any kind of intensity. Without that institutional support, the market may be vulnerable to a pullback.

The big picture remains the same. The market is still in a downtrend.

Still, we must respect the price action, low volume or not. The true test will be whether the S&P 500 and the Dow can close above the trading range they've been in since mid-May. They've yet to make higher-highs relative to the June highs.

The Naz finally got through that 2075 area but there's still plenty of overhead resistance. Breaking the blue trendline will be key for th bulls.

The S&P closed just below the June highs. The bears have to be very nervous right about now...

The Dow looks a lot like the S&P, perched just under resistance.

The Russell had a big day on Friday but is still well within its longer-term downtrend and the descending trianlge I pointed out on Thursday.

I'm doing another flip of the Russell's short-term trend.

The question on Qualcomm is do I think it's bottomed. I see nothing in the chart that leads me to believe QCOM has bottomed. But I guess it all depends on your time frame. In the short term it's promising that the stock was finally able to close above its 10-day moving average. It's down a lot in a short period of time and could easily get a sizeable bounce from here. If it does get that bounce I'd expect the top of the channel and/or the 50-day moving average to be resistance.

If you've read this site for more than a few weeks you know it's almost impossible for me to be bullish on any stock that below both its 50 and 200-day moving averages. I'd be looking to short rallies as long as it's under those moving averages.

I was asked what I thought was a good entry and target price for shorting the Dow Transportation Index. My answer, as if often the case is "it depends". One possible entry is at or near the top of its downtrend channel whch, at the moment, is around $81. If I were to try to catch the top of the channel I'd only short it if it showed some weakness after it's reached the top of the channel. A bearish candle or two would be great.

One thing that I don't like about that strategy is that the index would be back above the June lows and the 200-day moving average. I'd be worried about those levels becoming support. So if I wanted to hang on to this position for a while I'd wait for it to close under the 200-day moving average again and then short it. My stop would go just above $80.

As for targets -- I don't see much support on the way down. There's a bit around 75, some more around 73 and then what looks like pretty solid support just above 68.

The futures point to a higher open today but still well within the ranges of the last few days. I'm hoping that we can break the ranges today. Up or down, it doesn't matter to me, although I do see a lot of good looking short setups on the daily charts.

Potential swing trades:

Jerry wrote:

I wanted to know your option on GOOG. For the first time GOOG posted good earnings and the stock goes down... :-?

I'm not sure if this is the first time it dropped post-earnings but I could be wrong... I've been watching GOOG the last several days as it's tried to climb back above its 200-day moving average. It looks ready to break down to me but I've thought that before and it didn't happen. I still think that late March gap is begging to be filled. The chart looks really bad to me in this shorter time frame:

But when we zoom out a bit I see a huge symmetrical triangle. Based on this view I'd wait for Google to break (if & when) the bottom of the triangle before shorting it.

On a related note, can Google withstand the apparent pressure that's on many other internet companies / stocks?

I think the Yahoo Inc. (YHOO) knife catchers have shot their wads. The stock looks ready to roll over and retest 25. It'll probably be healthy for those lows to be retested in order to shake out the weak holders. Besides, I rarely trust V bottoms, especially after such a huge drop.

eBay Inc. (EBAY) looks like death:

and even Rackable Systems (Nasdaq: RACK) blew-up post-earning tonight. Their story is that they sell servers to Google and other big internet companies. Clearly all is not well in this space:

I'm glad Jason, who is short the Dow, requested a Dow chart because I meant to post it in tonight's recap. I happened to catch Art Cashin's spot on CNBC this afternoon and he mentioned some Dow technicals. Apparently folks on the floor of the NYSE are focused on the 90-day moving average. Why the 90-day? Beats me, I can't recall ever hearing of people following that average. But I guess that's why I'm not on CNBC nor on the floor of the exchange. :d

So I've included the 90 DMA on the chart below -- it's the green line. As you see it was the high yesterday and after a short trip above the line today the Dow fell back. But what's more compelling to me are the two doji (reversal candlesticks) which both challenged the downward sloping trendline and closed below. Also note the stochastic sell signal.

This sure sees like a good, low-risk spot to be short the Dow. You've got the trendline, the 90 DMA and the early July highs as resistance just above. Those areas are logical and relatively close spots to place stops.

Except for a quick head fake higher just after the open the S&P 500 and Nasdaq stayed in the range they've defined over the past two days. I was as impressed with what the sellers did today as I was with the bulls' resolve the last two days. But we've got to see if they can break the bottom of these ranges.

The Nasdaq crossed 2075 and fell back for the third day in a row. It made a bearish engulfing pattern today and is very close to short-term overbought. I think the odds favor a breakdown here...

The S&P had another 200-day moving average battle again today. This time the bears won by pushing the index back under that line. On Balance Volume still looks ominous to me and stochastic just gave a sell signal.

The small caps got hit hardest today as the Russell 2000 lost 1.26%. It tagged its 50-day moving average and reversed lower to close under the 10-day moving average. It also looks like it's building a huge descending triangle. That's usually bearish... look out below? We'll see.

I've changed the Russell's short-term trend back to down since it's under the 10-day moving average, even if just barely.

The buyers appear to still be determined to push the market higher. We're set to gap up right to yesterday's highs on the indices. I have no idea if they can push through what's been resistance for the last two days but this should make for an interesting first hour.

Gold is en fuego this morning as it pops above its 50-day moving average. So I'm keeping a close eye on GLD and some gold stocks.

Potential swing trades:

There's not much to say about today's action. The indices just consolidated last week's gains on lighter volume -- which is bullish action. Just about all the indices made NR7 bars today so those bars should (could) be good ones to trade off of, if NR7s are your thing.

The Nasdaq's sitting just under that important 2100 level.

The futures are down a little this morning so I guess we'll find out if Friday's low volume rally was for real. If we head higher during the day I'm expecting a struggle at the early July highs on the S&P 500.

Potential swing trades:

It was a struggle on Wednesday and Thursday bit the bulls finished the week strong on Friday. But while the price action was undeniably impressive volume was lacking. Yes, I know I always complain about the upside volume but I have to call 'em as I see 'em. I'm not alone though, IBD has issues with the volume too ($):

For the week, the Nasdaq advanced 3.7%, its biggest price gain since the first week of the year. The S&P 500 climbed 3.1%. The Dow pocketed a 3.2% gain.

But the market's day-to-day action calls those gains into doubt. The major indexes twice posted large gains in weak volume. Combine those two divergent sessions with Thursday's distribution day, and you get a market that's not showing much conviction.

The market fares best when price and volume move higher in tandem. When stocks grab big price gains in light volume, that's a sign that institutional investors aren't buying shares with any kind of intensity. Without that institutional support, the market may be vulnerable to a pullback.

The big picture remains the same. The market is still in a downtrend.

Still, we must respect the price action, low volume or not. The true test will be whether the S&P 500 and the Dow can close above the trading range they've been in since mid-May. They've yet to make higher-highs relative to the June highs.

The Naz finally got through that 2075 area but there's still plenty of overhead resistance. Breaking the blue trendline will be key for th bulls.

The S&P closed just below the June highs. The bears have to be very nervous right about now...

The Dow looks a lot like the S&P, perched just under resistance.

The Russell had a big day on Friday but is still well within its longer-term downtrend and the descending trianlge I pointed out on Thursday.

I'm doing another flip of the Russell's short-term trend.

The question on Qualcomm is do I think it's bottomed. I see nothing in the chart that leads me to believe QCOM has bottomed. But I guess it all depends on your time frame. In the short term it's promising that the stock was finally able to close above its 10-day moving average. It's down a lot in a short period of time and could easily get a sizeable bounce from here. If it does get that bounce I'd expect the top of the channel and/or the 50-day moving average to be resistance.

If you've read this site for more than a few weeks you know it's almost impossible for me to be bullish on any stock that below both its 50 and 200-day moving averages. I'd be looking to short rallies as long as it's under those moving averages.

I was asked what I thought was a good entry and target price for shorting the Dow Transportation Index. My answer, as if often the case is "it depends". One possible entry is at or near the top of its downtrend channel whch, at the moment, is around $81. If I were to try to catch the top of the channel I'd only short it if it showed some weakness after it's reached the top of the channel. A bearish candle or two would be great.

One thing that I don't like about that strategy is that the index would be back above the June lows and the 200-day moving average. I'd be worried about those levels becoming support. So if I wanted to hang on to this position for a while I'd wait for it to close under the 200-day moving average again and then short it. My stop would go just above $80.

As for targets -- I don't see much support on the way down. There's a bit around 75, some more around 73 and then what looks like pretty solid support just above 68.

The futures point to a higher open today but still well within the ranges of the last few days. I'm hoping that we can break the ranges today. Up or down, it doesn't matter to me, although I do see a lot of good looking short setups on the daily charts.

Potential swing trades:

Jerry wrote:

I wanted to know your option on GOOG. For the first time GOOG posted good earnings and the stock goes down... :-?

I'm not sure if this is the first time it dropped post-earnings but I could be wrong... I've been watching GOOG the last several days as it's tried to climb back above its 200-day moving average. It looks ready to break down to me but I've thought that before and it didn't happen. I still think that late March gap is begging to be filled. The chart looks really bad to me in this shorter time frame:

But when we zoom out a bit I see a huge symmetrical triangle. Based on this view I'd wait for Google to break (if & when) the bottom of the triangle before shorting it.

On a related note, can Google withstand the apparent pressure that's on many other internet companies / stocks?

I think the Yahoo Inc. (YHOO) knife catchers have shot their wads. The stock looks ready to roll over and retest 25. It'll probably be healthy for those lows to be retested in order to shake out the weak holders. Besides, I rarely trust V bottoms, especially after such a huge drop.

eBay Inc. (EBAY) looks like death:

and even Rackable Systems (Nasdaq: RACK) blew-up post-earning tonight. Their story is that they sell servers to Google and other big internet companies. Clearly all is not well in this space:

I'm glad Jason, who is short the Dow, requested a Dow chart because I meant to post it in tonight's recap. I happened to catch Art Cashin's spot on CNBC this afternoon and he mentioned some Dow technicals. Apparently folks on the floor of the NYSE are focused on the 90-day moving average. Why the 90-day? Beats me, I can't recall ever hearing of people following that average. But I guess that's why I'm not on CNBC nor on the floor of the exchange. :d

So I've included the 90 DMA on the chart below -- it's the green line. As you see it was the high yesterday and after a short trip above the line today the Dow fell back. But what's more compelling to me are the two doji (reversal candlesticks) which both challenged the downward sloping trendline and closed below. Also note the stochastic sell signal.

This sure sees like a good, low-risk spot to be short the Dow. You've got the trendline, the 90 DMA and the early July highs as resistance just above. Those areas are logical and relatively close spots to place stops.

Except for a quick head fake higher just after the open the S&P 500 and Nasdaq stayed in the range they've defined over the past two days. I was as impressed with what the sellers did today as I was with the bulls' resolve the last two days. But we've got to see if they can break the bottom of these ranges.

The Nasdaq crossed 2075 and fell back for the third day in a row. It made a bearish engulfing pattern today and is very close to short-term overbought. I think the odds favor a breakdown here...

The S&P had another 200-day moving average battle again today. This time the bears won by pushing the index back under that line. On Balance Volume still looks ominous to me and stochastic just gave a sell signal.

The small caps got hit hardest today as the Russell 2000 lost 1.26%. It tagged its 50-day moving average and reversed lower to close under the 10-day moving average. It also looks like it's building a huge descending triangle. That's usually bearish... look out below? We'll see.

I've changed the Russell's short-term trend back to down since it's under the 10-day moving average, even if just barely.

The buyers appear to still be determined to push the market higher. We're set to gap up right to yesterday's highs on the indices. I have no idea if they can push through what's been resistance for the last two days but this should make for an interesting first hour.

Gold is en fuego this morning as it pops above its 50-day moving average. So I'm keeping a close eye on GLD and some gold stocks.

Potential swing trades:

There's not much to say about today's action. The indices just consolidated last week's gains on lighter volume -- which is bullish action. Just about all the indices made NR7 bars today so those bars should (could) be good ones to trade off of, if NR7s are your thing.

The Nasdaq's sitting just under that important 2100 level.

The futures are down a little this morning so I guess we'll find out if Friday's low volume rally was for real. If we head higher during the day I'm expecting a struggle at the early July highs on the S&P 500.

Potential swing trades:

It was a struggle on Wednesday and Thursday bit the bulls finished the week strong on Friday. But while the price action was undeniably impressive volume was lacking. Yes, I know I always complain about the upside volume but I have to call 'em as I see 'em. I'm not alone though, IBD has issues with the volume too ($):

For the week, the Nasdaq advanced 3.7%, its biggest price gain since the first week of the year. The S&P 500 climbed 3.1%. The Dow pocketed a 3.2% gain.

But the market's day-to-day action calls those gains into doubt. The major indexes twice posted large gains in weak volume. Combine those two divergent sessions with Thursday's distribution day, and you get a market that's not showing much conviction.

The market fares best when price and volume move higher in tandem. When stocks grab big price gains in light volume, that's a sign that institutional investors aren't buying shares with any kind of intensity. Without that institutional support, the market may be vulnerable to a pullback.

The big picture remains the same. The market is still in a downtrend.

Still, we must respect the price action, low volume or not. The true test will be whether the S&P 500 and the Dow can close above the trading range they've been in since mid-May. They've yet to make higher-highs relative to the June highs.

The Naz finally got through that 2075 area but there's still plenty of overhead resistance. Breaking the blue trendline will be key for th bulls.

The S&P closed just below the June highs. The bears have to be very nervous right about now...

The Dow looks a lot like the S&P, perched just under resistance.

The Russell had a big day on Friday but is still well within its longer-term downtrend and the descending trianlge I pointed out on Thursday.

I'm doing another flip of the Russell's short-term trend.

The question on Qualcomm is do I think it's bottomed. I see nothing in the chart that leads me to believe QCOM has bottomed. But I guess it all depends on your time frame. In the short term it's promising that the stock was finally able to close above its 10-day moving average. It's down a lot in a short period of time and could easily get a sizeable bounce from here. If it does get that bounce I'd expect the top of the channel and/or the 50-day moving average to be resistance.

If you've read this site for more than a few weeks you know it's almost impossible for me to be bullish on any stock that below both its 50 and 200-day moving averages. I'd be looking to short rallies as long as it's under those moving averages.

I was asked what I thought was a good entry and target price for shorting the Dow Transportation Index. My answer, as if often the case is "it depends". One possible entry is at or near the top of its downtrend channel whch, at the moment, is around $81. If I were to try to catch the top of the channel I'd only short it if it showed some weakness after it's reached the top of the channel. A bearish candle or two would be great.

One thing that I don't like about that strategy is that the index would be back above the June lows and the 200-day moving average. I'd be worried about those levels becoming support. So if I wanted to hang on to this position for a while I'd wait for it to close under the 200-day moving average again and then short it. My stop would go just above $80.

As for targets -- I don't see much support on the way down. There's a bit around 75, some more around 73 and then what looks like pretty solid support just above 68.

The futures point to a higher open today but still well within the ranges of the last few days. I'm hoping that we can break the ranges today. Up or down, it doesn't matter to me, although I do see a lot of good looking short setups on the daily charts.

Potential swing trades:

Jerry wrote:

I wanted to know your option on GOOG. For the first time GOOG posted good earnings and the stock goes down... :-?

I'm not sure if this is the first time it dropped post-earnings but I could be wrong... I've been watching GOOG the last several days as it's tried to climb back above its 200-day moving average. It looks ready to break down to me but I've thought that before and it didn't happen. I still think that late March gap is begging to be filled. The chart looks really bad to me in this shorter time frame:

But when we zoom out a bit I see a huge symmetrical triangle. Based on this view I'd wait for Google to break (if & when) the bottom of the triangle before shorting it.

On a related note, can Google withstand the apparent pressure that's on many other internet companies / stocks?

I think the Yahoo Inc. (YHOO) knife catchers have shot their wads. The stock looks ready to roll over and retest 25. It'll probably be healthy for those lows to be retested in order to shake out the weak holders. Besides, I rarely trust V bottoms, especially after such a huge drop.

eBay Inc. (EBAY) looks like death:

and even Rackable Systems (Nasdaq: RACK) blew-up post-earning tonight. Their story is that they sell servers to Google and other big internet companies. Clearly all is not well in this space:

I'm glad Jason, who is short the Dow, requested a Dow chart because I meant to post it in tonight's recap. I happened to catch Art Cashin's spot on CNBC this afternoon and he mentioned some Dow technicals. Apparently folks on the floor of the NYSE are focused on the 90-day moving average. Why the 90-day? Beats me, I can't recall ever hearing of people following that average. But I guess that's why I'm not on CNBC nor on the floor of the exchange. :d

So I've included the 90 DMA on the chart below -- it's the green line. As you see it was the high yesterday and after a short trip above the line today the Dow fell back. But what's more compelling to me are the two doji (reversal candlesticks) which both challenged the downward sloping trendline and closed below. Also note the stochastic sell signal.

This sure sees like a good, low-risk spot to be short the Dow. You've got the trendline, the 90 DMA and the early July highs as resistance just above. Those areas are logical and relatively close spots to place stops.

Except for a quick head fake higher just after the open the S&P 500 and Nasdaq stayed in the range they've defined over the past two days. I was as impressed with what the sellers did today as I was with the bulls' resolve the last two days. But we've got to see if they can break the bottom of these ranges.

The Nasdaq crossed 2075 and fell back for the third day in a row. It made a bearish engulfing pattern today and is very close to short-term overbought. I think the odds favor a breakdown here...

The S&P had another 200-day moving average battle again today. This time the bears won by pushing the index back under that line. On Balance Volume still looks ominous to me and stochastic just gave a sell signal.

The small caps got hit hardest today as the Russell 2000 lost 1.26%. It tagged its 50-day moving average and reversed lower to close under the 10-day moving average. It also looks like it's building a huge descending triangle. That's usually bearish... look out below? We'll see.

I've changed the Russell's short-term trend back to down since it's under the 10-day moving average, even if just barely.

The buyers appear to still be determined to push the market higher. We're set to gap up right to yesterday's highs on the indices. I have no idea if they can push through what's been resistance for the last two days but this should make for an interesting first hour.

Gold is en fuego this morning as it pops above its 50-day moving average. So I'm keeping a close eye on GLD and some gold stocks.

Potential swing trades:

There's not much to say about today's action. The indices just consolidated last week's gains on lighter volume -- which is bullish action. Just about all the indices made NR7 bars today so those bars should (could) be good ones to trade off of, if NR7s are your thing.

The Nasdaq's sitting just under that important 2100 level.

The futures are down a little this morning so I guess we'll find out if Friday's low volume rally was for real. If we head higher during the day I'm expecting a struggle at the early July highs on the S&P 500.

Potential swing trades:

It was a struggle on Wednesday and Thursday bit the bulls finished the week strong on Friday. But while the price action was undeniably impressive volume was lacking. Yes, I know I always complain about the upside volume but I have to call 'em as I see 'em. I'm not alone though, IBD has issues with the volume too ($):

For the week, the Nasdaq advanced 3.7%, its biggest price gain since the first week of the year. The S&P 500 climbed 3.1%. The Dow pocketed a 3.2% gain.

But the market's day-to-day action calls those gains into doubt. The major indexes twice posted large gains in weak volume. Combine those two divergent sessions with Thursday's distribution day, and you get a market that's not showing much conviction.

The market fares best when price and volume move higher in tandem. When stocks grab big price gains in light volume, that's a sign that institutional investors aren't buying shares with any kind of intensity. Without that institutional support, the market may be vulnerable to a pullback.

The big picture remains the same. The market is still in a downtrend.

Still, we must respect the price action, low volume or not. The true test will be whether the S&P 500 and the Dow can close above the trading range they've been in since mid-May. They've yet to make higher-highs relative to the June highs.

The Naz finally got through that 2075 area but there's still plenty of overhead resistance. Breaking the blue trendline will be key for th bulls.

The S&P closed just below the June highs. The bears have to be very nervous right about now...

The Dow looks a lot like the S&P, perched just under resistance.

The Russell had a big day on Friday but is still well within its longer-term downtrend and the descending trianlge I pointed out on Thursday.

I'm doing another flip of the Russell's short-term trend.

The question on Qualcomm is do I think it's bottomed. I see nothing in the chart that leads me to believe QCOM has bottomed. But I guess it all depends on your time frame. In the short term it's promising that the stock was finally able to close above its 10-day moving average. It's down a lot in a short period of time and could easily get a sizeable bounce from here. If it does get that bounce I'd expect the top of the channel and/or the 50-day moving average to be resistance.

If you've read this site for more than a few weeks you know it's almost impossible for me to be bullish on any stock that below both its 50 and 200-day moving averages. I'd be looking to short rallies as long as it's under those moving averages.

I was asked what I thought was a good entry and target price for shorting the Dow Transportation Index. My answer, as if often the case is "it depends". One possible entry is at or near the top of its downtrend channel whch, at the moment, is around $81. If I were to try to catch the top of the channel I'd only short it if it showed some weakness after it's reached the top of the channel. A bearish candle or two would be great.

One thing that I don't like about that strategy is that the index would be back above the June lows and the 200-day moving average. I'd be worried about those levels becoming support. So if I wanted to hang on to this position for a while I'd wait for it to close under the 200-day moving average again and then short it. My stop would go just above $80.

As for targets -- I don't see much support on the way down. There's a bit around 75, some more around 73 and then what looks like pretty solid support just above 68.

The futures point to a higher open today but still well within the ranges of the last few days. I'm hoping that we can break the ranges today. Up or down, it doesn't matter to me, although I do see a lot of good looking short setups on the daily charts.

Potential swing trades:

Jerry wrote:

I wanted to know your option on GOOG. For the first time GOOG posted good earnings and the stock goes down... :-?

I'm not sure if this is the first time it dropped post-earnings but I could be wrong... I've been watching GOOG the last several days as it's tried to climb back above its 200-day moving average. It looks ready to break down to me but I've thought that before and it didn't happen. I still think that late March gap is begging to be filled. The chart looks really bad to me in this shorter time frame:

But when we zoom out a bit I see a huge symmetrical triangle. Based on this view I'd wait for Google to break (if & when) the bottom of the triangle before shorting it.

On a related note, can Google withstand the apparent pressure that's on many other internet companies / stocks?

I think the Yahoo Inc. (YHOO) knife catchers have shot their wads. The stock looks ready to roll over and retest 25. It'll probably be healthy for those lows to be retested in order to shake out the weak holders. Besides, I rarely trust V bottoms, especially after such a huge drop.

eBay Inc. (EBAY) looks like death:

and even Rackable Systems (Nasdaq: RACK) blew-up post-earning tonight. Their story is that they sell servers to Google and other big internet companies. Clearly all is not well in this space:

I'm glad Jason, who is short the Dow, requested a Dow chart because I meant to post it in tonight's recap. I happened to catch Art Cashin's spot on CNBC this afternoon and he mentioned some Dow technicals. Apparently folks on the floor of the NYSE are focused on the 90-day moving average. Why the 90-day? Beats me, I can't recall ever hearing of people following that average. But I guess that's why I'm not on CNBC nor on the floor of the exchange. :d

So I've included the 90 DMA on the chart below -- it's the green line. As you see it was the high yesterday and after a short trip above the line today the Dow fell back. But what's more compelling to me are the two doji (reversal candlesticks) which both challenged the downward sloping trendline and closed below. Also note the stochastic sell signal.

This sure sees like a good, low-risk spot to be short the Dow. You've got the trendline, the 90 DMA and the early July highs as resistance just above. Those areas are logical and relatively close spots to place stops.

Except for a quick head fake higher just after the open the S&P 500 and Nasdaq stayed in the range they've defined over the past two days. I was as impressed with what the sellers did today as I was with the bulls' resolve the last two days. But we've got to see if they can break the bottom of these ranges.

The Nasdaq crossed 2075 and fell back for the third day in a row. It made a bearish engulfing pattern today and is very close to short-term overbought. I think the odds favor a breakdown here...

The S&P had another 200-day moving average battle again today. This time the bears won by pushing the index back under that line. On Balance Volume still looks ominous to me and stochastic just gave a sell signal.

The small caps got hit hardest today as the Russell 2000 lost 1.26%. It tagged its 50-day moving average and reversed lower to close under the 10-day moving average. It also looks like it's building a huge descending triangle. That's usually bearish... look out below? We'll see.

I've changed the Russell's short-term trend back to down since it's under the 10-day moving average, even if just barely.

The buyers appear to still be determined to push the market higher. We're set to gap up right to yesterday's highs on the indices. I have no idea if they can push through what's been resistance for the last two days but this should make for an interesting first hour.

Gold is en fuego this morning as it pops above its 50-day moving average. So I'm keeping a close eye on GLD and some gold stocks.

Potential swing trades:

There's not much to say about today's action. The indices just consolidated last week's gains on lighter volume -- which is bullish action. Just about all the indices made NR7 bars today so those bars should (could) be good ones to trade off of, if NR7s are your thing.

The Nasdaq's sitting just under that important 2100 level.

The futures are down a little this morning so I guess we'll find out if Friday's low volume rally was for real. If we head higher during the day I'm expecting a struggle at the early July highs on the S&P 500.

Potential swing trades:

It was a struggle on Wednesday and Thursday bit the bulls finished the week strong on Friday. But while the price action was undeniably impressive volume was lacking. Yes, I know I always complain about the upside volume but I have to call 'em as I see 'em. I'm not alone though, IBD has issues with the volume too ($):

For the week, the Nasdaq advanced 3.7%, its biggest price gain since the first week of the year. The S&P 500 climbed 3.1%. The Dow pocketed a 3.2% gain.

But the market's day-to-day action calls those gains into doubt. The major indexes twice posted large gains in weak volume. Combine those two divergent sessions with Thursday's distribution day, and you get a market that's not showing much conviction.

The market fares best when price and volume move higher in tandem. When stocks grab big price gains in light volume, that's a sign that institutional investors aren't buying shares with any kind of intensity. Without that institutional support, the market may be vulnerable to a pullback.

The big picture remains the same. The market is still in a downtrend.

Still, we must respect the price action, low volume or not. The true test will be whether the S&P 500 and the Dow can close above the trading range they've been in since mid-May. They've yet to make higher-highs relative to the June highs.

The Naz finally got through that 2075 area but there's still plenty of overhead resistance. Breaking the blue trendline will be key for th bulls.

The S&P closed just below the June highs. The bears have to be very nervous right about now...

The Dow looks a lot like the S&P, perched just under resistance.

The Russell had a big day on Friday but is still well within its longer-term downtrend and the descending trianlge I pointed out on Thursday.

I'm doing another flip of the Russell's short-term trend.

The question on Qualcomm is do I think it's bottomed. I see nothing in the chart that leads me to believe QCOM has bottomed. But I guess it all depends on your time frame. In the short term it's promising that the stock was finally able to close above its 10-day moving average. It's down a lot in a short period of time and could easily get a sizeable bounce from here. If it does get that bounce I'd expect the top of the channel and/or the 50-day moving average to be resistance.

If you've read this site for more than a few weeks you know it's almost impossible for me to be bullish on any stock that below both its 50 and 200-day moving averages. I'd be looking to short rallies as long as it's under those moving averages.

I was asked what I thought was a good entry and target price for shorting the Dow Transportation Index. My answer, as if often the case is "it depends". One possible entry is at or near the top of its downtrend channel whch, at the moment, is around $81. If I were to try to catch the top of the channel I'd only short it if it showed some weakness after it's reached the top of the channel. A bearish candle or two would be great.

One thing that I don't like about that strategy is that the index would be back above the June lows and the 200-day moving average. I'd be worried about those levels becoming support. So if I wanted to hang on to this position for a while I'd wait for it to close under the 200-day moving average again and then short it. My stop would go just above $80.

As for targets -- I don't see much support on the way down. There's a bit around 75, some more around 73 and then what looks like pretty solid support just above 68.

The futures point to a higher open today but still well within the ranges of the last few days. I'm hoping that we can break the ranges today. Up or down, it doesn't matter to me, although I do see a lot of good looking short setups on the daily charts.

Potential swing trades:

Jerry wrote:

I wanted to know your option on GOOG. For the first time GOOG posted good earnings and the stock goes down... :-?

I'm not sure if this is the first time it dropped post-earnings but I could be wrong... I've been watching GOOG the last several days as it's tried to climb back above its 200-day moving average. It looks ready to break down to me but I've thought that before and it didn't happen. I still think that late March gap is begging to be filled. The chart looks really bad to me in this shorter time frame:

But when we zoom out a bit I see a huge symmetrical triangle. Based on this view I'd wait for Google to break (if & when) the bottom of the triangle before shorting it.

On a related note, can Google withstand the apparent pressure that's on many other internet companies / stocks?

I think the Yahoo Inc. (YHOO) knife catchers have shot their wads. The stock looks ready to roll over and retest 25. It'll probably be healthy for those lows to be retested in order to shake out the weak holders. Besides, I rarely trust V bottoms, especially after such a huge drop.

eBay Inc. (EBAY) looks like death:

and even Rackable Systems (Nasdaq: RACK) blew-up post-earning tonight. Their story is that they sell servers to Google and other big internet companies. Clearly all is not well in this space:

I'm glad Jason, who is short the Dow, requested a Dow chart because I meant to post it in tonight's recap. I happened to catch Art Cashin's spot on CNBC this afternoon and he mentioned some Dow technicals. Apparently folks on the floor of the NYSE are focused on the 90-day moving average. Why the 90-day? Beats me, I can't recall ever hearing of people following that average. But I guess that's why I'm not on CNBC nor on the floor of the exchange. :d

So I've included the 90 DMA on the chart below -- it's the green line. As you see it was the high yesterday and after a short trip above the line today the Dow fell back. But what's more compelling to me are the two doji (reversal candlesticks) which both challenged the downward sloping trendline and closed below. Also note the stochastic sell signal.

This sure sees like a good, low-risk spot to be short the Dow. You've got the trendline, the 90 DMA and the early July highs as resistance just above. Those areas are logical and relatively close spots to place stops.

Except for a quick head fake higher just after the open the S&P 500 and Nasdaq stayed in the range they've defined over the past two days. I was as impressed with what the sellers did today as I was with the bulls' resolve the last two days. But we've got to see if they can break the bottom of these ranges.

The Nasdaq crossed 2075 and fell back for the third day in a row. It made a bearish engulfing pattern today and is very close to short-term overbought. I think the odds favor a breakdown here...

The S&P had another 200-day moving average battle again today. This time the bears won by pushing the index back under that line. On Balance Volume still looks ominous to me and stochastic just gave a sell signal.

The small caps got hit hardest today as the Russell 2000 lost 1.26%. It tagged its 50-day moving average and reversed lower to close under the 10-day moving average. It also looks like it's building a huge descending triangle. That's usually bearish... look out below? We'll see.

I've changed the Russell's short-term trend back to down since it's under the 10-day moving average, even if just barely.

The buyers appear to still be determined to push the market higher. We're set to gap up right to yesterday's highs on the indices. I have no idea if they can push through what's been resistance for the last two days but this should make for an interesting first hour.

Gold is en fuego this morning as it pops above its 50-day moving average. So I'm keeping a close eye on GLD and some gold stocks.

Potential swing trades:

There's not much to say about today's action. The indices just consolidated last week's gains on lighter volume -- which is bullish action. Just about all the indices made NR7 bars today so those bars should (could) be good ones to trade off of, if NR7s are your thing.

The Nasdaq's sitting just under that important 2100 level.

The futures are down a little this morning so I guess we'll find out if Friday's low volume rally was for real. If we head higher during the day I'm expecting a struggle at the early July highs on the S&P 500.

Potential swing trades:

It was a struggle on Wednesday and Thursday bit the bulls finished the week strong on Friday. But while the price action was undeniably impressive volume was lacking. Yes, I know I always complain about the upside volume but I have to call 'em as I see 'em. I'm not alone though, IBD has issues with the volume too ($):

For the week, the Nasdaq advanced 3.7%, its biggest price gain since the first week of the year. The S&P 500 climbed 3.1%. The Dow pocketed a 3.2% gain.

But the market's day-to-day action calls those gains into doubt. The major indexes twice posted large gains in weak volume. Combine those two divergent sessions with Thursday's distribution day, and you get a market that's not showing much conviction.

The market fares best when price and volume move higher in tandem. When stocks grab big price gains in light volume, that's a sign that institutional investors aren't buying shares with any kind of intensity. Without that institutional support, the market may be vulnerable to a pullback.

The big picture remains the same. The market is still in a downtrend.

Still, we must respect the price action, low volume or not. The true test will be whether the S&P 500 and the Dow can close above the trading range they've been in since mid-May. They've yet to make higher-highs relative to the June highs.

The Naz finally got through that 2075 area but there's still plenty of overhead resistance. Breaking the blue trendline will be key for th bulls.

The S&P closed just below the June highs. The bears have to be very nervous right about now...

The Dow looks a lot like the S&P, perched just under resistance.

The Russell had a big day on Friday but is still well within its longer-term downtrend and the descending trianlge I pointed out on Thursday.

I'm doing another flip of the Russell's short-term trend.

The question on Qualcomm is do I think it's bottomed. I see nothing in the chart that leads me to believe QCOM has bottomed. But I guess it all depends on your time frame. In the short term it's promising that the stock was finally able to close above its 10-day moving average. It's down a lot in a short period of time and could easily get a sizeable bounce from here. If it does get that bounce I'd expect the top of the channel and/or the 50-day moving average to be resistance.

If you've read this site for more than a few weeks you know it's almost impossible for me to be bullish on any stock that below both its 50 and 200-day moving averages. I'd be looking to short rallies as long as it's under those moving averages.

I was asked what I thought was a good entry and target price for shorting the Dow Transportation Index. My answer, as if often the case is "it depends". One possible entry is at or near the top of its downtrend channel whch, at the moment, is around $81. If I were to try to catch the top of the channel I'd only short it if it showed some weakness after it's reached the top of the channel. A bearish candle or two would be great.

One thing that I don't like about that strategy is that the index would be back above the June lows and the 200-day moving average. I'd be worried about those levels becoming support. So if I wanted to hang on to this position for a while I'd wait for it to close under the 200-day moving average again and then short it. My stop would go just above $80.

As for targets -- I don't see much support on the way down. There's a bit around 75, some more around 73 and then what looks like pretty solid support just above 68.

The futures point to a higher open today but still well within the ranges of the last few days. I'm hoping that we can break the ranges today. Up or down, it doesn't matter to me, although I do see a lot of good looking short setups on the daily charts.

Potential swing trades:

Jerry wrote:

I wanted to know your option on GOOG. For the first time GOOG posted good earnings and the stock goes down... :-?

I'm not sure if this is the first time it dropped post-earnings but I could be wrong... I've been watching GOOG the last several days as it's tried to climb back above its 200-day moving average. It looks ready to break down to me but I've thought that before and it didn't happen. I still think that late March gap is begging to be filled. The chart looks really bad to me in this shorter time frame:

But when we zoom out a bit I see a huge symmetrical triangle. Based on this view I'd wait for Google to break (if & when) the bottom of the triangle before shorting it.

On a related note, can Google withstand the apparent pressure that's on many other internet companies / stocks?

I think the Yahoo Inc. (YHOO) knife catchers have shot their wads. The stock looks ready to roll over and retest 25. It'll probably be healthy for those lows to be retested in order to shake out the weak holders. Besides, I rarely trust V bottoms, especially after such a huge drop.

eBay Inc. (EBAY) looks like death:

and even Rackable Systems (Nasdaq: RACK) blew-up post-earning tonight. Their story is that they sell servers to Google and other big internet companies. Clearly all is not well in this space:

I'm glad Jason, who is short the Dow, requested a Dow chart because I meant to post it in tonight's recap. I happened to catch Art Cashin's spot on CNBC this afternoon and he mentioned some Dow technicals. Apparently folks on the floor of the NYSE are focused on the 90-day moving average. Why the 90-day? Beats me, I can't recall ever hearing of people following that average. But I guess that's why I'm not on CNBC nor on the floor of the exchange. :d

So I've included the 90 DMA on the chart below -- it's the green line. As you see it was the high yesterday and after a short trip above the line today the Dow fell back. But what's more compelling to me are the two doji (reversal candlesticks) which both challenged the downward sloping trendline and closed below. Also note the stochastic sell signal.

This sure sees like a good, low-risk spot to be short the Dow. You've got the trendline, the 90 DMA and the early July highs as resistance just above. Those areas are logical and relatively close spots to place stops.

Except for a quick head fake higher just after the open the S&P 500 and Nasdaq stayed in the range they've defined over the past two days. I was as impressed with what the sellers did today as I was with the bulls' resolve the last two days. But we've got to see if they can break the bottom of these ranges.

The Nasdaq crossed 2075 and fell back for the third day in a row. It made a bearish engulfing pattern today and is very close to short-term overbought. I think the odds favor a breakdown here...

The S&P had another 200-day moving average battle again today. This time the bears won by pushing the index back under that line. On Balance Volume still looks ominous to me and stochastic just gave a sell signal.

The small caps got hit hardest today as the Russell 2000 lost 1.26%. It tagged its 50-day moving average and reversed lower to close under the 10-day moving average. It also looks like it's building a huge descending triangle. That's usually bearish... look out below? We'll see.

I've changed the Russell's short-term trend back to down since it's under the 10-day moving average, even if just barely.

The buyers appear to still be determined to push the market higher. We're set to gap up right to yesterday's highs on the indices. I have no idea if they can push through what's been resistance for the last two days but this should make for an interesting first hour.

Gold is en fuego this morning as it pops above its 50-day moving average. So I'm keeping a close eye on GLD and some gold stocks.

Potential swing trades:

There's not much to say about today's action. The indices just consolidated last week's gains on lighter volume -- which is bullish action. Just about all the indices made NR7 bars today so those bars should (could) be good ones to trade off of, if NR7s are your thing.

The Nasdaq's sitting just under that important 2100 level.

The futures are down a little this morning so I guess we'll find out if Friday's low volume rally was for real. If we head higher during the day I'm expecting a struggle at the early July highs on the S&P 500.

Potential swing trades:

It was a struggle on Wednesday and Thursday bit the bulls finished the week strong on Friday. But while the price action was undeniably impressive volume was lacking. Yes, I know I always complain about the upside volume but I have to call 'em as I see 'em. I'm not alone though, IBD has issues with the volume too ($):

For the week, the Nasdaq advanced 3.7%, its biggest price gain since the first week of the year. The S&P 500 climbed 3.1%. The Dow pocketed a 3.2% gain.

But the market's day-to-day action calls those gains into doubt. The major indexes twice posted large gains in weak volume. Combine those two divergent sessions with Thursday's distribution day, and you get a market that's not showing much conviction.

The market fares best when price and volume move higher in tandem. When stocks grab big price gains in light volume, that's a sign that institutional investors aren't buying shares with any kind of intensity. Without that institutional support, the market may be vulnerable to a pullback.

The big picture remains the same. The market is still in a downtrend.

Still, we must respect the price action, low volume or not. The true test will be whether the S&P 500 and the Dow can close above the trading range they've been in since mid-May. They've yet to make higher-highs relative to the June highs.

The Naz finally got through that 2075 area but there's still plenty of overhead resistance. Breaking the blue trendline will be key for th bulls.

The S&P closed just below the June highs. The bears have to be very nervous right about now...

The Dow looks a lot like the S&P, perched just under resistance.

The Russell had a big day on Friday but is still well within its longer-term downtrend and the descending trianlge I pointed out on Thursday.

I'm doing another flip of the Russell's short-term trend.

The question on Qualcomm is do I think it's bottomed. I see nothing in the chart that leads me to believe QCOM has bottomed. But I guess it all depends on your time frame. In the short term it's promising that the stock was finally able to close above its 10-day moving average. It's down a lot in a short period of time and could easily get a sizeable bounce from here. If it does get that bounce I'd expect the top of the channel and/or the 50-day moving average to be resistance.

If you've read this site for more than a few weeks you know it's almost impossible for me to be bullish on any stock that below both its 50 and 200-day moving averages. I'd be looking to short rallies as long as it's under those moving averages.

I was asked what I thought was a good entry and target price for shorting the Dow Transportation Index. My answer, as if often the case is "it depends". One possible entry is at or near the top of its downtrend channel whch, at the moment, is around $81. If I were to try to catch the top of the channel I'd only short it if it showed some weakness after it's reached the top of the channel. A bearish candle or two would be great.

One thing that I don't like about that strategy is that the index would be back above the June lows and the 200-day moving average. I'd be worried about those levels becoming support. So if I wanted to hang on to this position for a while I'd wait for it to close under the 200-day moving average again and then short it. My stop would go just above $80.

As for targets -- I don't see much support on the way down. There's a bit around 75, some more around 73 and then what looks like pretty solid support just above 68.

The futures point to a higher open today but still well within the ranges of the last few days. I'm hoping that we can break the ranges today. Up or down, it doesn't matter to me, although I do see a lot of good looking short setups on the daily charts.

Potential swing trades:

Jerry wrote:

I wanted to know your option on GOOG. For the first time GOOG posted good earnings and the stock goes down... :-?

I'm not sure if this is the first time it dropped post-earnings but I could be wrong... I've been watching GOOG the last several days as it's tried to climb back above its 200-day moving average. It looks ready to break down to me but I've thought that before and it didn't happen. I still think that late March gap is begging to be filled. The chart looks really bad to me in this shorter time frame:

But when we zoom out a bit I see a huge symmetrical triangle. Based on this view I'd wait for Google to break (if & when) the bottom of the triangle before shorting it.

On a related note, can Google withstand the apparent pressure that's on many other internet companies / stocks?

I think the Yahoo Inc. (YHOO) knife catchers have shot their wads. The stock looks ready to roll over and retest 25. It'll probably be healthy for those lows to be retested in order to shake out the weak holders. Besides, I rarely trust V bottoms, especially after such a huge drop.

eBay Inc. (EBAY) looks like death:

and even Rackable Systems (Nasdaq: RACK) blew-up post-earning tonight. Their story is that they sell servers to Google and other big internet companies. Clearly all is not well in this space:

I'm glad Jason, who is short the Dow, requested a Dow chart because I meant to post it in tonight's recap. I happened to catch Art Cashin's spot on CNBC this afternoon and he mentioned some Dow technicals. Apparently folks on the floor of the NYSE are focused on the 90-day moving average. Why the 90-day? Beats me, I can't recall ever hearing of people following that average. But I guess that's why I'm not on CNBC nor on the floor of the exchange. :d

So I've included the 90 DMA on the chart below -- it's the green line. As you see it was the high yesterday and after a short trip above the line today the Dow fell back. But what's more compelling to me are the two doji (reversal candlesticks) which both challenged the downward sloping trendline and closed below. Also note the stochastic sell signal.

This sure sees like a good, low-risk spot to be short the Dow. You've got the trendline, the 90 DMA and the early July highs as resistance just above. Those areas are logical and relatively close spots to place stops.

Except for a quick head fake higher just after the open the S&P 500 and Nasdaq stayed in the range they've defined over the past two days. I was as impressed with what the sellers did today as I was with the bulls' resolve the last two days. But we've got to see if they can break the bottom of these ranges.

The Nasdaq crossed 2075 and fell back for the third day in a row. It made a bearish engulfing pattern today and is very close to short-term overbought. I think the odds favor a breakdown here...

The S&P had another 200-day moving average battle again today. This time the bears won by pushing the index back under that line. On Balance Volume still looks ominous to me and stochastic just gave a sell signal.

The small caps got hit hardest today as the Russell 2000 lost 1.26%. It tagged its 50-day moving average and reversed lower to close under the 10-day moving average. It also looks like it's building a huge descending triangle. That's usually bearish... look out below? We'll see.

I've changed the Russell's short-term trend back to down since it's under the 10-day moving average, even if just barely.

The buyers appear to still be determined to push the market higher. We're set to gap up right to yesterday's highs on the indices. I have no idea if they can push through what's been resistance for the last two days but this should make for an interesting first hour.

Gold is en fuego this morning as it pops above its 50-day moving average. So I'm keeping a close eye on GLD and some gold stocks.

Potential swing trades:

There's not much to say about today's action. The indices just consolidated last week's gains on lighter volume -- which is bullish action. Just about all the indices made NR7 bars today so those bars should (could) be good ones to trade off of, if NR7s are your thing.

The Nasdaq's sitting just under that important 2100 level.

The futures are down a little this morning so I guess we'll find out if Friday's low volume rally was for real. If we head higher during the day I'm expecting a struggle at the early July highs on the S&P 500.

Potential swing trades:

It was a struggle on Wednesday and Thursday bit the bulls finished the week strong on Friday. But while the price action was undeniably impressive volume was lacking. Yes, I know I always complain about the upside volume but I have to call 'em as I see 'em. I'm not alone though, IBD has issues with the volume too ($):

For the week, the Nasdaq advanced 3.7%, its biggest price gain since the first week of the year. The S&P 500 climbed 3.1%. The Dow pocketed a 3.2% gain.

But the market's day-to-day action calls those gains into doubt. The major indexes twice posted large gains in weak volume. Combine those two divergent sessions with Thursday's distribution day, and you get a market that's not showing much conviction.

The market fares best when price and volume move higher in tandem. When stocks grab big price gains in light volume, that's a sign that institutional investors aren't buying shares with any kind of intensity. Without that institutional support, the market may be vulnerable to a pullback.

The big picture remains the same. The market is still in a downtrend.

Still, we must respect the price action, low volume or not. The true test will be whether the S&P 500 and the Dow can close above the trading range they've been in since mid-May. They've yet to make higher-highs relative to the June highs.

The Naz finally got through that 2075 area but there's still plenty of overhead resistance. Breaking the blue trendline will be key for th bulls.

The S&P closed just below the June highs. The bears have to be very nervous right about now...

The Dow looks a lot like the S&P, perched just under resistance.

The Russell had a big day on Friday but is still well within its longer-term downtrend and the descending trianlge I pointed out on Thursday.

I'm doing another flip of the Russell's short-term trend.

The question on Qualcomm is do I think it's bottomed. I see nothing in the chart that leads me to believe QCOM has bottomed. But I guess it all depends on your time frame. In the short term it's promising that the stock was finally able to close above its 10-day moving average. It's down a lot in a short period of time and could easily get a sizeable bounce from here. If it does get that bounce I'd expect the top of the channel and/or the 50-day moving average to be resistance.

If you've read this site for more than a few weeks you know it's almost impossible for me to be bullish on any stock that below both its 50 and 200-day moving averages. I'd be looking to short rallies as long as it's under those moving averages.

I was asked what I thought was a good entry and target price for shorting the Dow Transportation Index. My answer, as if often the case is "it depends". One possible entry is at or near the top of its downtrend channel whch, at the moment, is around $81. If I were to try to catch the top of the channel I'd only short it if it showed some weakness after it's reached the top of the channel. A bearish candle or two would be great.

One thing that I don't like about that strategy is that the index would be back above the June lows and the 200-day moving average. I'd be worried about those levels becoming support. So if I wanted to hang on to this position for a while I'd wait for it to close under the 200-day moving average again and then short it. My stop would go just above $80.

As for targets -- I don't see much support on the way down. There's a bit around 75, some more around 73 and then what looks like pretty solid support just above 68.

The futures point to a higher open today but still well within the ranges of the last few days. I'm hoping that we can break the ranges today. Up or down, it doesn't matter to me, although I do see a lot of good looking short setups on the daily charts.

Potential swing trades:

Jerry wrote:

I wanted to know your option on GOOG. For the first time GOOG posted good earnings and the stock goes down... :-?

I'm not sure if this is the first time it dropped post-earnings but I could be wrong... I've been watching GOOG the last several days as it's tried to climb back above its 200-day moving average. It looks ready to break down to me but I've thought that before and it didn't happen. I still think that late March gap is begging to be filled. The chart looks really bad to me in this shorter time frame:

But when we zoom out a bit I see a huge symmetrical triangle. Based on this view I'd wait for Google to break (if & when) the bottom of the triangle before shorting it.

On a related note, can Google withstand the apparent pressure that's on many other internet companies / stocks?

I think the Yahoo Inc. (YHOO) knife catchers have shot their wads. The stock looks ready to roll over and retest 25. It'll probably be healthy for those lows to be retested in order to shake out the weak holders. Besides, I rarely trust V bottoms, especially after such a huge drop.

eBay Inc. (EBAY) looks like death:

and even Rackable Systems (Nasdaq: RACK) blew-up post-earning tonight. Their story is that they sell servers to Google and other big internet companies. Clearly all is not well in this space:

I'm glad Jason, who is short the Dow, requested a Dow chart because I meant to post it in tonight's recap. I happened to catch Art Cashin's spot on CNBC this afternoon and he mentioned some Dow technicals. Apparently folks on the floor of the NYSE are focused on the 90-day moving average. Why the 90-day? Beats me, I can't recall ever hearing of people following that average. But I guess that's why I'm not on CNBC nor on the floor of the exchange. :d

So I've included the 90 DMA on the chart below -- it's the green line. As you see it was the high yesterday and after a short trip above the line today the Dow fell back. But what's more compelling to me are the two doji (reversal candlesticks) which both challenged the downward sloping trendline and closed below. Also note the stochastic sell signal.

This sure sees like a good, low-risk spot to be short the Dow. You've got the trendline, the 90 DMA and the early July highs as resistance just above. Those areas are logical and relatively close spots to place stops.

Except for a quick head fake higher just after the open the S&P 500 and Nasdaq stayed in the range they've defined over the past two days. I was as impressed with what the sellers did today as I was with the bulls' resolve the last two days. But we've got to see if they can break the bottom of these ranges.

The Nasdaq crossed 2075 and fell back for the third day in a row. It made a bearish engulfing pattern today and is very close to short-term overbought. I think the odds favor a breakdown here...

The S&P had another 200-day moving average battle again today. This time the bears won by pushing the index back under that line. On Balance Volume still looks ominous to me and stochastic just gave a sell signal.

The small caps got hit hardest today as the Russell 2000 lost 1.26%. It tagged its 50-day moving average and reversed lower to close under the 10-day moving average. It also looks like it's building a huge descending triangle. That's usually bearish... look out below? We'll see.

I've changed the Russell's short-term trend back to down since it's under the 10-day moving average, even if just barely.

The buyers appear to still be determined to push the market higher. We're set to gap up right to yesterday's highs on the indices. I have no idea if they can push through what's been resistance for the last two days but this should make for an interesting first hour.

Gold is en fuego this morning as it pops above its 50-day moving average. So I'm keeping a close eye on GLD and some gold stocks.

Potential swing trades:

There's not much to say about today's action. The indices just consolidated last week's gains on lighter volume -- which is bullish action. Just about all the indices made NR7 bars today so those bars should (could) be good ones to trade off of, if NR7s are your thing.

The Nasdaq's sitting just under that important 2100 level.

The futures are down a little this morning so I guess we'll find out if Friday's low volume rally was for real. If we head higher during the day I'm expecting a struggle at the early July highs on the S&P 500.

Potential swing trades:

It was a struggle on Wednesday and Thursday bit the bulls finished the week strong on Friday. But while the price action was undeniably impressive volume was lacking. Yes, I know I always complain about the upside volume but I have to call 'em as I see 'em. I'm not alone though, IBD has issues with the volume too ($):

For the week, the Nasdaq advanced 3.7%, its biggest price gain since the first week of the year. The S&P 500 climbed 3.1%. The Dow pocketed a 3.2% gain.

But the market's day-to-day action calls those gains into doubt. The major indexes twice posted large gains in weak volume. Combine those two divergent sessions with Thursday's distribution day, and you get a market that's not showing much conviction.

The market fares best when price and volume move higher in tandem. When stocks grab big price gains in light volume, that's a sign that institutional investors aren't buying shares with any kind of intensity. Without that institutional support, the market may be vulnerable to a pullback.

The big picture remains the same. The market is still in a downtrend.

Still, we must respect the price action, low volume or not. The true test will be whether the S&P 500 and the Dow can close above the trading range they've been in since mid-May. They've yet to make higher-highs relative to the June highs.

The Naz finally got through that 2075 area but there's still plenty of overhead resistance. Breaking the blue trendline will be key for th bulls.

The S&P closed just below the June highs. The bears have to be very nervous right about now...

The Dow looks a lot like the S&P, perched just under resistance.

The Russell had a big day on Friday but is still well within its longer-term downtrend and the descending trianlge I pointed out on Thursday.

I'm doing another flip of the Russell's short-term trend.

The question on Qualcomm is do I think it's bottomed. I see nothing in the chart that leads me to believe QCOM has bottomed. But I guess it all depends on your time frame. In the short term it's promising that the stock was finally able to close above its 10-day moving average. It's down a lot in a short period of time and could easily get a sizeable bounce from here. If it does get that bounce I'd expect the top of the channel and/or the 50-day moving average to be resistance.

If you've read this site for more than a few weeks you know it's almost impossible for me to be bullish on any stock that below both its 50 and 200-day moving averages. I'd be looking to short rallies as long as it's under those moving averages.

I was asked what I thought was a good entry and target price for shorting the Dow Transportation Index. My answer, as if often the case is "it depends". One possible entry is at or near the top of its downtrend channel whch, at the moment, is around $81. If I were to try to catch the top of the channel I'd only short it if it showed some weakness after it's reached the top of the channel. A bearish candle or two would be great.

One thing that I don't like about that strategy is that the index would be back above the June lows and the 200-day moving average. I'd be worried about those levels becoming support. So if I wanted to hang on to this position for a while I'd wait for it to close under the 200-day moving average again and then short it. My stop would go just above $80.

As for targets -- I don't see much support on the way down. There's a bit around 75, some more around 73 and then what looks like pretty solid support just above 68.

The futures point to a higher open today but still well within the ranges of the last few days. I'm hoping that we can break the ranges today. Up or down, it doesn't matter to me, although I do see a lot of good looking short setups on the daily charts.

Potential swing trades:

Jerry wrote:

I wanted to know your option on GOOG. For the first time GOOG posted good earnings and the stock goes down... :-?

I'm not sure if this is the first time it dropped post-earnings but I could be wrong... I've been watching GOOG the last several days as it's tried to climb back above its 200-day moving average. It looks ready to break down to me but I've thought that before and it didn't happen. I still think that late March gap is begging to be filled. The chart looks really bad to me in this shorter time frame:

But when we zoom out a bit I see a huge symmetrical triangle. Based on this view I'd wait for Google to break (if & when) the bottom of the triangle before shorting it.

On a related note, can Google withstand the apparent pressure that's on many other internet companies / stocks?

I think the Yahoo Inc. (YHOO) knife catchers have shot their wads. The stock looks ready to roll over and retest 25. It'll probably be healthy for those lows to be retested in order to shake out the weak holders. Besides, I rarely trust V bottoms, especially after such a huge drop.

eBay Inc. (EBAY) looks like death:

and even Rackable Systems (Nasdaq: RACK) blew-up post-earning tonight. Their story is that they sell servers to Google and other big internet companies. Clearly all is not well in this space:

I'm glad Jason, who is short the Dow, requested a Dow chart because I meant to post it in tonight's recap. I happened to catch Art Cashin's spot on CNBC this afternoon and he mentioned some Dow technicals. Apparently folks on the floor of the NYSE are focused on the 90-day moving average. Why the 90-day? Beats me, I can't recall ever hearing of people following that average. But I guess that's why I'm not on CNBC nor on the floor of the exchange. :d

So I've included the 90 DMA on the chart below -- it's the green line. As you see it was the high yesterday and after a short trip above the line today the Dow fell back. But what's more compelling to me are the two doji (reversal candlesticks) which both challenged the downward sloping trendline and closed below. Also note the stochastic sell signal.

This sure sees like a good, low-risk spot to be short the Dow. You've got the trendline, the 90 DMA and the early July highs as resistance just above. Those areas are logical and relatively close spots to place stops.

Except for a quick head fake higher just after the open the S&P 500 and Nasdaq stayed in the range they've defined over the past two days. I was as impressed with what the sellers did today as I was with the bulls' resolve the last two days. But we've got to see if they can break the bottom of these ranges.

The Nasdaq crossed 2075 and fell back for the third day in a row. It made a bearish engulfing pattern today and is very close to short-term overbought. I think the odds favor a breakdown here...

The S&P had another 200-day moving average battle again today. This time the bears won by pushing the index back under that line. On Balance Volume still looks ominous to me and stochastic just gave a sell signal.

The small caps got hit hardest today as the Russell 2000 lost 1.26%. It tagged its 50-day moving average and reversed lower to close under the 10-day moving average. It also looks like it's building a huge descending triangle. That's usually bearish... look out below? We'll see.

I've changed the Russell's short-term trend back to down since it's under the 10-day moving average, even if just barely.

The buyers appear to still be determined to push the market higher. We're set to gap up right to yesterday's highs on the indices. I have no idea if they can push through what's been resistance for the last two days but this should make for an interesting first hour.

Gold is en fuego this morning as it pops above its 50-day moving average. So I'm keeping a close eye on GLD and some gold stocks.

Potential swing trades:

There's not much to say about today's action. The indices just consolidated last week's gains on lighter volume -- which is bullish action. Just about all the indices made NR7 bars today so those bars should (could) be good ones to trade off of, if NR7s are your thing.

The Nasdaq's sitting just under that important 2100 level.

The futures are down a little this morning so I guess we'll find out if Friday's low volume rally was for real. If we head higher during the day I'm expecting a struggle at the early July highs on the S&P 500.

Potential swing trades:

It was a struggle on Wednesday and Thursday bit the bulls finished the week strong on Friday. But while the price action was undeniably impressive volume was lacking. Yes, I know I always complain about the upside volume but I have to call 'em as I see 'em. I'm not alone though, IBD has issues with the volume too ($):

For the week, the Nasdaq advanced 3.7%, its biggest price gain since the first week of the year. The S&P 500 climbed 3.1%. The Dow pocketed a 3.2% gain.

But the market's day-to-day action calls those gains into doubt. The major indexes twice posted large gains in weak volume. Combine those two divergent sessions with Thursday's distribution day, and you get a market that's not showing much conviction.

The market fares best when price and volume move higher in tandem. When stocks grab big price gains in light volume, that's a sign that institutional investors aren't buying shares with any kind of intensity. Without that institutional support, the market may be vulnerable to a pullback.

The big picture remains the same. The market is still in a downtrend.

Still, we must respect the price action, low volume or not. The true test will be whether the S&P 500 and the Dow can close above the trading range they've been in since mid-May. They've yet to make higher-highs relative to the June highs.

The Naz finally got through that 2075 area but there's still plenty of overhead resistance. Breaking the blue trendline will be key for th bulls.

The S&P closed just below the June highs. The bears have to be very nervous right about now...

The Dow looks a lot like the S&P, perched just under resistance.

The Russell had a big day on Friday but is still well within its longer-term downtrend and the descending trianlge I pointed out on Thursday.

I'm doing another flip of the Russell's short-term trend.

The question on Qualcomm is do I think it's bottomed. I see nothing in the chart that leads me to believe QCOM has bottomed. But I guess it all depends on your time frame. In the short term it's promising that the stock was finally able to close above its 10-day moving average. It's down a lot in a short period of time and could easily get a sizeable bounce from here. If it does get that bounce I'd expect the top of the channel and/or the 50-day moving average to be resistance.

If you've read this site for more than a few weeks you know it's almost impossible for me to be bullish on any stock that below both its 50 and 200-day moving averages. I'd be looking to short rallies as long as it's under those moving averages.

I was asked what I thought was a good entry and target price for shorting the Dow Transportation Index. My answer, as if often the case is "it depends". One possible entry is at or near the top of its downtrend channel whch, at the moment, is around $81. If I were to try to catch the top of the channel I'd only short it if it showed some weakness after it's reached the top of the channel. A bearish candle or two would be great.

One thing that I don't like about that strategy is that the index would be back above the June lows and the 200-day moving average. I'd be worried about those levels becoming support. So if I wanted to hang on to this position for a while I'd wait for it to close under the 200-day moving average again and then short it. My stop would go just above $80.

As for targets -- I don't see much support on the way down. There's a bit around 75, some more around 73 and then what looks like pretty solid support just above 68.

The futures point to a higher open today but still well within the ranges of the last few days. I'm hoping that we can break the ranges today. Up or down, it doesn't matter to me, although I do see a lot of good looking short setups on the daily charts.

Potential swing trades: