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October 20, 2005
Market Musings
Stocks opened weak and closed strong on good volume. The end result is a number of bullish engulfing patterns. OEX formed a big bullish engulfing below broken support. This broken support level now turns into resistance and a move above 557 would confirm the bullish engulfing. Without confirmation, this is a one-day wonder and part of a mere consolidation.
The Nasdaq 100 moved back above broken support with a long white candlestick.
The NYSE Composite finished at broken support and needs some follow through.
The Russell 2000 ($RUT) remains below broken support and is lagging.
Among the styles, growth outperformed value yesterday.
The Consumer Discretionary SPDR (XLY) formed a big bullish engulfing, but follow through is required for confirmation.
The Energy SPDR (XLE) has a falling wedge working the last few weeks and a move above 50 would be bullish.
The Finance SPDR (XLF) held Friday's gap and followed through with a big advance yesterday.
The B2B Internet HOLDRS (BHH) formed a big outside reversal and a move above 2.35 would be bullish.
The Internet HOLDRS (HHH) closed at its highest level since January and remains the strongest tech group. However, after hours weakness in EBAY could weigh.
The Semiconductor HOLDRS (SMH) opened weak and closed strong. However, the stock still finished in the minus column and this key group continues to lag.
The StreetTracks Gold ETF (GLD) formed a bearish island reversal over the last four days. Mind the last gap!
***Stocks***
Corrections Corp of America (CXW) has already recouped its October losses and looks poised to break resistance at 40.
Looks like a breakaway gap on high volume for PJC.
SEI Investments broke falling wedge resistance with a high volume surge.
Abbott Labs (ABT) is moving higher on good volume the last few weeks.
CCI gapped down and stayed down with above average volume on Wednesday.
XRX broke key support at 13 on good volume.
HSY gapped up on big volume and held the gap with another good move.
YUM is pushing resistance at 51 with above average volume.
AL broke the August trendline with a high volume advance in October.
Posted by Arthur B. Hill at October 20, 2005 09:35 AM