IT KEEPS GOING...AND GOING...AND GOING

The markets are trying hard to hold onto this rally. We hit some resistance in the DOW (around DOW 7,900) and pulled back. The S&P 500 held its support around 800. All three averages are above their 50 day moving average. The buyers that came in late in the day are showing that traders and investors aren't afraid to buy right here. Having said that, I still feel like we will soon sell off a bit. If we break above 7,900 on the DOW, we could move up much further before correcting. The next major resistance on the S&P 500 is around 875. Watch the financial stocks. They seem to be leading the market right now. If they start to sell off and move back down below their 50 day moving averages, we could see the market follow. If we do start a correction in the markets, there are some nice possible bearish ABC patterns on some of the railroad stocks. I particularly like CSX, BNI, and NSC (in that order). They are bumping into some horizontal support/resistance as well as their 50 day moving averages. They are all right at their 50 day moving averages and their 50 day moving averages are moving downward. If the market breaks higher, you could look at AAPL (I really like the short term possible bullish pattern), HES, DNR, ATML, and MU for some possible bullish moves.