BULLS ARE STILL FIGHTING

The markets were down for much of the day...in almost every sector. I've noticed that during some of the recent sell offs, the market tends to rally during the last hour of the day. It seems that buyers...so anxious for a pull back of some kind...jump in and start buying at the end of the day...especially when they don't see a big reason for the sell off to continue. Seeing this trend, I bought some calls about a half hour before the market closed when the DOW started to rally off of its low. The DOW was down about 138 points before this end-of-day rally began. By the close, the DOW was only down 59 points! That was about an 80 point rally for my call options...in 30 minutes! I'll take that. If the market gaps up and takes off tomorrow, it will be a very nice trade. If the market moves up a little and dies...or if it moves down a little and dies, I will still have a good trade. The market would need to sell of and move down 80 points for me to break even. I kind of like those probabilities. The major averages found some support on today's pullback. The key is if those support levels hold. The VIX spiked up...just like I told you it could...after forming that bullish ABC pattern. I'm really looking at the Nasdaq market (NDX or QQQQ) for some signs of the strength of this recent trend. The Nasdaq has a much stronger uptrend and had its bottom last November rather than March (like the DOW and S&P 500). It seems to be the real leader of this rally. When we start to see the QQQQ or NDX start to break below key support levels, look out! Just one stock came up on my scan tonight (not enough of a pull back I guess). It was GERN (it is a Biotech stock). If Energy stocks sell off for one more day, you will probably see a ton of patterns being mentioned. Watch the Coal stocks and the Agricultural Chemical stocks. They didn't participate much in the last big energy rally so it could now be their turn in the front of the line. Let's see what you can do. Also...keep an eye on the financials...again. They have been "out of favor" for several days. They seem to be at a critical area (for most of the patterns). Almost all have nice looking bullish ABC patterns which could signal another rally...but many are also sitting right at their 50 day moving averages. If these support areas break, the financials might continue to sell off. What a great area to look for a trading opportunity!