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As one of the big money-center banks, JP Morgan (JPM) clearly benefited from the coordinated central bank action on Wednesday. The chart below shows JPM bouncing off support with a big gap on big volume. JPM closed near the high of the day. The gap is bullish as long as it holds. A move back below 29 would call for a reassessment.


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The Airline ETF (FAA) and Spot Light Crude ($WTIC) were moving in the same direction from July to mid October, but went their separate was in late October. Spot Light Crude surged above 100 in November as the Airline ETF tested its early October low. Airlines are clearly not happy with rising oil prices as the ETF underperforms the broader market.


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The indicator window shows the US Gasoline Fund (UGA) peaking in mid October (blue) and moving lower the last six weeks, while the US Oil Fund (USO) continued moving higher (red). Something needs to give here. Notice that UGA formed a large descending triangle the last 5-6 months and a break below 45 would signal a continuation lower.


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Wal-Mart (WMT) remains in an uptrend overall, but may be poised for a correction as Black Friday comes and goes. The stock declined sharply in mid November and then consolidated the last 6-7 days. Watch for a break from this consolidation to trigger the next signal.


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So, how significant is the Dow's recent loss?  If you understand the power of P&F charting, you'll get your answer from this chart:

For those that are new to P&F charts, remember that they automatically filter out insignificant price moves.  This is misleading to people who are used to looking at bar/candlestick charts and mentally filtering out outlying data.  Everything on a P&F chart is significant.  

In addition, every column on a P&F chart represents a slanted trend on a regular bar chart and therefore the automatic red and blue trendlines on a P&F chart are trends of trends - highly significant.  More on P&F charting

OK - enough background - the bottom line is that if $INDU breaks the current blue uptrend line, it will be technically significant.  11300 is the number (11250 if you want to be conservative).

After forming a rising wedge in October, the German DAX reversed in the key retracement zone and broke support with a sharp decline below 5700 the last few days. These are clearly bearish developments. Broken support in the 5800 area turns first resistance, which is confirmed by the trendline extending down from late October. Allowing for a little buffer, I would set key resistance at 6000.


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There have been few hiding places over the last five trading days. The major indices are down sharply and all sectors are also down. As the Sector Market Carpet shows, stocks in the utilities and consumer staples sectors were down the least, while technology and energy stocks were down the least. The red box to the right shows the top five gainers and losers.


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The CandleGlance chart for the 30 Dow stocks provides snapshot of the current day’s action. As of 12:30ET on Monday, all 30 components were down with most down over 2%. This is clearly a broad-based decline that is affecting all sectors. The screenshot below shows the four of the thirty stocks.


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After a sharp decline and gap down, Procter & Gamble (PG) moved into a tight trading range the last three weeks. The pink lines show a pennant or small triangle taking shape. The blue lines show Bollinger Bands (10,2) narrowing as well. A break below the lower band would be bearish, while a break below the upper band would be bullish.


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The Market Carpet is a sea of red on Thursday with the technology and finance sectors leading the way lower. Notice the numbers in the top box of each sector. The average tech stock is down 2.8% and the average finance stock is down 2.2% (just before the close).

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