Watchlist Saturday

Market Posture:

Dow: IT (intermediate term) Neutral to Bullish and ST (short term) Bullish. The Dow bounced back to test the bottom side of the Wedge. A drop in Oil to $112 - $112.50 probably pushes the Dow to the 11,700 - 11,750 area. A drop in Oil to $110 probably pushes the Dow to the 11,850 - 11,875 area. And a drop in Oil to $105 probably pushes the Dow to the 12,000 area. Volume wasn't very big on the bounce Friday, but the price action was still fairly strong. Short term support is 11,525 - 11,550, and then 11,300.

Here is a chart of the Dow:
(click on image to enlarge)

SPX: IT Neutral to Bullish and ST Bullish. The SPX bounced back to test the bottom side of the Wedge. A drop in Oil to $112 - $112.50 probably pushes the SPX to the 1,300 area. A drop in Oil to $110 probably pushes the SPX to the 1,305 - 1,310 area. And a drop in Oil to $105 probably pushes the SPX to the 1,320 area. Short term support is the 1,285 area, and then the 1,265 area.

Here is a chart of the SPX:
(click on image to enlarge)

Naz: IT Bullish and ST Bullish. The Naz bounced back to test the 200dma (and 10dma). A drop in Oil to $112 - $112.50 probably pushes the Naz to the 2,435 area. A drop in Oil to $110 probably pushes the Naz to the 2,440 - 2,443 area. And a drop in Oil to $105 probably pushes the Naz to the 2,473 area, and possibly as high as 2,483. Short term support is 2,390 - 2,400, and then 2,360.

Here is a chart of the Naz:
(click on image to enlarge)

Oil: IT Bearish to slightly Neutral and ST Bearish. Oil really reversed down hard after a one-day breakout that took it right to resistance in the $122.50 area. Bullish Speculators in oil still appear to be curled over in the dry heaves and pumping down the Maalox. The reversal on Friday was dramatic enough to make me speculate that oil has a high probability of testing the $112 - $112.50 area and a decent probability of dropping to new lows at $110. If Oil drops through $110 then there is a big vacuum all the way down to $105. The Dow jumped up to test the bottom side of theWedge as Oil dropped down to test the top side of the downtrending Channel. Oil has reacquired its strong correlation to the market.

Here is a chart of Oil:
(click on image to enlarge)

Here are a few interesting Bullish looking stocks or Bullish Movers:

NIHD, JCP, KSS, TGT, BBY, ENER, QQQQ, IWM, AMZN, MCD, BNI, ADSK, CL, ADBE, NOC, EL, (STP, SPWR, AET, SHLD, PRU, STI, KO, WLP, RL)

If Oil does a double head-fake and pops back up, which I think is unlikely, then I will build a bearish watchlist. If Oil sinks down into the $112 - $112.50 area on Monday or Tuesday, then the market should continue to move up for another day or two in the current bounce.

Personal Note: I will be posting fairly lightly this week and into Labor Day since it is my last week to get a lot of necessary things done before September is upon me. I will get the posts open, and I will do summaries, but I need to prioritize some important things this week so that I am ready for next month.