Bipolar Markets

Boy the markets are all over the road recently. They gave back all of yesterdays gains and then some today. Breadth was extremely negative as well. The Nasdaq is very close to breaking down which should end up dragging the rest of the market with it.

Here is a chart of the QQQQ showing a breakout failure and the subsequent fall back into the base. If it falls out of this triangle then the move down could be very swift.

NASDAQ 100 Trust Shares (ETF) (Public, NASDAQ:QQQQ)


I think I will stay away long and short from most of the general market, however, it looks like the oil service stocks are starting to pull back again. While I think oil will be a decent trade soon, I think this move down can be played.


Oceaneering International (Public, NYSE:OII)
First up is OII. It has been rising like most of the oil stocks in a bear pennant. The target for these types of pennants is a measurement of the previous leg added to the point where it falls out of the pennant. Conservative traders can half that.


Frontier Oil Corporation (Public, NYSE:FTO)
FTO looks like it already fell out of it's pennant.


Dril-Quip, Inc. (Public, NYSE:DRQ)
And yet another one. This is actually more of a flag as the lines are parallel. The target is measured the same way as a pennant.


eFuture Information Technology Inc. (Public, NASDAQ:EFUT)
EFUT is one of the only bullish stocks I saw. They closed above this descending trendline for the first time. This is a wild one, so be careful.


Hopefully tomorrow sheds some light on the next move for the general markets.

Good Luck,


DT