Despite a round of better-than-expected economic news, stock market indices negatively reversed, from up to down, yesterday and ended with losses. Profit-taking due to the end of the month, the quarter, and fiscal year for some mutual funds combined with a failed intraday breakout after “resistance” stood its ground and an overbought situation [please refer to the chart titled: “Percentage of NYSE stocks above their 10 week (50-day) moving average”] helped aid yesterday’s negative reversal. After being up 115 points at the open, the DJIA ended lower by 47 points; the NASDAQ recorded a similar reversal and closed down eight points. The S&P 500 and the DJIA both enjoyed their best “September” since 1939, rallying 9% and 8%, respectively. The NASDAQ surged 12% last month.

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Weekly Technical Commentary by Art Huprich
More Churning
Friday Morning 10/01
Despite a round of better-than-expected economic news, stock market indices negatively
reversed, from up to down, yesterday and ended with losses. Profit-taking due to the end of the
month, the quarter, and fiscal year for some mutual funds combined with a failed intraday
breakout after “resistance” stood its ground and an overbought situation [please refer to the chart
titled: “Percentage of NYSE stocks above their 10 week (50-day) moving average”] helped aid
yesterday’s negative reversal. After being up 115 points at the open, the DJIA ended lower by 47
points; the NASDAQ recorded a similar reversal and closed down eight points. The S&P 500
and the DJIA both enjoyed their best “September” since 1939, rallying 9% and 8%, respectively.
The NASDAQ surged 12% last month.
On the NYSE, volume expanded to 1.28 billion shares. While I don’t want to try and rationalize
why volume expanded and it is negative that volume expanded on a day in which the major
indices negatively reversed, it may be worth noting that yesterday’s volume reading may be
partially due to end of the month and quarter shenanigans. Aided by some selective strength in
the mid-cap universe, there were 41 net advancing issues, positive. New 52-week highs
expanded to 249, also positive but still well below the important levels listed yesterday.
Within the context of a bullish short-term uptrend, I expect stock market indices to churn –
struggle – and remain choppy until either 1) resistance, defined by 9/30/10 intraday highs is

2. violated (= higher prices) or 2) intraday support lows from 9/23/10 is violated on a closing basis
(= lower prices).
( More on select commodities: My discussion on August 6 concerning the parabolic move in
Wheat proved timely as the grain has not made any upward progress since then and actually
broken down. Wheat has completed at least a near-term top. Following a similar parabolic move,
Corn (not shown below) has also completed a near-term top. I believe both commodities are
components of the PowerShares DB Agriculture Fund (DBA) exchange-traded fund (please
check with Closed-End Funds Research for confirmation). If that is the case, DBA should come
under some pressure due to weakness of these two components. You can view these
commodities on the website futures.tradingcharts.com.
( On a near-term basis, Crude Oil, which has been exhibiting a triangle consolidation pattern,
appears to be emerging up and out of the pattern. Next resistance exists at $82.97 followed by
the $86 to $87 area. In light of some positive momentum readings, defined by MACD, I
wouldn’t be surprised to see the upper resistance level tested, over time.
Positive (actively managed accounts only): Within the context of a short-and intermediate-term

3. uptrend, Oracle (ORCL/$26.85/Outperform) is developing a “Flag” consolidation pattern. The
pattern will be completed by a violation of short-term resistance at $27.62. Trading accounts
should buy the stock if resistance is violated and immediately use a move below $26.64 as a
stop-loss point. Based on the account’s tolerance for risk, please use intraday or the closing price
in order to discern the breakout point.