Markets Looking for a November Bounce

Futures and the DAX are marginally positive.  The market condition scans are neutral with no strong bias.  The market bias indicators are showing a stronger statistical bias for a bounce.  Given this, a positive open is suggested for the markets.  However, it appears that the price action for the day will more likely be choppy and indecisive.  Earnings reports this quarter have been mostly mixed and flat with the increases coming more from cost-cutting efforts rather than growing revenues.  Although the US GDP was positive, this was due to the stimulus spending and programs such as the “Cash for Clunkers”.  The challenge for the US is to see if business can recover and stimulate the economy instead of Government. 

Institutional investors remain cautious, moving to the sidelines.  Once again, understanding the fundamentals of a company and being able to read the charts will provide investors with opportunities.  The overall markets may slip back into a trading range again.  All of the indexes with the exception of the DOW have closed below their 50 day moving averages on Friday.  Due to the heavy sell-off on Friday, we will likely see a bounce today, but as indicated earlier, there does not appear to be any strong catalyst to push the markets back up with any strength. 

Index	Change	%Change	Level	Phase
TSX	-164.47	-1.49%	10910.75	Warning
DJIA	-249.85	-2.51%	9712.73	Bullish
Nasdaq	-52.44	-2.50%	2045.11	Warning
SP 500	-29.92	-2.81%	1036.19	Warning
Russell 2000	-17.45	-3.01%	562.77	Warning
NYSE	-215.86	-3.10%	6739.45	Warning

Source: Telechart

Short Term market outlook:

Bias: Scans showing a slightly negative bias

Energy: weak

 Primary Trend: sideways

Sector	Phase
Consumer Staples	Bullish
Healthcare	Warning
Technology	Warning
Utilities	Warning
Energy	Bullish
Financials	Warning
Industrials	Warning
Materials	Warning
Consumer Discretionary	Warning

Source: Telechart