Good Morning, Traders. Choppy, sloppy, no advance, still home on the range, so to speak. Let's check the statistics first: Dow up 59, S&P plus 8, and Nasdaq Composite also plus 8. However...$SOX index down a half of one percent from open and erased all gains of previous day. Breadth closing just under 2:1 positive on NYSE and negative by a hair on Nasdaq which was relatively weaker all day, yesterday. Trins mixed too with advance decline lines nothing to write home about (+544 NYSE, +86 Nasdaq). Overall volume was rather light (negative on an advancing day) with total turnover coming down by 13% on the NYSE as compared with Monday. Internets were strong off of Google's strength. Google broke out over the highs of the three dojis and closed 14 points higher pushing the $GIN (Goldman Sachs Internet Index) ahead by 2.19% from the open, enough to grab the top spot on the ShadowTrader Core Sector List. More proof that this market is shaky and should be treated with care and any bullish sentiment here is "cautious" at best. If internets are fighting it out with semis, thats not a recipe for a strong Nasdaq nor the rest of the market since everything is connected.

In Tuesday's commentary, we talked about an inverted daily hammer on the Dow which closed right at trendline support. Be aware that any move over the top of that hammer shadow should bring some buyers into the Dow. When a pattern fails, those who were playing the pattern are forced to cover and also possibly reverse their position causing added momentum in the opposite direction. So at this juncture, keep that in mind. We maintain that a move below Monday's low brings the Dow to 11,000. For now, holding pattern unless one of these events occurs. Overall bias remains upward, near-term bias sideways to down.

Focus List

RDEN - Elizabeth Arden, Inc.
Industry - Consumer Durables (Personal)
Side - Short
Trigger - 23.08
Stop - 23.65
Target - 21.89
Timeframe - 3 days to 2 weeks

Notes

• Two consecutive inverted hammers is relatively rare pattern
• Volume has contracted as stock has rallied recently
• Tops of hammers correspond with prior swing lows which should be new resistance now
• Target is to retest 200ma (blue)

Peter Reznicek is the Chief Equity Strategist and a principal of the Prana Fund, a domestic hedge fund, and ShadowTrader, a subsidiary of thinkorswim which provides coaching and education to its clients on both intraday and swing trading of equities. For a free trial to the full version of The Big Picture or to learn about ShadowTrader's other services, visit shadowtrader.net or send an email to preznicek@shadowtrader.net.

Disclaimer
The risk of loss in the trading of any securities products can be substantial. The strategies employed here are active trading strategies therefore you should carefully consider whether such trading is suitable for you in light of your personal investment objectives and financial resources.