Oct. 23, 2009 Mid day market update.

I was looking at the Dow and the Intraday pattern as the market went up initially but then has pulled back. Looking at the chart above, you can clearly see a "w" pattern. Notice the second leg of the "w" is lower than the first leg. This usually means the movement will be lower yet. Watch to see if the market closes close to the low's of the day at 9949 as it would then close lower than it did the end of last week. And right now with 2 hours left before the market closes there are two things to pay attention to. First is the Volume. It look ahead of yesterday's volume. Secondly, look at the dollar. Right now it is up. If it stays up the market will close lower. If the dollar appreciation moves up more steeply in the final hour, from where it is now, there will be a selloff of equities.

UPDATE 12:45pm PST

With only 15 minutes to go in today's market we were at the lows of the day and the dollar gain has held. The "W" pattern, above did predict this move lower from the chart above and as you can see from the chart below it did drop lower. That is how to read a "w" pattern on any chart. You can see the "W" as I have outlined it with red lines below. The 1st Black line connected to the "W" pattern shows the slant of the pattern so that the second leg is lower than the first. The 2nd Black line I drew was to show that the pattern did show a lower point was actually reached as predicted by the chart. If you are still confused get a book on Technical Analysis Explained by Martin Pring. It's one of the best out there. It can be quite useful to help in trading.

On the earnings front, Honeywell International, symbol HON, reported it beat earnings estimates, but it too had less Revenue than last year at this time.