Market Trends

Last year, contrary to historical data that boasts that the first trading day of October has been up six out of the last nine years, the Dow closed down 34.02 points. In October 2005, that weakness pushed the Dow Jones Industrial Average below the 200-day Moving Average and to the bottom of the current three-year Dow channel.

Yesterday, the Dow went against history again, closing down eight points. Today's it's coming right down to the 10-day Moving Average, a spot that will show us that this rally isn't over… or that this was the top.

Tonight, we'll check in with what Harry Dent has to say about October, and look at some more historical data according to The Stock Trader's Almanac.

Material Profits

Leave it to an oil bull to see a bearish formation in oil…

I was reading a Barron's article this morning highlighting crude's movement, and saw a broadening ascending wedge formation. That's a bearish reversal pattern.

Of course the bull in me also sees a more hopeful pattern. We'll discuss both tonight.

Trading Tactics

Attention WaveStrength APEX members! Today, our longstanding “Oil Hedge” downside play on Patterson-UTI Energy (PTEN:NASDAQ) is hitting a new 52-week low, which means it's time to take our profits in the PTEN November 25 puts (NZQ WE). Keep an eye out for this trade this morning.

In terms of the other market news, oil is once again dropping under $60 a barrel, which is having a devastating effect on virtually every oil-related stock today. If oil moves down to around $58 once again, it may be another buying opportunity!

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