Market Trends
Look at any daily chart of the Dow Jones Industrial Average and you'll see the current pennant formation: four sloping candles (including today's price action) that are “doji-like” right above 11,800.

Here's the price history of the last two days of trading on the Dow:

October 6: Down 15.28 points. Close at 11,850.21.

October 9: Up 8.25 points. Close at 11,857.81.

Momentum has dropped substantially, from 342.11 two days ago to a current value of 184.98. Again, RSI, or Relative Strength, is still overbought.

It is imperative that the Dow drops from these levels, at least in a slight correction. The only question is, when will it roll over?

Material Profits
A report this morning on CNN.com notes that native Alaskan villages are refusing oil from Chavez.

That's not so big a deal in and of itself, but when you add the word “free” and compare it to some of the nation's highest heating oil prices (more than $5 a gallon, according to the report), it becomes an entirely different story.

One thing the article mentioned… “Nelson Lagoon residents pay more than $5 a gallon for oil - or at least $300 a month per household - to heat their homes along the wind-swept coast of the Bering Sea, where temperatures can dip to minus-15.”

The key phrase that caught my eye? You guessed it: wind-swept.

Trading Tactics
In her column, Ann asks the question that's been circulating in everyone's mind since the end of September: “When will the Dow roll over?”

As we all know, stocks do not move in just one direction, so I personally feel that a sell-off will come any day now. Perhaps Q3 earnings season will be the catalyst for the drop? We'll begin to know after the market close today, when Alcoa (AA:NYSE), the maker of everything aluminum (including Reynolds Wrap) releases their quarterly results. Since the price of aluminum has dropped sharply since spring, could disappointing results from AA begin the next downturn? As I just said, we'll know more tonight!

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