A broad-based rally on Wednesday turned out to be nothing more than a trap, as the market reversed course on Thursday and selling gained momentum on Friday. Most every stock went down and some went down hard, and it looks like the market wants to move still lower from here.

To top it all off, the FOMC will likely raise interest rates on Wednesday and there is a looming possibility of a Government shutdown. This is not the stuff of healthy markets and will likely provide the impetus for more selling this week.

Let’s start tonight with a look at the indexes. First up are two weekly charts and then one daily chart.

My short-term oscillator stands at -41 which is barely below the oversold reading of -40, but it can often go much deeper down before the market can stage a nice snapback.

Now let’s review some momentum stocks that are going in the wrong direction.

I look forward to seeing you in the chat room on Monday and then back here Monday night for an update on the market.

Daniel J. Zanger