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Intraday Market Notes: DCM Exhaustion Gap -- October 26

4:00 pm ET: The bulls and bears continue their combat and it appears as if the bulls will end the day with a TKO. The bears, however, are still ahead for the week with the S&P shedding 1.4%. Today, the Dow Transports (DTX) are up while the volatility index (VIX) is down--both bullish indications. The question now is if we'll actually see any follow through. I wouldn't bet heavily on it because of the uncertainty surrounding the election and the impending fiscal cliff.

There's just not a lot going on in the market right now. Commodities have been lackluster, to say the least. Two things worthy of note is that the sugar etf (NYSEARCA:SGG) is hitting a new yearly low and the diesel/heating oil etf (NYSEARCA:UHN) is rebounding off its spectacular bottoming tail put in two days ago. Since then it's jumped 1.7% which is a big move in this issue.

Trade note: Exhaustion gap seen in DCM
NTT Docomo (NYSE:DCM) appears to have put in an exhaustion gap today. (An exhaustion gap appears as a significant gap down with a bottoming tail on heavy volume--see the chart above) Swing traders may wish to put this stock on their watchlists. If it moves up on Monday, a long position may be entered. These types of trades can last for a while but many have a tendency to rebound for a few days to a couple of weeks before turning around and heading right back down. Trades of this nature (like most trades) work better if the market moves with it. This is relatively speculative play so please use smaller positions. The stock does have options but they are thinly traded. It's interesting to note that 172 contracts of the November 15 put changed hands today at what appears to be the bid price. What this means is that the contracts were likely sold which, in and of itself, is a bullish position though it could also be a part of a calendar spread strategy and there's no way for me to tell.

Have a nice weekend!

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Stocks: SGG, UHN, DCM