Market Lows: Breakdown Or Base?

As you likely know, the Dow is trading right around its bear market low set November 20^th and the S&P is sitting near the psychologically important 800 level.

Some investors see the glass as half full while others say it's half empty. "There’s a lot of pessimism in the market and that alone could be enough to make me dip a toe," muses FM trader Pete Najarian. In other words all the bearish sentiment in the market has him thinking that we could be near some kind of turning point.

But what do the charts say? For insights we turn to technical analyst Dan Fitzpatrick, president of Stockmarketmentor.com. Following are his main remarks.

S&P 500

“If you extend the 200-day moving average it’s not until summer when the S&P 500 intersects the moving average on the way up." In other words the next leg higher in the S&P probably won't come until summer. "Let the beat go on without you.”

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Nasdaq

“The Nasdaq is 12% above its November low while the Dow is knocking on the door of its bear market low." Fitzpatrick finds that impressive. "If you want to be in stocks, I’d be in tech.”

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Crude Oil

“Gold and oil are decoupling when typically they trade together." In case you're wondering, they trade together because they're both dollar based commodities. "Assuming the relationship normalizes we should see an uptick in oil."

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Petrobras (PBR)

“For the trend in this chart to continue higher there needs to be an uptick in oil,” explains Fitzpatrick.

Tim Seymour tells the traders he’s long PBR because “it’s the best oil story for production growth.”

To see Fitzpatrick’s complete analysis please watch the video.

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Trader disclosure: On Feb. 18th, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Seymour Owns (BAC), (EEM), (EEM), (PBR), (XOM), (FXI); Seymour's Firm Owns (VIP); Terranova Owns (FCX), (XBI), (AMGN), (KCE), (DIS); Terranova Owns (IBM) & (IBM) Call Spread; Terranova Owns (AMGN) Puts; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Najarian Owns (CHK) Put Spread, Najarian Owns (CBS) Calls, Najarian Owns (EEM) Call Spread, Najarian Owns (FCX) & (FCX) Calls, Najarian Owns (GS) Calls, Najarian Owns (GDX) Call Spread, Najarian Owns (GLD) Call Spread, Najarian Owns (HPQ) Spread, Najarian Owns (MSFT) & (MSFT) Short Calls, Najarian Owns (MS) & (MS) Short Calls, Najarian Owns (MOS) Call Spread, Najarian Owns (STI) Call Spread, Najarian Owns (WFC) & (WFC) Calls

Fitzpatrick Owns Gold