Archive | March, 2009

Wk13: Market Recap

30 Mar

Last week the S&P continued its rally right up to the prior 820 support area. The internals favored the bulls with an especially strong Monday and A/D Lines of +1000 the entire week. If we look at week 13, we can see a long shadow on the weekly bar. The fact that the bulls were able to break out over that bar in week 14 is quite bullish.

Wk14: Market Forecast

30 Mar

In the week ahead make note of these important economic announcements.
· Tues: Consumer Confidence 10:00 AM ET
· Weds: ISM Manufacturing Index 10:00 AM ET
· Weds: Pending Home Sales Index 10:00 AM ET
· Thurs: Jobless Claims 8:30 AM ET
· Fri: Employment Situation 8:30 AM ET
· Fri: Ben Bernanke Speaks 12:00 PM ET

Our next target level is the S&P 875 area with a support level at 805. The dailies are forming a bull flag so any break over $833 should constitute a move higher, as always watch for confirming internals, increasing volume, and a retraction in the VIX to confirm a breakout move.

Wk14: Weekly Watchlist

30 Mar

Long:

CPSI – Pulled back to support making for a great entry point.
CCK – An ascending triangle is forming on CCK. We typically trade a move like this in one of three ways, an anticipatory trade here, buy the breakout, or buy the retest of support.
CLB, MOS and RCII can be traded in the same way as CCK.

GMCR – Very nice triangle consolidation pattern forming. A break in the direction of the trend should result, which in this case is up.
LINC – A buy over the hammer at $17.50 with a stop under the low at $16.50 allows for an easily managed trade.
RIG – A bounce off support here provides a great entry.
Short:
HMSY – Bear flag pattern forming. Notice how the current rally is on declining volume and has not retraced more than 50% of the “pole.” An anticipatory entry or an entry on the breakdown of $29.50.

SIGM – An easily managed trade with an entry below the low of the inverted hammer and a stop above its high, the low volume on the prior rally adds confirmation that the stock is likely to decline more.

More Shorts:
ESRX, HBC, HME, K

Wk13: Watchlist Update

24 Mar

Monday got off to a great start with news of February Existing Home Sales rising 5.1%, the largest increase since July 2003. We added a few more longs to the watchlist and as we said before, since the market is strong watch for relatively weak stocks to short.
Long:
CTRP – Bull Flag: Use the top of the consolidation for entry.
JCOM – Triangle: Enter on the breakout or the retest.
MOS – Ascending Triangle: This can be an anticipatory entry now or wait for a breakout of 46.
RCII – Triangle: Watch for a breakout.
WFR – This stock broke out today, but watch for a retest for entry.
Short:
SIGM – Head and Shoulders: Watch for a retest

Wk12: Market Recap

22 Mar

The four major indices (S&P, Dow, NASDAQ and Russell) finished up slightly on the week, but not before touching the S&P 800 level we talked about. The pullback late in the week feels weaker than in weeks past, the 50-MA acted as a resistance level while the 10-Day MA is acting as support.

Following a withstanding rally in week 11, week 12 economic news hinted that confidence may be instilled in the markets sooner than previously thought.
The breadth ratios on the advancing days (Tuesday and Wednesday) we’re relatively stronger than the declining days (Thursday and Friday). Monday’s action was mixed after Ben Bernanke said it’s possible the recession may come to an end this year on a CBS Television interview Sunday night. With many investors and Hedge Fund Managers sitting on the sidelines through these uncertain market conditions, bargain hunters are back on the prowl.

We usually see stocks rally into Option Expiry (the third Friday of every month) and this cycle was no different. This particular expiry is know as a Triple Witching, meaning contracts for stock index futures, stock index options, and stock options all expire on the same day only occurring in the months of March, June, September and December.

Wk13: Market Forecast

22 Mar

In the week ahead make note of these important economic announcements.
· Mon: Existing Home Sales 10:00 AM ET
· Weds: Durable Goods Orders 8:30 AM ET
· Weds: New Home Sales 10:00 AM ET
· Thurs: GDP 8:30 AM ET
· Thurs: Jobless Claims 8:30 AM ET
· Fri: Personal Income and Outlays 8:30 AM ET
· Fri: Consumer Sentiment 9:55AM ET

Treasury Secretary Timothy Geithner will hold a briefing at 8:45 ET on Monday in efforts to stabilize the financial system. He is also delivering a speech on financial regulation reform before House Financial Services Committee in Washington of Thursday 10:00 AM ET, this could act as market mover as well.

We will be looking at the S&P 750 level as support and the 800 level as resistance. A pullback would be expected and would be nice to see as this would act as a breather and any move sideways would form a stronger support level for future retests.

Wk13: Stocks to Watch

22 Mar

While we found more bearish signals over the weekend, many of these weak stocks are holding at their 10 and 20-Day Moving Averages, and remember, a stock will be most likely to act in the path of least resistance. Easing into the week and staying Delta Neutral will help keep your portfolio balanced until a clear trend is established.

Long:

AAPL
AZO
NFLX

Short:
CHTT
FAST
IART
PLL
WAT
WWW

More Shorts (Caution: 10/20-Day MA’s turning higher):
AEE
AVY
BKH
CLH
NATI
PAYX
SWX
VVC
WCN

Wk12: Watchlist Recap

22 Mar

The longs overpowered the shorts last week making some nice gains. Click to see last weeks watchlist in detail.
ARO & XLNX – Broke out and is retesting the old resistance (which is now new support)
BR – Holding sideways
GEOY – Fell back to the prior swing low where a new entry was established over the high of 3/16, earnings are coming up so be warned
SVR – 7 up days in a row and climbing
ADBE – The stock moved higher on earnings news, the stock never broke to the downside, waiting for confirmation helps keep up out of to-be losing trades
BBT – Moving sideways, slowly breaking it’s down trend, no trade here
CALM, ESV & DBD All moved higher before we could place a trade to the short side
CBU – CBU fell nicely on Monday, but began climbing slowly during the week finishing right where it started. A stop above the prior swing high would have kept you in the trade, but with tighter stop over the current swing high, you may have been stopped out. There’s nothing wrong with re entering a trade after being stopped out if the entry signal arises. Sticking to your trade plan is ALWAYS the most important thing so getting stopped out should be looked at as a success when this is the case.