The Right Edge

2010-07-25T16:51:00.000-04:00

I’m sorry I haven’t been doing much posting lately, but I have been doing some other work and it has been taking up all of my time. Besides the market has been stuck in a range and the action has been pretty choppy. Until it gets resolved we are stuck with this choppy action.

Last week I wrote that we have a minor range in the SPY of $110/106. Both of those levels were tested and the question is where we go from here. My belief is higher, because we have finally closed above the 50 day MA (108.66) but the SPY has got a lot of work to do to get above the 200 day(111.54) & 150 day(112.40) MA’s.

We are deep in the heart of earnings season and the numbers have been well received for the most part but be aware of when companies are going to report especially if you are going to swing anything. The economic calendar is light tomorrow (new home sales at 10:00) so I don’t think it is really going to be a factor. What I will be watching is the dollar index ($DXY) to see if it continues to hold up above the 150 day MA (82.06) or if it rolls over and begins a test of the 200 day MA (80.50). If that happens we may get a nice bid to the market. The other market tells for me will be USO & SMH. There aren’t any clean levels on them but they both have been consolidating in a range since May and look like they may want to try and break out this week. I will be watching the $36 level on USO and the $29 level on SMH. Hopefully the action in these two ETF’s will give us a sense of where the broader market may be headed. Can they break out of this range or do they fail at the top of the range. Only time will tell.

The following ideas maybe actionable early this week, but watch for failed breakouts and break downs this has been a very choppy range bound market.

acm 25 long

aro 31 long

lstr 42 long

cmi 78 long

cmp 78 long

epd 29 long

fslr 140 long

sid 17 long

uhs 34.02 reversal/support buy on 200 day MA

wmt 53ish reversal short on 150+200 day MA

cf 85.32 reversal short on 200 day MA

2010-07-19T20:05:00.001-04:00

The inability of the SPY to break out above the $110 level last week and then Friday’s brutal selloff really took some life out of the market. It is very choppy out there right and I have only a hand full of alerts for tomorrow. Sorry they are either there or they are not.

It looks like there is range forming in the SPY $110/$106, it is minor but keep an eye on it.

The following ideas maybe actionable tomorrow, but don’t press.

aapl 231.74 reversal/support buy on 150 day MA

deck 42.42 reversal/support buy on 150 day MA

prgo 52.63 reversal/support buy on 150 day MA

pxd 55.94 reversal/support buy on 150 day MA

rost 51.2 reversal/support buy on 150 day MA

rah 54 short

2010-07-14T19:41:00.002-04:00

The SPY continues to be very choppy around the 50 day MA, but it is hold the gap up and that is good. Consolidating the move for a couple of days before moving higher is nice healthy action. With that said I saw a couple of things today make me think a gap fill back down to the 20 day MA/108 on the SPY is not out of the question.

1. There was a nice move up in LQD on very heavy volume. (LQD is the ETF for the investment grade bond index and represents an appetite for less risk.)

2. SMH put in an ugly red candle right at resistance and it is going to take some work to get through that.

I wrote earlier in the week about using C & GS as tells for where this market may be headed. C triggered and has basically done nothing while GS is still hanging around the top of the range. It may be easier to watch the $15 level on XLF; it is a clean level and coincides with the 150 day MA. JPM reports Thursday and should help resolve this level.

I only have a few alerts for tonight so don’t press until we get some clarity from the earnings. Also keep in mind that alert levels have been acting like targets and we have been getting weak break outs at some of these spots. So don’t be afraid to try a trade to the alert level or a resistance short on a failed breakout, especially if it is extended away from a base or EMA.

The following ideas may be actionable tomorrow:

ato 29 long

cog 34 long

lstr 42 long

mon 55 long

pot 95 long

bcr 80 long

amsc 30 long

2010-07-11T22:29:00.000-04:00

Much has been made of the rally in the markets last week and I am not going to ignore it but you can’t ignore the lack of volume and the fact that earnings season kicks off tomorrow afternoon. It felt like one big short squeeze to me. We are definitely off the lows and out of the real danger zone but the SPY stopped right at the 20 day MA and AAPL is still below the 20 day MA so I wouldn’t exactly consider this a rip roaring bull market just yet.

AA kicks off earnings season tomorrow afternoon and with that in mind I am not expecting much from this market until we get some clarity on the earnings front. As you look to left on almost any daily chart you are going to see a lot of congestion. This market has a great amount of work to do if it want s to go higher.

There are three market tells I want you to watch in the next day or two that may give a sense of where the market is headed. AAPL, GS and C are pretty high profile names and may tell the tale of the market.

AAPL arguably is the leader of the market and should be on your radar screens at all times even if you are not trading it. He is still below the 20 day MA (261.39) and just above the 50 day MA (256.49). Simply put, watch what happens at these levels is it breaking out, being rejected chopping around? This may give you a good sense of what the broader market is going to do.

GS is just below the 50 day MA (139.81) and the top of a range roughly $140. Watch the reaction at that $140 level.

The last one I want you to watch is C. There is not a clean level on this one, but above 4.10 C looks like it wants to break out of a range that goes back to the middle of May.

This obviously isn’t perfect but I think these stocks may give us a sense of where the market is headed and they should be closely monitored until these levels are resolved.

The following ideas may be actionable tomorrow but I am expecting very little tomorrow so don’t push it.

brk.b 80 long

cf 75 long

ipi 23.38 reversal/short sale on 50 day MA

pru 58.18 reversal/short sale on 50 day MA

pxd 63.59 reversal/short sale on 50 day MA

qcom 35.63 reversal/short sale on 50 day MA

scco 31.49 reversal/short sale on 200 day MA

slb 60.41 reversal/short sale on 50 day MA

spg 85.49 reversal/short sale on 50 day MA

swn 39.98 reversal/short sale on 50 day MA

trw 30.45 reversal/short sale on 50 day MA

wlt 71.2 reversal/short sale on 50 day MA

2010-07-08T21:57:00.001-04:00

The rally in the last three has been good and like I said couldn’t have come at a better time. Another failed rally would have been very dispiriting to the bulls. For the sale of my 401k and kids college fund I am happy to see the rally, but I don’t think we are out of the woods yet and I am concerned that if we can’t clear the moving averages and congestion above that in the next couple of weeks we are going to have yet another lower high and a failed breakout. Only time will tell. With that in mind I am going to be looking to short these rallies at MA’s and prior support levels.

The following ideas maybe actionable tomorrow but take it easy on a Friday in July.

aci 22.44 reversal/support short on 50 day MA

acm 23.9 reversal/support short on 20 day MA

apol 45.94 reversal/support short on 20 day MA

asia 25.17 reversal/support short on 200 day MA

atw 28.31 reversal/support short on 50 day MA

bbt 28.66 reversal/support short on 20&200 day MA

bmc 36.91 reversal/support short on 50 day MA

ccj 23.54 reversal/support short on 50 day MA

cern 81.75ish reversal/support short on 50&200 day MA

dow 26.58 reversal/support short on 50 day MA

drq 50.82 reversal/support short on 50 day MA

dvn 65.25ish reversal/support short on 20&50 day MA

flr 46.83 reversal/support short on 50 day MA

ge 36.65 reversal/support short on 50 day MA

gs 140.19 reversal/support short on 50 day MA

gww 104.39 reversal/support short on 50 day MA

ir 35.31 reversal/support short on 200 day MA

lstr 41.87 reversal/support short on 50 day MA

mee 32.13 reversal/support short on 50 day MA

met 40.8 reversal/support short on 50 day MA

mfe 32.78 reversal/support short on 50 day MA

mon 52.71 reversal/support short on 50 day MA

oii 50.81 reversal/support short on 50 day MA

oxy 82ish reversal/support short on multiple MA's

slb 60.66 reversal/support short on 50 day MA

sohu 44.07 reversal/support short on 50 day MA

spg 85.59 reversal/support short on 50 day MA

swn 40.04 reversal/support short on 50 day MA

sid 16 long

2010-07-07T20:56:00.000-04:00

We finally got the oversold bounce so many bulls were looking for and it could not have come at a better time. I think another failed rally would have been very damaging to the bull camp. It was a nice broad based rally, I have 271 stocks on my WL 262 of them were up. The only fly in the ointment was the light volume but that has not seemed to matter lately, besides its summer.

The canary in the coal mine for this rally was the weakness in the dollar. I wrote the other day the dollar index was testing support at 84 and when it finally broke down through it this afternoon the market really took off. You can see it here in these two charts.

The charts are still pretty messy so there are no good bullish break out charts yet just some resistance shorts. I think the best case scenario for the bulls would be a day or two of consolidation and then a move higher. That would also set up some nice spots for us as well.

The following ideas may be actionable tomorrow but they are mostly resistance shorts. Let one or two pass, if they are not working then aside and don’t try a resistance short the second time around. Remember on a resistance short you want the stock extended away from any kind of base or the 5 minute EMA with a stop above the reversal candle.

do 67.22 reversal/resistance short on the 50 day MA

eog 105.79 reversal/resistance short on the 20 day MA

fast 52.04 reversal/resistance short on the 20&50 day MA

fcx 66.93 reversal/resistance short on the 50 day MA

ip 24ish reversal/resistance short on the 20&50 day MA

pnra 71.05 reversal/support buy on 200 day ma

prgo 51.7 reversal/support buy on 150 day ma

2010-07-06T20:26:00.000-04:00

My opinion of the market has not changed since yesterday. The bears are still firmly in control of the market. A selloff in the dollar index and a rally in commodities and riskier sectors like the emerging markets were not enough to prevent this afternoon’s selloff. These strong opens that fade throughout the day have got to start becoming disheartening to the bulls.

Today’s high in the SPY 104.37 is only .01 away from the low put in when we established the last range back on 5/25 (SPY$104.38). Prior support has now become resistance. This market is respecting technicals so know your levels.

Until we can breakout and close above SPY $104 or breakdown below Thursday lows (SPY $101ish) things will remain pretty choppy. So don’t press and try to stay cool.

The following ideas may be actionable tomorrow:

alb 38.42 reversal/support buy on 200 day MA

deck 41.57 reversal/support buy on 150 day MA

fast 47.3 reversal/support buy on 150 day MA

mcd 64.39 reversal/support buy on 200 day MA

netl 25.55 reversal/support buy on 200 day MA

pnra 70.97 reversal/support buy on 200 day MA

pxd 54.77 reversal/support buy on 150 day MA

tii 17.29 reversal/support buy on 200 day MA

trw 25.48 reversal/support buy on 200 day MA

vrsn 25.03 reversal/support buy on 200 day MA

wfmi 33.26 reversal/support buy on 200 day MA

wynn 71.44 reversal/support buy on 200 day MA

adp 39 short

bke 31 short

whr 82 short

2010-07-05T16:08:00.000-04:00

“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness.”

Happy Birthday America.

SPY $104 was major support and truthfully I expected more panic to set in when we broke it. But the market is in such an oversold condition that the selloffs have been pretty sloppy. Never the less we have broken through major support, the next support levels that I see are down around SPY $100 and then $95. In short the recent lows, Thursday, need to hold or we are likely headed lower.

The only real contra indicator I have seen is the weakness in the Dollar index. The DXY is back below the 20 & 50 day MA , for the first time since April and is testing support down around $84. In the recent past dollar weakness has meant higher equities.

Last week provided some excellent examples of my style of trading and I would like to share them with you.

On Thursday CSX had a text book breakdown at $48. If you look on the daily chart you will see where CSX tested the $48 level back on May 21st, 25th, June 8th and then again on July 1st. CSX opened Friday up above $49 and proceed to sell off all morning. It based nice above $48 testing it three times before finally breaking through around lunch time. Once breaking down through it never gave you a reason to be stopped out. An argument can be made that there was a better entry up around $48.50 on the second test of that level but either way it was a pain free trade.

The other examples are reversal/support buys on an important moving average. The first example is EOG which had a nice bounce off of the 200 day MA ($96) on Thursday. Note the vertical move into the MA on no news and moderate volume. EOG then puts in a low below $96 ($95.78) providing us with a built in stop, and reverses nicely. If executed properly you would have risked about .25 to make $3. Not a bad risk reward.

The other example was in HMIN on Thursday as well. It had a nice bounce off of the 50 day MA ($37). Again notice the vertical move into the support level on no news and moderate volume. In this case the spot to buy the stock was right on the number (37 was the low of the day) but the bars of volume at the level were your tell that this was the spot to get in. This one was more difficult to catch but if nothing else it goes to show the importance of these levels.

There is going to be a lot of people on vacation this week and we have a light economic calendar so I am not expecting too much action early in the week, but keep an eye on Thursday’s lows. If we start to break down below them things could get interesting.

The following ideas could be actionable early this week.

cmi 59.67 reversal/support buy on 150 day MA

ctsh 46.96 reversal/support buy on 200 day MA

fast 47.22 reversal/support buy on 150 day MA

fnsr 12.96 reversal/support buy on 150 day MA

netl 25.52 reversal/support buy on 200 day MA

pxd 54.66 reversal/support buy on 150 day MA

sbux 23.43 reversal/support buy on 200 day MA

tii 17.28 reversal/support buy on 200 day MA

trw 25.44 reversal/support buy on 200 day MA

uhs 34.69 reversal/support buy on 150 day MA

vrsn 25.02 reversal/support buy on 200 day MA

wfmi 33.23 reversal/support buy on 200 day MA

wll 73.12 reversal/support buy on 200 day MA

wynn 71.41 reversal/support buy on 200 day MA

dhr 36 short

esrx 45 short

intu 34 short

ir 33 short

rah 54 short

rax 17 short

shld 62 short

sohu 40 short

iwm 59 short

iyr 46 short

kre 22 short

hsp 58 long

2010-06-29T21:23:00.003-04:00

In recent days I have written here about the how TLT $100 looked like a breakout and a flight to safety. Last night TL closed right at $100 and gapped above it this morning leading to a tremendous selloff in equities. The major indexes were down over 3% and the materials/commodities complex got crushed.

SPY $104 acted as a magnet for the market and the question now is, do we hold here or take another leg down? The rally to resistance (SPY 112/113) on light volume and then the sell off on heavier volume had to be discouraging even to the most bullish of bulls. On a longer term view (SPY weekly chart) you can make the argument that going back to the week of MAY 23rd 2008 we have made 4 consecutive lower highs on the SPY weekly chart and that we are in the process of breaking down through a bearish triangle. In short we really need to hold here.

Unfortunately the choppy and lackluster market we have been experiencing lately has left us very few clean spots to take advantage of. So what I think/hope is going to happen is that we get a good panic gap down which will give us a shot to buy some solid support. The market is oversold and at some major support, not necessarily a bad thing.

The following ideas may be actionable tomorrow, but remember the rules for buying reversal/support. No catching falling knives. Look for the stock to come into the level vertically on light volume and no news. Allow the stock to break the level snap back and buy it on the way back up through the level using the low of the candle as a stop. Also, only try this the first time around. The second test is subject to failure.

The following ideas may be actionable tomorrow but there are enough ideas here to let a few pass and see if we are snapping back or taking another leg down. If stock after stock goes crashing through support like it wasn’t even there then step back. This is an important spot in the market and we may see a dog fight here.

aap 48.32 reversal/support buy on 50 day MA

alb 38.32 reversal/support buy on 200 day MA

amx 47.63 reversal/support buy on 200 day MA

au 41.97 reversal/support buy on 50 day MA

chd 62.81 reversal/support buy on 200 day MA

clx 61.59 reversal/support buy on 200 day MA

cree 58.77 reversal/support buy on 200 day MA

de 54.24 reversal/support buy on 200 day MA

eog 95.73 reversal/support buy on 200 day MA

esrx 45.89 reversal/support buy on 200 day MA

intu 33.2 reversal/support buy on 150 day MA

rmd 58.76 reversal/support buy on 150 day MA

sanm 12.85 reversal/support buy on 200 day MA

spg 78.23 reversal/support buy on 200 day MA

tii 17.23 reversal/support buy on 200 day MA

trw 25.32 reversal/support buy on 200 day MA

wfmi 34.07 reversal/support buy on 150 day MA

whr 84.87 reversal/support buy on 200 day MA

wsm 23.52 reversal/support buy on 200 day MA

mur 49 short

2010-06-28T18:33:00.000-04:00

It was a sleepy summer market today with light volume and not much volatility. Utilities, fixed income and consumer staples out performed, with materials, metals & mining and oil drillers underperforming. Unfortunately there was not much to take away from today’s performance that is just the way it is some days.

Last week I wrote about TLT and how it looks like a breakout at the $100 level. $100 was tested again today and in fact TLT closed at that 99.98 this afternoon. I will be monitoring this level closely in the coming days to see if we start to trade above it and perhaps get a selloff in equities or if TLT has a failed breakout and we get a rally in stocks. Only time will tell. The more we test this level the more important it becomes so keep an eye on it. Also don’t forget about SPY 104, at this point it is major support and needs to hold. Short term resistance for SPY is now the 20 day MA (109.14) and then up around the 150 day and 200 day MA’s (112.87 & 112.83) I know that these are wide ranges but the market is a big choppy mess right now. Flash crash not only hurt investor psychology but it made the charts a mess.

I don’t have many new alerts for tomorrow and until we break out of this range in the SPY the market is going to be choppy. We have a shot at shaking things up with some of the employment data coming out later this week so be patient.

Remember to keep all breakout and breakdown alert levels on your platform until they trigger, they do not expire.

The following ideas may be actionable tomorrow:

cmg 140.9 reversal/support buy on 50 day MA

dhr 37.61 reversal/support buy on 200 day MA

luv 11.34 reversal/support buy on 200 day MA

mcd 65.94 reversal/support buy on 150 day MA

pnra 74.79 reversal/support buy on 150 day MA

esi 86 short

2010-06-23T21:16:00.000-04:00

It was another choppy quiet Fed day today. Not even an abysmal new housing starts number could shake things up. I know that this can get pretty boring but unfortunately that is the way the market is sometimes and we have to take the good with the bad.

Until we break out of this 50 day MA (114ish) to 104 level on the SPY the market is going to remain pretty choppy. The good news is this can’t last forever. While the market is stuck in this range take what you get and don’t over stay your welcome.

There are two charts that I want to focus on tonight.

1. The TLT (iShare Barclays 20+ Year Treasury Bond). It is the etf for the long bond.

This etf represents the flight to safety trade, look where it was at the height of the financial crisis in the fall of 2009. This chart looks like it wants to break out to me. Through 100 this looks like a breakout buy to me.

2. The next is XHB (SPDR S&P homebuilders). “The investment seeks to replicate, net of expenses, the S&P Homebuilders Select Industry Index.” Its holdings include AMN, DHI and LEN among others. Sales of new homes dropped over 30% and fell to a 300,000 unit annual rate, the lowest since they started keeping the records in 1963. Yet the XHB closed up 1.12% on the day and looks like it may have bounced off of major support at 15.

What does the future hold for the market? A breakout of the flight to safety trade and lower equities or a bounce off of major support after a horrible number? I’m not exactly sure but the durable goods number is out tomorrow and the GDP comes on Friday.

Keep an eye on all the levels mentioned here tonight they are going to be important.

The following ideas may be actionable tomorrow:

ads 64.95/63.90 reversal/support buy on 150 or 200 day

ann 17.3 reversal/supprt buy on 200 day MA

vly 13.51 reversal/supprt buy on 200 day MA

wmt 50 short

ipi 21 short

hoc 28 long

2010-06-22T21:43:00.002-04:00

Tomorrow is Fed day and in full disclosure I am usually gone for the day by 11:30, I may come back in at 2:30 but it is rare. There is too much noise and too many things out of my control for my kind of trading.

The following ideas may be actionable tomorrow:

ads 64.92/63.85 reversal/support buy on 150&200 day MA

ann 17.27 reversal/support buy on 200 day MA

ipi 29 short

wsm 24.51 reversal/support buy on 150 day MA

But don’t press it’s fed day and anything or nothing can happen.

2010-06-21T20:25:00.000-04:00

Today’s action had to be disappointing for the bulls. There was a nice gap up the market this morning and good strength in the commodity space but ultimately it wasn’t enough and the market gave it all back closing on the lows. To say that the market is sloppy and lackluster is being charitable. The SPY actually dipped below the 200 day MA (111.29) before snapping back late in the day.

I’m afraid that until we pull away from the 200 day MA on the SPY with some conviction and authority the market is going to be in a bit of a no man’s land. The good news is that we have the FOMC announcement on Wednesday, durable goods & jobless claims on Thursday then we close out the week with the GDP and consumer sentiment on Friday so hopefully something in there can shake this market loose.

In the mean time this choppy action is setting up some nice clean spots for us to watch. Remember that breakout/down alerts do not expire, until they are triggered so keep them on your platform. Also don’t forget that these levels can also be a place to fade the move.

Don’t be a hero in this market if a stock setups with a nice a base and some volume take the trade otherwise preserve your capital and wait.

Some of these spots are a little far away so they may not trigger soon but keep them on your platform anyway.

agu 54 long

cli 34 long

crk 34 long

hoc 28 long

schn 46 long

mos 46 long

rimm 63 long

rkt 56 long

ibm 132 long

2010-06-17T21:45:00.002-04:00

We had a choppy sideways mess today and it isn’t fun but it is part of the healing process.

Some of the commodities fared better today (UNG, GDX, SLV, GLD) but some fared worse (SLX, JJC, SLX, KOL). All things considered the day was a wash and I wouldn’t put too much stock in it. To continue the mixed signals AAPL looks like it wants to go to new highs and GS is hanging on by a thread. Tomorrow is quadruple witch and I know many traders that take most if not the whole day off because it is a big pain in the neck.

The good news is that the SPY tested the 200 day MA bounced and managed to close the day closer to the highs. So the rebound is intact for now. The bad news is that this “recovery” has come on light volume. It is a choppy lackluster market that needs to do some healing.

The breakout/breakdown alerts I post here do not expire and you should keep them on your platform for the future. They may not be the breakout or breakdown I thought but they are important levels. Always be flexible when you are trading and understand that those alerts can be a great place to fade the move and do a reversal trade.

The following ideas may be actionable tomorrow but I don’t expect much.

dd 38 long

de 60 long

gww 108 long

rost 58 long

vit 23 long

2010-06-16T21:44:00.000-04:00

It was kind of a lack luster choppy day on light volume that was not good for the break out trading that I favor. The IBM 130 alert worked for a bit, but nice clean set ups like CLX 65, CSX 54, LVS 27, SBUX 28 VALE 28 and VMC 48 either out right failed or worse teased you by chopping around the number. Such is the life of a trader. Regardless know your levels and respect them even if they don’t return the favor some times.
However there were two nice lessons in this mess today. IBM provided a nice example of a break out long. It had a nice base below the alert (130) and then a good burst of volume up through the level.

And VALE provided us a nice example of a failed breakout. A stock that is extended away from any kind of base going into the alert level on light volume and no real news.

Despite the choppy lackluster action and light volume the SPY is still above the 200 day MA and is most likely headed for a test of the 50 day MA (114.46). The CPI, jobless claims and current account are out before the open but I don’t believe they are going to have any real effect on the open. They are then followed up by leading indicators & the Philly Fed at 10 and the Nat Gas #’s at 10:30. Just be aware.

The levels I put up on this blog are spots I think are significant. Sometimes they are (IBM&VALE) sometimes they are not (CLX, CSX, LVS, SBUX) such is trading. I mention this to reiterate the point that just because I have some thing marked as a break out long or break down short doesn’t mean that it can’t reverse there. Know that these levels could be important and be ready to flip if the market dictates, and always use reasonable stops.

With that said the following ideas could be actionable tomorrow:

crk 34 long

dd 38 long

gymb 46 long

mlm 94 long

mos 46 long

pnra 85 long

vit 23 long

vno 80 long

rimm 63 long

rkt 56 long
I also want to add the following as levels to watch for the future (they are only 1 touch spots right now)

atw 28 long

au 44 long

esrx 54 long

gdx 52 long

paas 26 long

2010-06-15T20:52:00.000-04:00

We had a nice strong rally today, but not so strong as to ruin the list of alert levels I posted yesterday. With a little strength and decent volume tomorrow and/or Thursday we could get some good action from that list.

Solars, oil drillers and semi’s were among the strongest groups today, with fixed income and the dollar index underperforming. The market was well bid all day but picked up steam in the afternoon closing at the highs and above the 200 day MA for the first time in almost a month. It was excellent action for the bulls and probably makes the 50 day MA (114.60) on the SPY the next stop. The only real negative I saw was light volume.

There are a number of break out longs on the list tonight enough to let one or two pass to see if they work. Remember that you are looking for a nice base below the level and then a move through preferably on a burst of volume.

MCD & INFY today were pretty good examples of this.

Also don’t forget that a gap above the level voids the alert, they are subject to higher rates of failure.

The following ideas may be actionable tomorrow:

clx 65 long

crk 34 long

csx 54 long

dd 38 long

hog 28 long

ibm 130 long

lvs 27 long

pnra 85 long

rimm 63 long

rkt 56 long

sbux 28 long

vale 28 long

vmc 48 long

aapl 260 long

2010-06-14T18:07:00.002-04:00

The 200 day MA on the SPY was being watched by every trader on the street. So the fact that we failed there today didn’t really surprise me, when a level is so closely watched it can often be sloppy. Also the light volume and downgrade of Greece did not help. The selloff just reconfirmed the importance of that level and set us up to punch through on the next test with good volume.

Today’s rally to the 200 day MA on the SPY and subsequent sell off set up a bunch of nice clean alerts levels for us to watch. These are mostly one touch spots and really need time to consolidate to work effectively but we should monitor them none the less.

The following ideas need some time to consolidate but keep them on your platform. They may be breakout longs or spots for resistance shorts on failed breakouts we’ll find out when we get there.

clx 65

crk 34

csx 54

dd 38

fslr 110

har 34

ibm 130

infy 62

ioc 57

lvs 27

mcd 70

mlm 94

pnra 85

rah 61

rgld 52

spwra 14
The following ideas could be actionable tomorrow:

bj 39 long

intu 37 long

rax 18 long

vit 22 long

uso 35 long

2010-06-13T16:52:00.000-04:00

I though Friday’s action was helpful, the market shook off the ugly retail sales numbers, closed near the highs and above the 20 day MA for the first time in over a month. There was strength in the commodities UNG, KOL and JJC all outperformed. Even retailers did ok they were down only .44% after that awful number. The market had a good excuse to sell off with that retail sales number and it didn’t. I thought that was positive.

With that said we are still in inside the triangle on the SPY weekly chart and the 200 day/104 range on the daily chart and until we break out, things are going to be pretty choppy. But I think we have a good shot of breaking out of these ranges and getting better clarity on the direction of the market this week.
The economic calendar is light early in the week but on Wednesday we get housing starts, PPI and industrial production. On Thursday the CPI and jobless claims are out and Friday is quadruple witching so hopefully there is enough in there to break this market out.

Also keep an eye on the dollar index as well. Over the last 4 sessions it has had a small pull back. The DXY closed right on the 20 day MA (86.93). If it has a strong bounce here and moves back towards the highs we will likely see more weakness in equities but more dollar weakness could bring us higher oil and equities, so watch this spot.

I don’t have much for tomorrow because the charts are such a mess, but I am not expecting much out of tomorrow any way so take it easy and let the market sort itself out.

bj 39 long

cmp 78 long

xom 62 long

2010-06-11T09:27:00.000-04:00

Yesterday’s almost 3% rally in SPY’s was essential to keep the bulls hopes alive but all it did for me was to reconfirm this triangle.

I am actually not going to post any picks today because things are just too choppy and I am not seeing anything new that I feel strongly about. Remember that breakout long and breakdown short alerts do not expire until they are triggered so keep them on your platform. Reversal/support buys or sells on MA’s are good for the day maybe two because the MA’s are constantly changing. So delete those.

The theme of the market yesterday on TV was, can we keep this rally going and string together a couple of positive days? That is an excellent question and I don’t think this morning’s disappointing retails sales number is going to help in that effort.

I cannot stress enough how important the SPY 104 level is becoming. It really needs to hold and so far it is and that is good. In fact if we got down there today it would probably be a decent place to try a reversal/support buy.

I would like to add two other thoughts.

1. The 20 day MA (109.51) on the SPY is coming into play and will something to watch in the next few sessions. Does it act like a lid or can we close above it and start to work higher?

2. The USO closed above the 20 day MA yesterday for the 2nd day in a row. Higher gas prices are backhanded victory I realize but it can be a measure of global demand and growth so let’s see if USO can stay above the 20 day MA (33.48) in today’s weakness.

Take it easy today and don’t press. This range will resolve itself soon enough and we will have decent opportunity.

2010-06-09T21:34:00.000-04:00

Today started out promising for the bulls we had a small gap up, a rally and no headline disasters, but ultimately it wasn’t enough and we closed at the lows. It has to be pretty discouraging to the bulls that they can’t string together two decent days in a row.

Until the SPY resolves this triangle we are in for the choppy action we have been seeing recently.

My belief is that we are going lower, probably SPY 100. However there are so many eyes on this SPY 104 level that it could be pretty choppy when we get there. I just think that the bulls can be disappointed so many times until they decide to give up and look lower. Until this triangle is resolved either up or down take it easy and don’t press.

The following ideas may be actionable tomorrow. Some of the short alerts are a little far away and may act as support if the market bounces again so be nimble until we get some clarity.

bvn 38 long

dhr 74.16 reversal/support buy on 200 day MA

fslr 100 short

ge 15 short

grmn 31 short

ipi 21 short

mfe 31 short

shld 77 short

x 40 short

2010-06-08T20:34:00.001-04:00

Too much will be made of today’s 123 point rally in the DJIA. I thought it was more significant that the SPY came in and tested support twice and finished at the highs of the day. The SPY is still in the 200 day/104 range so not much has changed but today’s rally was encouraging. A .84% one day rally in the SPY does not a bottom make so continue to watch the 104 level.

On the plus side DO & RIG (drillers which have been weighing down the market) look like they may have put in some capitulation volume today. However on the negative side AAPL closed below the 50 day MA, and the 200 day MA in AMZN provided no support but acted like a lid when tested on the up side.

I still think we have a real shot at testing SPY 100 so be nimble and don’t over stay your welcome in any trade. Until we break this range SPY 200 day MA/104 range the pickings will be a little thin.

The following ideas maybe actionable tomorrow, be aware of the petroleum #’s at 10:30 and the beige book at 2:00.

ads 64.26 reversal/support buy on 150 day MA

alb 37.64 reversal/support buy on 200 day MA

bpi 19.15 reversal/support buy on 150 day MA

cree 56.59 reversal/support buy on 200 day MA

de 53.12 reversal/support buy on 200 day MA

dhr 74.09 reversal/support buy on 200 day MA

luv 11.09 reversal/support buy on 200 day MA

sanm 12.19 reversal/support buy on 200 day MA

x 40 short

bvn 38 long

2010-06-07T21:18:00.000-04:00

Simply put this market is as ugly as can be. Today’s selloff now has every major etf trading below its 200 day MA. The SPY is still above the most recent support level (104) but it looks like it wants to take another leg down.

There are thousands of barrels of crude pouring into the Gulf of Mexico everyday and we are in “summer driving season” yet crude oil cannot catch a bid.

Look at this chart of the USO and consider what it is saying about global demand and growth.

MA’s acted as targets today and provided little if any bounce. Sellers are in charge of this market right now but there doesn’t seem to be panic out there, yet.

The SPY 104 support level is huge. There are a lot of eyes on that level and it needs to hold. A gap down to or below it on the open tomorrow might be defended by the bulls, but I think if we have two more days like today it is going to give way.

AAPL was saved by its 50 day MA (250.65) today but that is likely to give way with another test.

The following ideas may be actionable tomorrow but like I said MA’s provided little if any bounce today so if possible let a couple pass to see what kind of action you get. If you are seeing bounces then give it a shot. If the stocks are crashing through those MA’s like they weren’t even there then stay away or look to get short.

ba 59.62 reversal/support buy on 200 day MA

bbt 28.56 reversal/support buy on 200 day MA

chd 63.97 reversal/support buy on 150 day MA

ctrp 34.24 reversal/support buy on 200 day MA

ctxs 42.15 reversal/support buy on 200 day MA

de 53.06 reversal/support buy on 200 day MA

dhr 74.01 reversal/support buy on 200 day MA

expd 35.48 reversal/support buy on 200 day MA

lh 73.06 reversal/support buy on 200 day MA

luv 11.08 reversal/support buy on 200 day MA

mcd 65.23 reversal/support buy on 150 day MA

mtb 72.34 reversal/support buy on 200 day MA

sanm 12.14 reversal/support buy on 200 day MA

vno 68.86 reversal/support buy on 200 day MA

whr 86.56 reversal/support buy on 150 day MA

gpn 40 short

pcln 176 short

esrx 105 long or possible resistance short on failed breakout

2010-06-06T18:41:00.000-04:00

Fear about Europe, a rumor of a huge trading loss at one of the big European banks and a putrid jobs report all conspired to give us a pretty ugly day on Friday. All of the major indexes were down over 3%. The NASDAQ composite closed below its 200 day MA and the small cap ETF IWM closed at the lows of the day right above its 200 day MA (63.25)

Natural Gas (UNG), government bonds (TLT) and gold (PHYS, GLD) were among the strongest groups, with real estate (URE), basic materials (UYM) and financials (UYM) among the hardest hit.

As ugly as Friday was it really only got us back to the middle of the range on the SPY. The 200 day MA (110.87) above and 104 below is the range. My belief is that we are going lower down around 100 on the SPY but until we break this range things are going to be pretty choppy. The 200 day MA on the SPY daily chart is acting like a lid for the market and until we can close above it in a convincing manner the bears are in control. Know where the 200 day MA is every day and monitor it.

The other trend that is still intact is the well defined down trend on the SPY weekly chart. We continue to ride that trend line down and that isn’t going to end until this market can rally above the 200 day MA.

I think it also important to point out that the dollar index DXY is back to levels it has not seen since the height of the financial crisis; in fact we are a little over $1 away from the levels the dollar was at when the market put in its lows in March of 2009.

The economic calendar is pretty light this week so news headlines and rumors could hold extra sway in the markets. Be nimble.

The alert levels I post here for each stock are significant spots on the chart for that stock. (top/bottom of a range, moving average etc.) I may have it tagged as a long or a short but the stock could easily reverse at that level and do the opposite of what I thought might happen. Quick versatile thinking is critical in trading and when you see alert after alert trigger and fail it may be time to take the other side. Short alert levels can turn out to be great support buy spots. It doesn’t always work that easily but it is important to know your levels and have the flexibility to flip sides if the market warrants it.

Also remember the rules for buying support/reversals. No catching falling knives. Look for the stock to come into the level vertically on light volume and no news. Allow the stock to break the level snap back and buy it on the way back up through the level using the low of the candle as a stop. Also, only try this the first time around. The second test is subject to failure. With that said the following ideas may be actionable tomorrow.

adsk 26.76 reversal/support buy on 200 day MA

bbt 28.55 reversal/support buy on 200 day MA

bke 31.72 reversal/support buy on 200 day MA

ceco 26.36 reversal/support buy on 200 day MA

chd 63.91 reversal/support buy on 150 day MA

ctxs 42.12 reversal/support buy on 200 day MA

expd 35.91 reversal/support buy on 150 day MA

hrs 44.25 reversal/support buy on 200 day MA

mcd 65.18 reversal/support buy on 150 day MA

mtb 72.26 reversal/support buy on 200 day MA

nsc 51.9 reversal/support buy on 200 day MA

dv 56 short

fdo 38 short

jec 40 short

2010-06-02T21:23:00.000-04:00

It was a solid day in the market with the SPY up 2.57%. It is no coincidence that we had such a nice rally and the energy patch led the way. The drillers having been laying on this market like an oil slick, haha. DIG, OIH, UNG & KOL all strongly outperformed today. It’s still pretty ugly in the energy patch most of the names are still in well defined down trends but today’s action may be the beginning of a bottom. For example APC, ATPG, ATW, BHI, DO, DRQ, MUR, OII, PXP, SLB, SWN, OIH, XLE all look like they may have put in a reversal hammer today.

I don’t want to get too far out on a limb because the SPY is still trapped inside the 200 day MA/$104 range but we now have 4 higher lows on the SPY and it looks like we may be able to punch through. You need to keep an eye on SPY 110.77(200 day MA), everyone else is.

The charts are still pretty messy and good clean spots are hard to come by. I am hoping that getting the economic calendar overhang off the markets in the next two days gives us some good trading, but watch those news headlines.

I know there aren’t many but the following ideas may be actionable tomorrow and Friday please be aware of the economic reports coming out. As we get clarity on the direction of the market more levels will develop.

fdo 39.16 reversal/support buy on 150 day ma

hog 27.86 reversal/support buy on 50 day Ma

ilmn 43 long this is a minor spot

CNI 59 but this also minor because it is below the 50 day MA

2010-06-01T20:26:00.003-04:00

The market has no life to it right now the 200 day MA on the SPY is acting as lid and until we can trade above there rallies are being sold. The oil spill and geo politics are hanging all over this market. Until we get some clarity on these issues I am afraid that we are going to have the choppy trading we have been seeing lately.

It feels like more of a buyers strike than forced or aggressive selling, but until we can get above the 200 day MA it appears the bears are in control.

I still consider AAPL & GS to be important stocks for the psychology of the market; continue to watch them closely as market tells. USO falls into this category as well. Considering how much focus there is on the oil spill USO may give us an early sense of direction. But the SPY range is still the 200 day MA above and 104 below watch those levels.

I have a few ideas for tomorrow but the charts are still a mess and these are minor. I expect more choppy and sloppy trading, especially ahead of the economic data coming out on Thursday and Friday.

bbt 28.51 reversal/support buy on 200 day MA

ceco 26.3 reversal/support buy on 200 day MA

ctxs 41.97 reversal/support buy on 200 day MA

fdo 39.09 reversal/support buy on 50 day MA

hog 27.84 reversal/support buy on 150 day MA

hrs 44.04 reversal/support buy on 200 day MA

mcd 65.01 reversal/support buy on 150 day MA

mhk 49.9 reversal/support buy on 200 day MA

mtb 75.12 reversal/support buy on 150 day MA

ufs 53.25 reversal/support buy on 200 day MA

wab 40.79 reversal/support buy on 200 day MA

mfe 31 short