MA | RS | SHLD | GNK | RIG

XLF remains a sell, with an anticipated buy to cover signal coming later this week. The fact that it performed so poorly today while the market ate up 141 pts doesn't suggest to me the threat of an immediate reversal. I imagine that reversal will come only when the inevitably brainless announcement is released in the weeks ahead. That said, if/when it happens, it will be quick and violent. Just the mention of creating a bad bank, last Wednesday, moved XLF against me 12%, from which it just finally recovered. I suspect a further drift lower this week with the help of some less than positive economic releases.
Below are some additional ideas.

MA


RS


SHLD


GNK


RIG

RIG: leading the pack?

I think there is a good chance it is. Even though it appears that OIH, OXY, and DVN will bounce off of support as they have been, don't be surprised if they don't - see RIG. Also, often times when stocks snap back to their trendline steeply/abruptly, said trendline is unable to hold up against the momentum.

RIG

OIH

OXY

DVN

setups

LONGS:

USO and WDC are presenting low risk setups to the long side.


SHORTS:
FSLR
The following oil, gas, steel, and coal stocks all look like crap after their technical breakdown earlier this month:
SLB, OIH, HAL, APA, DVN, BP, XOM,
X, AKS
ACI, BTU
If you happen to like any of the oil driller/service/equipment names, stick with CHK or RIG.


WATCH:
FXI (125)
BIDU: bearish but oversold, short on a bounce


OptionSpot

Taking it

A lot of stocks rolled over and broke support today...and from sectors you might not expect (ag, steel, coal, energy, etc). Hopefully none of these moves ruined your weekend plans and you'll be able to find a way to profit from them. I will likely sit tomorrow out in protest of this obnoxiously choppy market but I am seeing a lot of nice setups for next week.


Steel and Coal stocks all took in on the chin while breaking through significant levels of support
--> X, AKS, ACI, BTU


Possible longs (as always use tight stops)
--> RIG (yes, this is the whole list)


Possible shorts (same)
--> ICE, GNK, AA, POT, MON, MOS, UNP (...finally UNP)


Watchlist (these may yet require a bounce or a pullback before taking action)
--> MA, VIX, CME, NMX


Have a great July 4th weekend! With this year's undisclosed destination, I will see if I can snap another award winning photograph - just like the one I took last year: Click HERE to see it.

If I ever get tired of raping and pillaging the options market maybe I can just fall back on my photography skillz.

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OptionSpot

Patience

Fortunately I have the luxury of not having to be in the market every day...because most of the charts I'm coming across look like shit.

Remember, Chuck Norris doesn't sleep..... he waits.

Here are a few thoughts that should be self explanatory:

AKS

CELG

COF

FTK

GNK

GOOG

NMX

RIG

SMH

USO

VIX

X

SPY



Trading for a Living
A trendline is not a glass floor under the market - one crack and it is
gone. It is more like a fence that bulls or bears can lean on. They can even
violate it a bit without toppling it, the way animals shake a fence. A trendline
break is valid only if prices close on the other side of a trendline.

Short setups

The bulls had a nice day today but I'm not feeling too optimistic...not after last week's breakdown. It seems like oil will continue to dictate market sentiment and direction. Be aware of the following economic stats this week:

Date	Time (ET)	Statistic
27-May	10:00 AM	Consumer Confidence
27-May	10:00 AM	New Home Sales
28-May	8:30 AM	Durable Orders
28-May	10:30 AM	Crude Inventories
29-May	8:30 AM	Chain Deflator-Prel.
29-May	8:30 AM	GDP-Prel.
29-May	8:30 AM	Initial Claims
29-May	10:30 AM	Crude Inventories
30-May	8:30 AM	Personal Income
30-May	8:30 AM	Personal Spending
30-May	8:30 AM	PCE Core Inflation
30-May	9:45 AM	Chicago PMI
30-May	10:00 AM	Mich Sentiment-Rev.

Pure speculation: In the very short-term I think it's reasonable for oil to pullback a little further and for SPY to climb back to 140 (or even low 140s). If any of this transpires I will be looking to buy Puts or Bear Put Spreads (aka: debit spreads) because I think more weakness is ahead and any pullback in oil will be temporary. I will also look at selling OTM Call Credit Spreads above significant levels of overhead resistance. Of course the market (SPY) could go straight to 132 without any more bounce so be cautious. Here are a few setups to note (click on company name or symbol to launch graph):

UnitedHealth Group (UNH) - bearish - may be on its way back down.

Apple (AAPL) - bullish - like AAPL to the upside. Use yesterday's low or the trendline as a tight stop.

Transocean (RIG) - bullish - use a very tight stop (see trendline) as the drillers have been getting punished.

Capital One (COF) - bearish - anxiously awaiting this lower trendline to be breached. Also, the fundamentals (i.e. tons of bad debt on the books) support a lower price.