Confirmed breakout......or not

SPY - confirmed breakout?


SPY - Or not?
In either case, given the extreme overhead resistance, favor the downside over the intermediate term.


RIMM - potential low risk setup


XLB - trading range

Serenity Now

As difficult as it will be for me to tear myself away from this brainless market... the next seven days for me will be spent in the Yucatan talking to the fishes - perhaps acquiring Zen-like clarity of all things trading.

Given what I know today (i.e. strictly based on the charts), I will be favoring the downside over the next several months.

Intermediate Term

In the intermediate term...

AAPL







RIMM







UNG







CHK

Stocks above their 50 day MA

This chart shows the % of S&P 500 stocks above their 50 day MA.

A bounce is coming. It should have come today and it should come tomorrow - the problem is that this is hard to time under normal market conditions.

Note: it will be interesting to see if the short-sale ban actually gets lifted tomorrow and the effect it will have.
I would like it to get lifted because I think it will slightly help reign in option prices and bid/ask spreads.

Below are a few stocks to keep on the watchlist. You'll have to excuse the long-term charts but when so many securities are making global lows, it's necessary to zoom out to gain some relative perspective.


AAPL
AMZN
GOOG
JNJ
MA
RIMM
OXY
CHK

Nasdaq - not falling for it

I read a great quote this afternoon with regards to the latest Government Intervention:

"...this is terrible news for the housing market. Essentially, more than 75% of the financing for the housing market is now being controlled by the same morons who write welfare checks, or give free health insurance to illegal aliens. Our government will now be in control. Don’t worry folks, they’re the government..."

The Nasdaq does not appear to be falling for the government's latest pig lipsticking - with the Dow up 200, they're down 2 pts. These shenanigans will only further defer the inevitable, just as they have up to this point.

RIMM - false breakout to the downside?
May provide a short-term bounce if it stays above 101.46



AAPL - yoinks!

Watchist 09-05-08

Watchist 09-05-08

QQQQ
LM
GS
FDX
BIDU
RIMM
MA
CME
AAPL

QQQQ

.
.
.

late afternoon sell-off

With the way the markets sold off this afternoon and with some less than impressive earnings after the bell, I would certainly expect tomorrow to be a down day. This 'oversold bounce' for that matter, may be shorter than expected. If not, I still don't expect it to last too long. All of the major indices continue to point downward.



























ACI















AAPL













CME















ICE
















CELG












GOOG















MA
















RIMM














SOHU















POT
















FLR














GLD














UNG














GNK









.
.

Playing both sides

Consensus is calling for sideways action in the broad markets (138-145 for SPY, 46-51 for QQQQ) for the next few weeks but that doesn't mean you have to sit on the sidelines. I still like the idea of selling OTM credit spreads on SPY and ETFs, for example, but there are a lot of other opportunities out there on individual stocks. Here are a few thoughts for the short-term...

Apache Corp (APA) - breakout
Devon Energy (DVN) - breakout
AK Steel Corp (AKS) - breakout / recent bounce off 20 day MA
Research in Motion (RIMM) - breakout, possible consolidation before heading higher
Apple Inc (AAPL) - pullback / found support at 20 day MA
Halliburton Inc (HAL) - breakout
Exxon Mobil (XOM) - ascending triangle




Valero (VLO) - in a downtrend / overbought
Lehman Bros (LEH) - breakdown
Dryships (DRYS) - broke trendline / look to the 20 day MA for support - still very strong, just got overextended.







I like AAPLs chances of revisiting 200 by Q3. Consider picking up some OTM OCT Calls.

SPY | RIMM | LEH | IBM | HAL | FLR | DRYS | DOW

Another close above 1400 today - a meaningless milestone. The S&P has been chopping through this level since April 28th so it doesn't seem to be as significant as once thought. While the roundedness of 1400 may get a lot of attention, perhaps the trendlines shown below will prove to be more significant.


Here are some more thoughts...









A lot of nice setups but some will require patience. I would wait for a small pullback in DRYS, for example, before going long. Same with RIMM (especially with what's happening in after hours). These are up 5.5% and 7% today respectively, so while the setup still looks nice it's probably not the best point for entry. DOW is also getting overbought (2 day RSI of 93.5). I'll have some specific trade suggestions as this week unfolds.

FXI | MON | RIMM | POT

The following have been getting a lot of mention, forming some nice setups, and should be on your watchlist:



FXI - Huge breakout on big volume. FXI got as high as 160.90 before ending the day 157.61. Still overbought so be patient. Look for a small pullback and look to go long.







MON - Perhaps taking a breather...before rocketing past 140...









RIMM - has been drifting upward for a while but hasn't been able to breakout yet. It has a very low ADX reading, implying a lack of a trend. It still seems like it's formed a nice base and may be preparing for another leg up.






POT - Big red candle. I don't see any reversal in sight so maybe it will present an opportunity to those of us who missed the last 20 pullbacks.




Keep in mind these are just setups and not your signal for entry. You should have (or will need to develop) some criteria to help you identify your entry signals.

SPY | FLR | MMM | RIMM

Friday has left us overbought; however, a breakout scenario still seems imminent.

If (SPY) can in fact overcome 140 (should earnings continue to meet lowered expectations) 144 may be much tougher. To the right is a five year chart that helps illustrate why - basically 144 represents a key breach in an otherwise seemingly healthy 5 year trend.




Here is a
chart showing
the number of
S&P stocks trading
above their 200 day
moving average.



Below are some more stocks worth watching.

Fluor (FLR) - nice reverse head & shoulders pattern.
If this looks like a bullish opportunity to you, consider debit spreads or calls with an expiration of JUL or OCT and an initial price target of 170 (all-time high set back on Nov 26, 2007).









3M (MMM) - broke out to the upside and closed above 200 day moving average. Potential to revisit 86.







Research in Motion (RIMM) - might be getting ready to have another go at resistance.







Keep in mind some of these are currently overbought so you might want to be patient.


Here is a short clip I recommend watching. It provides a little insight into Dan Sheridan's thought process and how he might have played Google (GOOG) before earnings.
http://www.cboe.com/tradtool/webcast.aspx?movieid=36693&channel=1252