Watchlist Saturday

Here is my watchlist for the upcoming week. I have included a market posture as well. I indicate stocks that may be starting to go bullish (or bearish), or are bullish (or bearish) but are not quite ready in italics. I indicate stocks that are bullish (or bearish) but may be too extended short term, in parenthesis. I indicate stocks that are bullish (or bearish) and might be playable short term in a regular font. I indicate bullish (or bearish) stocks that appear to be close to a buy signal, or are giving a buy signal, in bold font. The bolded stocks are the most compelling to me because they may be a trade entry soon. I have abbreviated Intermediate Term (IT), and Short Term (ST).

Dow: IT Neutral to Bearish and ST Bullish to Neutral. The Dow held support at 12,425, bounced, and is now battling with resistance at 12,700 - 12,750. If the Dow rolls over, it will be making a lower low, and my posture will switch to IT Bearish.

SPX: IT Neutral and ST Bullish to Neutral. The SPX held above support at 1,370, creating a new support zone of 1,370 - 1,373. The current bounce has taken the SPX into the "round number" resistance area around 1,400. If the SPX rolls over, it will be making a lower low and confirming a Head and Shoulders Top, which will change my posture to IT Bearish.

Naz: IT Bullish to Neutral and ST Bullish to Neutral. The Naz held support in the 2,425 - 2,429 area, bounced, and made its way back towards resistance in the 2,537 - 2,551 area. If the Naz rolls over, I will change my posture to IT Neutral.

The ISM Index tomorrow needs to make some positive noise in order for the Market to sustain the current upswing. The estimates are for a reading of 48.0, which is still contractionary, but in-line with my current economic outlook of "not horrible and not brilliant" (contrary to the "experts" out there who keep telling us we are in a deep recession). If the ISM comes in anywhere from 48.0 - 48.5 it may not be enough to keep the indexes from rolling over in what would be normal technical selling. If the ISM comes in 49.0 -49.5, the market will probably pop up for another day or two before the technical rollover happens. If the ISM comes in 50.0 or above, we may be in for a substantial 1-2 day rally. And finally, if the ISM comes in 47.0 or lower, we may be in for a substantial 1-2 day sell-off. We shall see what tomorrow brings.....

Here is a chart of the SPX, which might confirm a Head and Shoulders Top:

(click on image to enlarge)

Here is a chart of the Dow, which might roll over at a lower high after a Double Top:

(click on image to enlarge)

Here is a chart of the Nasdaq 100, which might be forming a Bearish Divergence (somewhat similar, but not identical to the December 07 Bearish Divergence):

(click on image to enlarge)

Here is my Weekly Watchlist. Make sure to check the option spreads before paper trading. Ideally, I want spreads of .10-.20 cents on options for stocks between 20-200 dollars.

BULLISH SECTORS/GROUPS AND STOCKS:

Energy: WFT, NOV, NBR, HES, COP, PXP, OXY, SU, ECA, ESV, MUR, APC, FTI, VLO, PXD, HP, (BHI)
Coal: ACI, MEE, BTU, CNX, (FDG, ANR, WLT)
Steel: X, CLF, AKS, STLD, SID, RIO, (TS, GGB)
Aluminum: AA
Tech: ENER, INFY, CSIQ, VRSN, MBT, SINA, (SOHU, WDC, NIHD, AAPL, ADBE, RIMM, IBM, QCOM), GRMN, LDK
Manufacturing/Machinery: BUCY, JOYG, (ETN, FLS, PH, EMR, CMI)
Materials/Construction: MDR, FLR, FWLT
Railroads: (UNP, NSC, BNI, CSX)
(Credit Cards: (MA, V)
Note: AGU, MON, DHR, JEC, AMZN, NEM, AEM, AET, GILD, (LTR, ABT, TIF, RL, BBY), SKF, DXD

BEARISH SECTORS/GROUPS AND STOCKS:

Financials: MS, MCO, GS, MER, LEH, TROW, (ICE, NYX)
Oil Shipping: GNK, DRYS
Note: DIA, KSS, JCP, (ADM, UTX)
Also Note: If the market does roll over I will look to trade puts on DIA, SPY, QQQQ, and IWM, along with some Financials, Retail, and whatever else shows itself.

Note: I will be setting up a site with free video tutorials in the next week to week and a half.

Market Sputters Near Resistance

The Dow is in a Doji candlestick pattern mid-day, showing uncertainty as traders quietly battle around the 12,700 - 12,750 resistance area. The economic reports this morning were mostly in-line with expectations. The summary goes like this: consumer spending continues to hold up, and the economy is crunching along. The data suggest that the economy is neither caving in, nor incredibly robust. Sound familiar? This is what my analysis has been suggesting since January, when the news marketers were screaming that we were in a recession. So far, Alan Greenspan, Warren Buffet, Jimmy Rogers, and most major news organizations and political structures have been wrong about the economy. This continues to be another major lesson in why you should do your own analysis, follow the charts, and trade what you trust. Ignore the posturing and positioning of the people who are trying to sell news or gain political standing and trust what you see.

On the short term the market looks like it could be running out of steam, so I am nibbling in on some puts. I picked up a little more with a nibble on KSS. I also culled back some more of my Energy and Commodity stocks, although some of those stocks look like they still want to run. I sold BTU for a .05 cent gain, so basically a breakeven trade, I sold NOV for a .48 cent gain, and I sold MEE for a .58 cent gain. I still want a little exposure to Energy and Commodity stocks because some of them (like FWLT) look like they still want to swing up a little.

Most of the bullish movers I noted yesterday look like they are finishing out the move today, so if you have made some money, look to lock some of the profits down and tighten the stops.

1:30 pm MT: Here are some interesting Bullish Movers today: FWLT, FLR, TDW, PXD, LDK, DHR, ENER, and BEN.

Steel, Coal, and Tech are some of the better performers. Energy stocks and some Commodity stocks appear to be settling down and shoring up just a little as well. Retail and Financials are underperforming a bit today. I went ahead and nibbled a little on PXD calls.

Market Finishes Up on GDP Report

First Quarter GDP was revised higher as the economy grew slightly more than expectations. The market has caught a tailwind off the report, and the Dow is moving towards resistance levels around 12,700 - 12,750. The Oil Inventory Report showed a huge drawdown, which is normally extremely bullish for Energy stocks (and also inflationary). However, the Energy Department said that the supply drop was due to "temporary delays" in supply. As a result, traders don't know what the real supply levels are, and when traders don't know something, their First Commandment of Trading says Sell! So this is a knee-jerk reaction to the information vacuum. For now, I am going to see how it plays out before I do anything. My guess is this: now that the rest of the market is up today, traders are being driven to buy over there and continue to dribble away their Energy and Commodity stocks. However, if and when the market rolls down a little from resistance, then they will probably have a mini-rotation back, where they sell a little of the other stuff and buy a little Energy and Commodity stuff.

In the meanwhile, here is what I have done so far today: I sold AMZN into the little gap up this morning for a small, .17 cent gain. I also sold RL for a very nice 1.10 gain, or 19% profit from mid-day yesterday to this morning.

1:50 pm MT: I culled a bit with the Energy positions: I sold NE for a .90 cent loss, I sold BHI for a .22 cent loss, and I sold HAL for a .30 cent loss. I also sold WFT for a .40 cent gain. In addition, I started scaling in some puts on DIA and SPY.

8:30 pm MT: Market Wrap: Retail, Tech, and Financials were up and Energy and Commodities were down. FCX had a particularly nasty headfake, and could be headed lower. Solar Chips and Oil Shipping were the two worst performing industry groups today. Even though the Dow and SPX climbed today, they faded off the highs and threw Shooting Star type patterns. I started scaling in to puts on the DIA and the SPY as a result.

Here are some interesting Bullish Movers today: MA, V, GILD, JOYG, AET, INFY, SINA, VRSN, and ABT.

Here are some interesting potential Bearish Setups forming: DIA, SPY, KSS, GME, and FCX.

Energy and Commodity stocks look like they are headed for another couple of days of consolidation in the downswing. The big confirmed bounces in most stocks in those two sectors yesterday appear to be a failed signal today, we shall see tomorrow.....

The overall market may have another day or two in the current upswing, but I would be cautious of looking for the move to last much longer. Be selective with any call trades. There are some, however, like MA, V, GILD, and ABT that appear to have the legs for another couple of days of moving up. Remember that conditions are Neutral, so don't hang around too long in any of your trades.

Market is Quiet But Energy and Commodity Stocks are Hot

Durable Orders came in better than expected, and Oil futures are down a little pre-market, which is giving the stock market an early boost. The Naz is up a little stronger than the other indeces. I am planning on selling the RIMM and IBM calls right into the open, if those two stocks gap up a little. I may buy them back later if they float back a little.

7:50 am MT: I sold IBM at breakeven, although I left a little money on the table. I stopped VRSN for a .38 cent loss. I sold RIMM for a .95 gain, or 9%. I sold CLF for a 1.00 gain, or 14%. And I sold KLAC for a .39 cent gain, or 16%. I may re-enter IBM and CLF, but I will wait to see how they form up. So far, it has been a nice two days of trading.

8:25 am MT: I sold all three Energy stocks for a total gain of $400.00 or about .20 cents per trade. I am going to come back and look at Energy after the reaction to the Oil Inventory Report.

1:40 pm MT: Here is a summary of what I have done today after the last post. I culled AET at breakeven because I have too many trades going, I'm about to do the same with AMZN. I think those stocks have more room to move, but I'm loaded up on Energy and Coal right now. Which brings me to what I entered: I picked up calls on BHI, NOV, WFT, and PXP in Energy, and MEE and BTU in coal. I also picked up RL on the breakout. I have a lot of trades going right now and the Energy trades are making big bucks (I'm up about 4k in my account on the day), so I'm focusing more over in that area.

1:50 pm MT: I also picked up X, DO, and HAL before the close. I finished the day up almost 5k in my account. It's been a nice couple of days, but the best gains have been in Energy and Commodity stocks. The rest of the market is basically sloshing around right now.

6:30 pm MT: Throw a dart at your Energy and Commodity stock watchlist, chances are that you will hit a stock that bounced today. Here is a list of some of the big bullish movers in those areas today: remember to check the option spreads, look for .10 - .30 cent spreads.

Steel: CLF, RIO, AKS, GGB, X, SID
Coal: ANR, ACI, WLT, MEE, BTU, CNX
Oil Shipping: DRYS, GNK, TDW, EXM
Energy: CSIQ, UPL, BHI, OXY, MUR, ESV, RDC, WFT, NE, NOV, NBL, APC, DO, WMB, PXP, HAL
Aluminum: AA
Copper: FCX

Also bouncing: Chemicals, Manufacturing/Machinery, Lumber

Also: RL (breakout on huge volume), SOHU and IBM (followed through on yesterday's bounce), VIP (bounced), MA (bounced), FWLT (bounced), NIHD (followed through on the bounce), LTR (bounced), GD (bounced), MBT, FLR

There were a few other stocks that were noteworthy as well, but these one's, especially the bolded stocks, really caught my attention.

Today was one of those days where you run out of money long before you run out of ideas.....The bounce in Energy and Commodity stocks will continue to be a crowded trade (see: "desperate bullishness"), so it could have legs for another couple of days. It may not finish out until next Monday or Tuesday, but I will be taking partial profits a lot sooner than that.....

Remember, remember, remember, the overall market did diddly squat.....don't get too excited about areas that don't have Energy or Commodities in the prefix description somewhere. I'm in a few calls outside those areas, but 95% of what I'm doing is in Energy and Commodities during this swing. In fact, I'm really hoping the Dow can get back to 12,700 so I can load up the truck with some DIA puts.....

Christine reminded me of something important to pass along for your strategizing tomorrow. The Oil Inventory Report is due out at 10:30 am ET (8:30 am MT). It was delayed one day due to the Holiday. I am nicely profitable on the Energy trades, and was planning on scaling out of some of my Energy positions tomorrow morning anyhow, but the report is all the more reason to lock down about 1/4 of your position size and bring your stops up to breakeven. For those of you who aren't in Energy stocks yet, you can still watch the morning price action, if it gets too hot, you may wait for the Inventory Report (1 hour after the open) and see if you get an intraday pullback that holds before entering. However, we will have to see a pretty huge inventory buildup in order to kill the current swing. My guess is that the Big Money jumped on board today because they still like the fundamentals in Energy, we shall see.....

Market Holds Support For Now

The market is shaking off any bad news this morning and trying to make a little noise. I'm still a watcher and not a trader, but we'll see how the day shapes up.

7:50 am MT: I am watching the RTH (Retail), and TIF and AMZN. It's interesting to me that Retail is trying to make some noise today. In fact the anti-oils (Retail and Airlines) are making the biggest moves this morning.

8:00 am MT: I nibbled on TIF and AMZN calls. I am interested in BBY, but I don't want to get too loaded up in one area just yet.

8:30 am MT: I nibbled on some AA, VRSN, and AET calls. Except for a possible Energy and Commodity trade, I am positioned how I want to be in case the market bounces. Note that TIF has earnings in two days, so I am going to be out of those calls by tomorrow afternoon.

9:20 am MT: I stopped TIF for an .80 cent loss on half a position. The stock went from looking good to looking ugly pretty quick, and I don't have any time to mess with this trade with earnings coming up.

9:50 am MT: I picked up partial call positions on BHI and CLF, and I'm looking at getting one more Energy. After that, I'm probably done unless I see something extremely compelling.

11:30 am MT: I added small call positions on KLAC, RDC, and NE. Stick a fork in me, I'm done for now. Remember, I'm looking for quicker, shorter swings right now. So I want to be scaling out of many of these positions by tomorrow.

2:30 pm MT: Market Wrap: the Naz finished with a confirmed bounce today. I am targeting 2,500 - 2,505 as the first resistance, and then the previous peak from a week ago. Since the Naz was confirming, I decided to get small positions in RIMM and IBM to boost up my Tech exposure. Tech and Big Tech especially were, by far, the strongest areas today. However, Transports, and particularly Airlines were also very strong (although most stocks in those sectors are still in downtrends). I don't think the Dow can make a higher high, or even an equal high from here. It looks more likely that if the Dow does bounce, that the index runs into resistance in the 12,700 - 12,750 area.

8:45 pm MT: One last reminder, the Naz may be IT Bullish to Neutral, but the other indexes are more Neutral, and the Dow is sliding, even if it bounces. So keep your mindset straight, we are in a Short Swing Trade market right now, which means 1-3 days. I am planning on being out of part of my Energy calls before the Oil Inventory Report tomorrow. I'm also planning on scaling out of everything else as well, starting tomorrow. We'll see how this all shapes up.

Watchlist Saturday

Here is my watchlist for the upcoming week. I have included a market posture as well. I indicate stocks that may be starting to go bullish (or bearish), or are bullish (or bearish) but are not quite ready in italics. I indicate stocks that are bullish (or bearish) but may be too extended short term, in parenthesis. I indicate stocks that are bullish (or bearish) and might be playable short term in a regular font. I indicate bullish (or bearish) stocks that appear to be close to a buy signal, or are giving a buy signal, in bold font. The bolded stocks are the most compelling to me because they may be a trade entry soon. I have abbreviated Intermediate Term (IT), and Short Term (ST).

Dow: IT Neutral to Bearish and ST Bearish to Neutral. The Dow has minor support at 12,425, if that area doesn't hold Tuesday or Wednesday then look for 12,270 - 12,300. It is unlikely that the Dow can make a higher high from here, and it will probably make a lower high, which is why I designated its posture as IT Neutral to Bearish rather than just IT Neutral.

SPX: IT Neutral and ST Bearish to Neutral. The SPX has support at 1,370, if that area doesn't hold Tuesday or Wednesday then look for 1,350. The SPX could still reclaim its IT uptrend from here, but for now I am designating it IT Neutral on the lower low.

Naz: IT Bullish to Neutral and ST Bearish to Neutral. The Naz has support in the 2,425 - 2,429 zone, if that area doesn't hold Tuesday or Wednesday then look for 2,400. The Naz is the strongest of the three major indexes. I have designated it IT Bullish to Neutral instead of the technically correct IT Bullish (it hasn't made a lower high or lower low yet) because the other two indeces may drag the Naz down eventually. So I am more cautionary on the Naz than I might be otherwise.

The old saying in the market is "sell in May and go away," and we are definitely experiencing May selling. Summertime is usually less bullish than Fall and Winter in the stock market. However, I have seen many types of summer conditions over the years. I for one will continue to trade both bullish and bearish swings all summer. As for right now, I am looking for a possible bounce Tuesday or Wednesday. If the market does bounce, I will look at quick, 1-3 day type plays on Tech, Energy, and Commodity stocks, in that order. I really think the market is headed towards more consolidation this summer, so mentally I am starting to switch over to Short Swings, Day Swings, and 1-2 day Momentum Trades. Don't wring your hands about the Neutral conditions. The good news is that you can get in, get your money, and get to cash. It requires being on top of your entries a little more, and you probably won't be able to Momentum Trade late swings, but I don't mind at all being in and out of trades in 1-3 days.

Here is a chart of the Dow:
(click on image to enlarge)


Here is a chart of the SPX:
(click on image to enlarge)


Here is a chart of the Naz:
(click on image to enlarge)

Here is my Weekly Watchlist. Make sure to check the option spreads before paper trading. Ideally, I want spreads of .10-.20 cents on options for stocks between 20-200 dollars.

BULLISH SECTORS/GROUPS AND STOCKS:

Energy: WLL, NBR, BHI, NOV, SWN, ECA, PXP, RDC, HES, NBL, (SU, PXD, NE, CNQ, OXY)
Coal: (FDG, ANR, WLT), CNX, BTU, MEE
Steel: X, CLF, SID, RIO, (TS, GGB)
Aluminum: AA
Gold: NEM, AEM, ABX
Tech: LDK, QCOM, AAPL, CSIQ, PCLN, RIMM, ADBE, IBM, MBT, SINA, SOHU, VRSN, NIHD, ENER, GRMN
Manufacturing/Machinery: CMI, PH
Materials/Construction: FWLT, FLR, EMR
Railroads: NSC, UNP, BNI, (CSX)
Note: (SKF, SDS, DXD), BBY, AMZN, TIF, LTR, JEC, AET, QID

BEARISH SECTORS/GROUPS AND STOCKS:

Financials: TRV, STI, (MER, ICE, LM, GS, MS, NYX, LEH)
Transportation Services: (FDX, UPS)
Retail: (KSS, JWN)
Note: ERTS, AKAM, DIA, ZMH, MHP, UTX, CHK, GNK, NUE, CEG, VLO

It looks like the market is starting to get a bit oversold short-term. However, if the support areas I posted above don't hold Tuesday, we could be in for another day or two of dog-pile selling down to the next levels. I am going to be very, very selective about jumping on calls for an anticipated bounce on Tuesday or Wednesday. If it looks like the market is going to bounce tomorrow, I will only take a few positions, and take partial profits early in the trades.

Institutions Punch Out Early and Fade the Market

I started this post early so you can comment to one another even if I haven't posted any market content yet. I will pop in from time to time and post my usual information.

One quick note: I didn't realize that the site was set to Pacific Time. I changed it to Mountain Time. So all the headers before this one were created on a Pacific Time Zone stamp. Now they will all be MT. Not a big deal, and it doesn't affect the times on all my post entries, but I just wanted to make the note.

12:00 pm MT: Here is my assessment of today's price action: It's pretty obvious to me that Big Institutions planned to punch out early and then head for the door. The first two hours saw heavy volume selling, and then everything has trailed off since then. We may still get a little light volume floating at the end of the day, and we are definitely into a lighter volume drift right now. I just don't like to do a whole lot in these kind of conditions myself.

Another observation, which I was anticipating yesterday, was another pullback day in Energy and Commodity stocks. Big Money made a lot of money in those areas the past several months, and they locked a lot of it down and walked away. What it means is that I will start looking at those areas by the beginning to middle of next week. For now, there isn't much to do in a lot of areas except nibble on some Day Swings. Other than the fact that the drift is down a little harder early, this is going about how I though it would. I am still looking for 12,300 on the Dow, so I'm not getting super jiggy with calls until we get closer to those areas and the 3-day weekend is over.

7:15 pm MT: Market Wrap: the market faded off again today. The majority of selling was done in the first two hours, and then it drifted for the rest of the day. As for support levels, here is what to probably expect: If the Dow doesn't hold a minor support at 12,425 then look for the support level I have posted previously of 12,300. If the SPX doesn't hold 1,370 then look for 1,350. And if the Naz doesn't hold 2,425 - 2,429 then look for 2,400. It's a toss of the coin as to whether or not the market will bounce Tuesday. If it does bounce, I will look at Tech, Energy, and Commodity stocks in that order. I will do a Weekly Watchlist this weekend, as usual.

Market Stays Quiet All Day

10:30 am MT: There was a smattering of Retail earnings, some Financial news with UBS, and bits and pieces of other news this morning. None of the news today seems very important. That means that the market will probably continue its Technical move, which means that there is a good probability that we go down a little more. AAPL is a good proxy for what is going on. The stock was a relative leader early in the day and then just faded off.

Just as I stated yesterday, the Energy and Commodity stocks are continuing to roll over, which will put further pressure on the market, especially since oil prices are not coming down. It may seem like a drop from $135 per barrel to some number like $128 per barrel is a big relief to the markets, but think about the big picture, not just one day. Even if oil stays at $100 per barrel, that's high.....

One other note: I sold the last of the FDX puts today for a total profit of 13%. I really like the thought of doing some DIA puts or DXD calls if the charts form up right intra-day. I may not do anything myself because I'm taking parts of today and tomorrow off from work. I will be around this afternoon/evening to review how those might have turned out if I had done them.

7:30 pm MT: Market Wrap: today was fairly quiet in the market other than Energy and Commodity stocks continued to pull back like I speculated, which I posted yesterday. I still think those areas will have a little more consolidating on the short-term. Oil Shipping really got thumped. Tomorrow is shaping up to be a light volume floater. If we drop a bit early on, then things shore up, look for a slightly bullish to bullish floater the rest of the day. A light volume floater is where Fast Money are the main players and many Big Institutional Managers are already headed out to vacation. If we float early, look for some profit taking before the end of the day. Either way, don't expect a lot of volume.

Here are some interesting Bullish stocks for quick plays (even intra-day swings). If you do play some calls, don't hold a lot of stuff through the 3-Day weekend unless it goes really strong for you:

AET, NIHD, WDC, AAPL, DXD, MCK, DRS (not DRYS), FLR, FWLT, AMZN, VRSN, LTR, and SINA

The simplist Bearish plays, if they show themselves, are puts on the DIA or SPY.

There are no big Economic Reports or big name Earnings Reports tomorrow, so we really are in for a potentially quiet day, maybe quieter than today. If we get anything, it will happen on light volume, and part of the day, at least, I expect a Floater (light volume bullish move).

Market Selling Part Deux

Don't read too much into the open this morning. It looks like it will be fairly quiet. The market may slosh a bit, but I won't be surprised if it takes the first hour for the market to even begin to decide what it wants to do today.

8:35 am MT: The market may be tipping its hand right now. A brief rally just a moment ago was just met with a round of selling. Traders are still doing battle, so it's not over yet, but the Bears appear to have a slight edge right now.

12:45 pm MT: The market is confirming today's selling, and the Dow broke a Double Top. The Dow went through the 12,750 - 12,700 zone and immediately dumped to 12,600, which was my next target. Right now the Dow is at 12,600 and trying to hold the 50dma.

I stopped the MOS puts early in the day for a 12% loss. I scratched the LM puts early in the day at breakeven. I locked and walked on the MS puts for a 19.5% gain. I locked and walked on the RTH puts for a small 5% gain. I locked and walked on the MER puts for a 32.5% gain. I also did two intra-day put swings on the DIA and the SPY. I made an 8.5% profit on the DIA puts intra-day, and I made an 11% profit on the SPY puts intra-day.

I am also scaling out of my last put, which is FDX. I have made about 17% profit on the trade so far. I am going stock hunting right now to see what I want to do before the close.

1:00 pm MT: Here is a comment from the news on why the market sold off intra-day. "Market participants are concerned over the negative FOMC meeting minutes, with the Fed cutting its growth forecast and raising its inflation expectations. Several FOMC members said that it was unlikely that they will ease policy in the near term, even if the economy sees a contraction." Ok, seriously folks.....Is there anyone in the know universe that couldn't see that one coming?!? The Fed cut rates way too much and over-fixated on the short end of the Yield Curve, which hyper-stimulated an already inflationary Energy and Commodity area, which has now attenuated Consumer Spending, and left the Fed with no more ammo to shoot at what they shouldn't have been shooting at in the first place!!!.........Aye yi yi yaaooww! How could the entire galactic universe of all known life forms, including sensient and non-sensient beings NOT see that one coming? Sheesh, I don't know what to say anymore. Traders sold off on that news?? Well, it is what it is. My job is to just trade it and not question it......

1:20 pm MT: by the way, AAPL is headed towards the 30dma.....

1:50 pm MT: I have gone through about 200 stocks and my own watchlist, and I'm just not in the mood to do any calls or puts on anything I see. I don't feel like Cherry Picking calls right now, it doesn't look right. And I want some kind of intra-day bounce tomorrow before I potentially do another round of put trades. So I'm just sitting tight into the close.

7:30 pm MT: Market Wrap: The Dow broke a small Double Top and headed right to the 12,600 support that I posted yesterday. If the Dow doesn't hold 12,600 look for 12,300. The SPX is sitting right on the 30dma, if this area doesn't hold, look for 1,370. The Naz is probably headed for 2,430.

Here are some interesting Bearish stocks (that might not be too far into a downswing) if the market continues selling for another day or two: ADM, PNC (target 64.50), TRV (possible target of 48), STT (target 68, then 66), DIA (if today's lows don't hold, target 123), KO, AGN, KMB, STJ, ALL, and UTX. Also: VLO and SUN may roll down if the Energy sector finally pulls back.

Note: the DXD is the short Dow and it broke out of a Double Bottom with heavy volume today.

Here are some interesting Bullish stocks if the market pulls back and they hold supports: VIP, SINA, VRSN, TIF, and AAPL (right at the 30dma).

Note: LDK is very strong, even in the face of market selling.

I didn't include any Energy or Commodity stocks on the bullish watch because they look like they are just beginning to pull back. It looks like we will possibly have another couple of days of pulling back in those areas.

Market Confirms Short Term Rollover

Oppenheimer stated that Banks may still write off more than $170 billion of additional reserves by the end of 2009. And here's a big surprise.....inflation is up.....Core PPI came in higher than expected as producers deal with higher costs. Meanwhile, Oil hit a new high above $128 per barrel after Boone Pickens became the latest "guru" to throw his hat in the ring (along with Goldman Sachs) for Oil hitting $150 per barrel.

So there you have it, Oil and Inflation Up, and Financials with more write-offs to come. The market will probably be down a little bit early in the day, and we may have a short term pullback in the markets for a couple of days.

7:50 am MT: I stopped out of the PCP calls for an .85 cent loss, or 18%. I stopped out of the VMW calls for a .90 loss, or 30%. I am riding the 5 puts from yesterday. I added a little more to the CF puts, and I'm getting ready to add a little more to the MOS puts.

8:40 am MT: I added a little more to the MOS puts. I also nibbled in puts on RTH. I am also looking at possibly picking up a little of one or more of the following: LM, FDX, MS, JPM, HIG, or ALL. I'm not sure yet.

8:55 am MT: I nibbled on FDX puts. I'm not super excited about the strength in the Chemicals right now, so I'm watching those pretty close. One thing to keep in mind, I don't want to get too loaded up on puts for two reasons: the first is that the market is still more bullish than it is bearish, and the second is that I don't want to underestimate the desperation of bullish traders this year.

9:15 am MT: I scratched out of TRA for a small .05 cent gain. I want a little less exposure to Chemicals right now. It may be that the Chemicals drop sharply from here, but I don't want to hang around the "Desperate Bulls" with my puts, so I culled a little.

9:35 am MT: I culled out CF for an .80 cent loss, or 8%. I still think Chemicals will go down a bit, but I only want to play puts on MOS for now. I also picked up puts on LM and MS to give me enough trades after selling the two Chemical puts.

12:30 pm MT: It looks like the market will start dropping again in the last 90 minutes after a mid-day consolidation. This is just how you draw it up for a fade into the close. I will continue to run with all my puts. Watch MER, it is getting close to my first target area around 45.00 - 45.50, where I will sell half the puts.

1:15 pm MT: I set a stop at breakeven on HPQ, which took me out. So that's a scratch trade. As for the market, it's still hanging around, but it may not make much noise either direction between now and the end of the day.

2:00 pm MT: This is a preliminary Market Wrap: The Dow and SPX confirmed their Shooting Stars, and the Naz confirmed a rollover/Hanging Man. The probability of the downward move I spoke of yesterday played out today. The first Naz support level is 2,465, if that doesn't hold then the next one down is 2,450. The first Dow support level is 12,750, if that doesn't hold then the next one down is 12,700, and if that one doesn't hold then it may go to 12,600. The first SPX support level is 1,404 - 1,400, if that doesn't hold then the next one down is 1,385 -1,387. Note that the Dow has changed the IT trend posture from Bullish to Neutral today. This doesn't mean a whole lot by itself, but could be a possible warning flag. The SPX and the Naz are both still IT Bullish. A good way to think of the market posture is this: the market is still more Bullish than it is Bearish, but not by quite as much as before today. I am still emphasizing calls over puts for the time being.

7:00 pm MT: After going through all the major indexes and about 700 stocks today, here are some notes on what I see. Energy (and some Commodity) stocks have had an almost unbelievably bullish run to date. I don't know how much more Parabolic they can go. Gold stocks like ABX are reversing bearish trends.

Here are some interesting Bullish Movers: SKF (Short Financials ETF) bounced out of a Bull Flag, ABX broke out of a Double-Bottom, and PX bounced out of a Bull Flag. Also: WY, LUK, and TIF look intriguing.

Here are some interesting Bearish Movers: FDX and HIG bounced down from Bear Flags. Also: ALL may start a Head and Shoulders top, KO may bounce down from a Bear Flag, TRV is starting to break its uptrend line, NYX broke its uptrend line, and ZMH looks interesting.

The market really looks like it has one more down day in it, it might have more, but at least one more day to reach key support levels. I may be wrong, it may turn and burn from here, but it looks like we haven't reached support yet. You can get a sense for it by looking at the Dow and SPX index charts.

One last note: all of you are doing a great job supporting one another with your comments. I just wanted you to know that I have always been pleased with the comments, and I have never had to delete a comment. Think about that for a moment.....and you will realize that you are really being a tremendous strength to your fellow traders. If you have friends, acquaintances, or even people you just met at some kind of activity, and they are struggling with their trading, they are welcome to join this "trading family." Keep supporting one another with your comments. I am amazed at how much of a trading support group this has become, and so much of it is because of your genuine concern and efforts for you fellow traders.

Market Jumps Early and Dumps Late

Crude Oil is trading up slightly pre-market, which may create some early buying interest in Energy stocks. Financials may be down early on a Citigroup downgrade of the Brokers, specifically GS, LEH, and MS. That's the pot calling the kettle black if I've ever seen it, but it's probably the truth, so C may have had to do the downgrade to maintain credibility. Note that GS and MS are on my bearish watchlist for the week, and that many Energy stocks are on my bullish watchlist for the week. If we get a gap up in Energy stocks this morning, I might be selling a little of my call positions.

7:45 am MT: I am busy culling out any calls that aren't Energy or Commodity related. I stopped COH for a .50 cent loss, or 17%. I stopped VZ for a .47 cent loss, or 22%. I scratched STP for a small .07 cent gain. I may enter STP again if it breaks the little Flag it's in right now. VMW looks like it could be a Rising Three Methods, so I'm going with it for now.

I am also starting to take a little profit in some Energy/Commodity calls. I locked and walked on the STLD calls for an .83 cent gain, or 21% profit. I locked in part of the XTO calls for a 1.00 dollar gain, or 32% so far. I locked in part of the WMB calls for a .42 cent gain or 19% so far.

8:25-8:35 am MT: I locked in part of the BG calls for a 1.22 gain, or 19% so far.

9:00 am MT: I sold some more XTO, which is now a 1.09 gain, or 35% profit so far. I sold part of the UPL calls for a .50 cent gain, or 14% profit so far. I also cleaned out my AXP calls for an .84 cent loss, or 34% on a half-sized position. I nibble back in to STP with July calls. I only picked up a 1/3 size position for now.

9:45 am MT: I sold some of my BHI calls for a .50 cent gain, or 13.5% profit so far. I also locked and walked on UPL for a .52 cent gain, or 15% profit on the completed trade.

Here are some strong bullish movers today: AMZN (I took this off my Bearish watch today), CAT, VIP, PXP, STP, CCJ, CSX, ETN, RRC, BA, SU, UNP, MEE, MUR, NSC, AA, and DO. There are more, but these are some of the bigger movers. The Dow is really being driven by CAT, BA, and MMM. I may look at one of those three for a potential trade today.

11:20 am MT: I locked and walked on the WMB calls for a .45 cent gain, or 20% profit on the completed trade. I locked and walked on the XTO calls for a 1.50 gain, or 48% profit on the completed trade. I locked and walked on the BHI calls for a .62 cent gain, or 17% profit on the completed trade. I'm all out of the Energy and Commodity stock trades from Friday, except a little of BG, which I will probably take out later today.

12:00 am MT: Traders are taking some profits right now, and some stocks dropped pretty quickly. There's nothing quite as exciting as a a dog pile in and a dog pile out..... There isn't anything huge going on yet, but I sold STP for a break-even trade, and I sold the last BG as well. The final tally on the BG trade was an .87 cent gain, or 14% profit.

12:15 pm MT: Watch this selling closely. This may be it for the short-term upswing, just like I was warning for several days. I was looking for Monday afternoon or Tuesday morning as the possible end of the swing, and it may be happening right now. It looks like the Lab Chart Technician rang the bell again, and all the Monkeys took their pellets and went home. Look no further than Big Tech for the intra-day selling, and that, of course means our favorite cult stock AAPL. But this is going across a lot of sectors. After-the-close post: It looks like some cautious comments from SNDK acted as a catalyst for the profit-taking. I think trader's were just looking for an excuse anyway.

1:45 pm MT: I bought half-sized put positions on MOS, CF, TRA, MER, and HPQ. Other puts that look intriguing, but I didn't trade: ICE, LM, MON, POT, and OI. Of the call plays that I was looking to possibly enter, the only two that even put a blip on the radar screen for me were AMZN and BA, and I'm not doing either right now. The market may decide to pull back now, possibly for another couple of days, we shall see.....

4:30 pm MT: Market Wrap: Well.....I not only warned of a possible topping out on the short-term upswing, but I traded it that way live, in front of you, all day long. If you want to know the difference between who's real and who isn't, see who is willing to not only analyze the market, but to trade it live, right in front of you. And then watch to see if they do it over, and over, and over again.....day in and day out, week in and week out, month in and month out, and through all market conditions. I could fill up the Grand Canyon with people who "teach" trading, and are so called "experts." But let's see them put the rubber on the pavement every day, every month, under every market condition. I'll let you in on a little secret. The ones that do it for real, and really show you how, that's less than 1% of the people out there.

Anyway, I diverge.....The Dow and SPX threw Shooting Stars today. The Dow and SPX climbed one Shooting Star in this current upswing, they are unlikely to do it twice. Anything can happen, but we are likely headed for a short term pullback. The Naz is at an important short term support point, if it drops below 2,500 it will break a short term horizontal and diagonal trendline, and will likely head for the 20dma around 2,460 - 2,465. As for the SPX, a drop below 1,420 probably takes the index to 1,405. If the Dow drops below 12,950 then it's probably headed towards the 12,750 - 12,800 area. Perhaps the market will climb another Shooting Star and really go for it on the current upswing, but probability dictates that we are likely headed for a pullback. We shall see.....

I am still IT Bullish on the markets, but ST Neutral to Bearish. I will probably be waiting for a couple of days before I enter any new call positions, we shall see again.....

Watchlist Saturday

Here is my watchlist for the upcoming week. I have included a market posture as well. I indicate stocks that may be starting to go bullish (or bearish), or are bullish (or bearish) but are not quite ready in italics. I indicate stocks that are bullish (or bearish) but may be too extended short term, in parenthesis. I indicate stocks that are bullish (or bearish) and might be playable short term in a regular font. I indicate bullish (or bearish) stocks that appear to be close to a buy signal, or are giving a buy signal, in bold font. The bolded stocks are the most compelling to me because they may be a trade entry soon. I have abbreviated Intermediate Term (IT), and Short Term (ST).

Dow: IT Bullish and ST Bullish to Neutral. The Dow has resistance in the 13,050 - 13,150 area, and is in more danger of an IT trend change than the other two major indexes because it has not made a higher high yet. The Dow is definitely the laggard of the three major indexes right now.

SPX: IT Bullish and ST Bullish to Neutral. The SPX has resistance in the 1,430 - 1,445 area. The current upswing has been strong, but it is getting a little long in the tooth now.

Naz: IT Bullish and ST Bullish to Neutral. The Naz has resistance in the 2,540 - 2,550 area. The Naz has been the strongest major index lately. The Nasdaq 100 has been even stronger. The current upswing has been very bullish, but it is also getting very long in the tooth at this point.

Big Tech, Energy, and Commodities have been leading the way for the past 6 weeks. The Mid-Caps (and to an extent Large-Caps) have also been strong (quite a bit stronger than Small-Caps and Mega-Caps), probably because of buying interest in Energy, Commodity, and some Tech stocks in those size ranges. The current upswing on the Naz (and especially the Nasdaq 100) is really looking extended. The SPX swing might have another day or two because of Energy and some Commodity stocks, but I'm not looking for the current market upswing to last beyond Tuesday. It may finish out on Monday or Tuesday morning.

Here is a Grid Chart of the Three Major Indexes along with the Nasdaq 100:
(click on image to enlarge)

Here is my Weekly Watchlist. Make sure to check the option spreads before paper trading. Ideally, I want spreads of .10-.20 cents on options for stocks between 20-200 dollars.

BULLISH SECTORS/GROUPS AND STOCKS:

Energy: ESV, MUR, OXY, NBR, RDC, DO, RIG, NOV, MRO, PDE, NE, EOG, XTO, UPL, APA, WMB, BHI, (SU, CAM, HES, CNQ, NBL, ECA, SII, PXD, APC, FTI), SLB
Coal: ACI, (CNX, BTU), MEE
Transportation Shipping: (DRYS, EXM, GNK, DSX), ATW
Metals/Mining: (ANR, WLT, FDG), CCJ, PCP
Steel: MTL, STLD, RIO, AKS, (SID, GGB, X, CLF, TS)
Copper: FCX
Aluminum: AA
Tech: (CSIQ, ENER, ADBE, AKAM, RIMM, SOHU, SINA, ADSK, IBM, AAPL, INFY, VRSN), FSLR, CTXS, SPWR, STP, VMW
Manufacturing/Machinery: (CMI, PH, JOYG, FWLT, EMR, FLR), IR
Materials/Construction/Lumber: LUK, WY
Railroads: (UNP, BNI, CSX, NSC)
Agriculture: BG
Some Chemicals: (APD)
Some Financials: (MCO, LTR), V, MA, AXP
Some Retail: JWN, TIF, COST, (COH)
Note: VZ, T, FMCN, (JEC, CVS, MHP, DRS)

BEARISH SECTORS/GROUPS AND STOCKS:

Some Financials: HIG, STP, GS, MS, MER, ICE, LM, ALL, (AIG)
Note: VLO, SUN, HPQ, CEG, AMZN, ADM, DE, ZMH, ERTS, (FDX, UPS, JNJ)

Market Hanging in There or Hanging Man

Two "R's" are spoiling the fun in the market today. Regional Banks and Retail. The market is either "hanging in there," or the short term upswing is getting close to being tapped out and the market is throwing a "Hanging Man" candlestick pattern. We probably won't know until Monday at the earliest.

For now, I am culling and mulling as we go into the weekend. I sold the last of the FWLT calls and locked down a 47% profit. I also culled out NYX for a 10 cent loss, so basically a breakeven trade. I am only holding half position on one Financial stock, I really don't like that sector any more than I did earlier in the week. I only have one smaller position in a Retail stock, and I'm not sure I like that sector much more than I did earlier in the week either. I have several Tech and Tech related positions, and two Energy positions. I did nibble in on VMW today, although the spreads are a little wide on the position that I took (30 cent spread). I also nibbled a little on NOV, and nibbled a little bigger on XTO.

I didn't get RIG, DO, LUK, or some of the others that I mentioned yesterday because they gapped away this morning, and I would have been a seller, not a buyer. I really should have caught those before the close yesterday. That's how it goes when I can't watch the market all the time because of my job.....As it is, I am only holding a couple positions going into the weekend, and I still may sell one or two more before the close.

1:15 pm MT: I sold the NOV calls for a quick 5% gain intra-day. I am still holding XTO because it looks good. I also nibbled in on PCP, which is in a Bull Flag. I made a small gainer on it earlier in the week, and I just picked up the same option a dollar cheaper, so I'm in good shape.

1:50 pm MT: Here are some stocks that I may pick up calls on before the close: UPL, BG, XTO, STLD, WMB, and BHI. I may not do all of them, but I will do a couple.

1:55 pm MT: I picked up half-sized positions on all 6 stocks (I picked up the XTO earlier in the day).

Market Shuttles Past the Shooting Star

The preponderance of Economic Reports this morning have managed to keep from damaging trader's expectations. None of the reports came in catastrophically bad, and the Philly Fed actually beat expectations a little. I'm not looking for the Moon out of the current upswing, but it may hold for another day or two. Still, I'm scaling out of some of my positions as this swing continues to fight along.

11:40 am MT: I stopped out of the GS calls for a 35% loss. I took some more profits on the FWLT calls, which are a 31% gain so far. I am looking to some of my profit on COH if it hits 38.00, and NYX and VZ look pretty good so far. STP is a little fussy, but I have seen these kind of breakout tests before, as long as it holds support I'll stay with it. I did pick up a half-size position on AXP when it crossed the 50.20 area. Since then it has collapsed back down a little. I will only pick up another half on a close above 50.50 - 50.75.

1:45 pm MT: I took some more profits on the FWLT calls, which are now a 42% gain so far.

7:15 pm MT: The market overcame the Shooting Star sell-off from late in the day yesterday. This is a nice little bullish sign for the next several weeks. It may mean that we still have a day or two in the current upswing, and that we may get a higher low on the next pullback. There was no single catalyst for the buying, which is actually a good thing. Traders are staying bullish, and therefore the market is staying Intermediate Term Bullish. High Energy and Commodity prices may eventually catch up to the market, but traders are buying for now, which means that they may keep buying on and off throughout the next several weeks.

I am looking at calls on all of the following stocks for tomorrow: LUK (breakout), RIG (bounce), and DO (bounce). In addition I am going to pick up NOV if it bounces, and I may pick up one or two of the following: JCP, VMW, and FMCN. I don't want too much stuff at one time, but I want enough in case this swing goes another day or two.

Market Bumps Early and Fades Late

7:25 am MT: The Consumer Price Index came in slightly better than expected, or in other words, consumers experienced less inflation than expected. This will give the market a short-term boost. I'm not looking for a long-term effect, however, because I can see Energy and Commodity inflation everywhere I go, with my own two eyes, regardless of what the Government Report shows.

FRE beat earnings estimates with a less-than-catastrophically-bad report of -66 cents per share vs. the -93 cents per share expectation. The report will probably give Financials a small tailwind this morning.

The net, net on all this is that the market is getting a boost, the Naz is poised to break above an important short-term resistance area of 2,500, Financials may at least not get in the way, and the current market upswing may continue for another day.

7:45 am MT: I have been busy selling parts of my call positions into this bump up early in the day. I will give some tickers and tallies in a few minutes when I'm done. I'm also holding off on any energy calls since we got a little gap and fade on stocks like CHK. I'm not sure I want to play those yet.

8:00 am MT: I locked and walked on EMR, EXM, IBM, PCP, half the Q's, half the SPY, and half ADBE. I also took a little more profit on FWLT. I'm holding just a little Tech, and I have some Financials in case we move in that area some more today. Here are the tallies: IBM was a 5.6% gain, EMR was a 34% gain, PCP was a 5% gain, EXM was a 47% gain, ADBE is a 12% gain so far, SPY is a 17% gain so far, the Q's are a 12% gain so far, and FWLT is a 26% gain so far.

8:03 am MT: I posted this just a few minutes ago, but I can't emphasize this enough, watch this gap and fade carefully in Energy and most Commodity areas. We gapped this morning and immediately traders took profits. I think I may wait for the Oil Inventory Report in a couple of hours before I decide whether I want to do an Energy play today. Watch CHK as a proxy for what's going on there today. It just Hammered on the 5 minute charts as I was typing this and instead of bouncing exactly where it should, the Hammer failed. There may not be a play in Energy before the Inventory Report, we shall see.....

8:55 am MT: I nibbled in NYX and I'm looking to get into COH. I'm also looking closely at STP, SPWR, INFY, and VZ among other stocks today.

10:00 am MT: I picked up calls on COH and VZ. I am still looking closely at STP and SPWR, but I want them to Flag on the 30m charts for a couple of hours intra-day, otherwise I probably won't get in on a "chaser" entry.

1:45 pm MT: I sold the last of the ADBE, SPY, and Q's calls. Here is the final tally for those three trades: ADBE was a 15.5% gain, SPY was a 16% gain, and the Q's were a 10% gain.

By the way, for those of you wondering what the catalyst behind the late day sell-off was, look no further than our favorite Cult Stock AAPL. Check out the 5m chart intra-day and you'll see some serious dumping. GOOG did the same thing. It looks like the main theme with traders was to dump the Big Cap Tech stocks in the last 90 minutes. And dump they did.....

7:45 pm MT: Market Wrap: The tame CPI report gave the market an early boost. The market was chugging along just fine until some technical levels triggered some selling, especially in Big Cap Tech stocks. The Dow hit 12,993 (13,000 was the round number trigger), the SPX hit 1,420 (the previous peak high was 1,422), and the Nasdaq 100 hit 2,028 (the top of the Bearish Gap which lead to the support breakdown on January 4 was 2,026). In addition, the last Naz upswing was 93 points (0r 3.86%), and the current Naz upswing looks like it may max at 99 points (or 4.07%). It looks like the Lab Chart Technician rang the bell and all the Monkeys took their pellets and went home. Therefore, I locked up my little pellets and walked away.

I am still holding calls on COH, VZ, and FWLT, and I picked up some STP before the close. I like those positions for now. I managed to pick off two of the top three movers from my trading universe today.

Maybe the market will take another look at today's technical areas tomorrow, but if we get close, some more Monkeys may take their pellets a little faster than they did today. Nothing like a little conditioning to train the.....well, you get the idea. JCP and URBN will announce earnings before the open tomorrow, so that will affect COH a little. Tomorrow is also the busiest economic reporting day of the week. Expect Industrial Production/Capacity Utilization, the Philly Fed, the NY Empire State Index, and Weekly Jobless Claims to aggregately affect the market. None of the reports by themselves are big movers, but taken together they will have an affect.

The last thing I'm going to say is this: Can you see why I have been pounding the table several times over the past week to keep your trading to Short Swings? When things looked great this morning, what was I doing? I was locking down left and right! I was right about the current market conditions, and I nailed the correct swing strategy for my trades this week. I have a lot of trades from the past several days, and all have been profitable so far because I was willing to take profits sooner, rather than looking for full, 3-7 day swings. This is once again a huge lesson in assessing from the Top Down and applying the correct strategies from your trading arsenal for the current market conditions.

Retail Tries But Financials Flop

WMT beat earnings estimates by a penny, but dropped a bit at the open. The Retail Sales Report came in better than expected, but the market impact has been muted so far. It looks like the Retail Sector may have at least stayed out of the way of the potential upswing that started with the bounce yesterday.

7:40 am MT: I sold the rest of my RIG puts into the drop this morning for a 24% gain. I stopped out of the MUR puts for a 14% loss. I stopped out of the APA puts for a 3% loss. And I scratched the XTO puts for a slight gain. I locked down a little of the EMR calls for a 29% gain so far.

7:50 am MT: One of the really frustrating things with the market conditions since the middle of January, and the Fed cuts, has been the lack of sustainability. Stocks don't follow through with full swings very often, either up or down. Every little move, either bullish or bearish, and somebody is ready to sell. You've heard me describe this as a "Day Traders Market" before. It may not be quite that Choppy, but it's not too far off. It can be tough on new traders. The key is recognizing current conditions and adapting. Yesterday I posted that I am in more of a Short Swing mode right now, and there is nothing about today that is changing my opinion. I will, however, look to play a bounce on the Q's, or another stock or two, for a second stage in the current "potential" upswing. I won't be looking for a 3-7 day trade, I will look for a 1-2 trade.

8:15 am MT: I picked up some Q's calls, and I also picked up some FWLT calls on the breakout. Also, VZ and PCP may be trying to bounce today. I nibbled a little on PCP calls.

9:00 am MT: This is an important price area intra-day for the Naz and SPX. I want to see the SPX hold 1,395-1,396 and the Naz hold 2,470-2,472. I also want to see this market pick up some momentum into the end of the day. Obviously, what I don't want is another fussy swing. Even a short swing of 2-3 days will be fine.

12:30 pm MT: I locked down a little of the FWLT calls for a 23% gain intra-day. I'm still holding most of the position. I locked down a little of the IBM calls for an 11% gain so far. I'm looking to lock down a little of the EXM calls before the end of the day.

3:00 pm MT: Retail gave it a shot today. The old saying is "Lead, Follow, or Get Out of the Way." Retail did the right thing and got out of the way so Tech, Energy, and Metals/Steel/Mining could continue to lead. Financials, well.....Uncle Ben gave us the good news that his Big Intervention hasn't done the trick yet. So Financials "Got in the Way", which makes me cautious of the current upswing. I think it may have another day or two in it, but I will be ready to lock down profits quickly if the market is sloppy tomorrow.

Here are some notable Bullish Movers from today:

WLT, JEC, CNX, PCP, CHK, CLF, APA, OXY, HAL, APD, PX
FSLR, FLR, BTU, ANR, ACI, CMI, HES, FTI, WFT, NE, NBR, NOV, PXD, EOG, APC, SLB, PXP, AKS, CSX

I may look at some of the bolded stocks above for a quick, 1-2 day trade

Here are some notable Bearish Movers from today:

BG
XTO, NDAQ, MON, POT, CF

Energy and Tech led the market today. I like the Tech part, but if we continue to get leadership out of Energy and/or Commodities for several more weeks, and Financials (and Retail) lag, then the Stock Market will probably have a tough time sustaining a bullish trend throughout the summer.

One last note, WMT is done for now, the trend is consolidating.

Market Bounces

The headlines this morning, "MBI had massive write-offs and FDX guided down fourth quarter estimates" are not really affecting the markets. It looks like the "Technical" move is still in play, which is a continued drop in Energy and Commodity stocks, continued caution in Retail and Financial stocks, and some continuation of nibbling in Tech stocks. However, Tech is bouncing, along with certain areas of Energy and Commodities, so the market is trying to make a little noise to the upside. This may finish as a positive day.

8:00 am MT: I time stopped AKAM calls for a 45 cent loss, or 11%. I locked and walked on the last of the CL puts for a 1.14 gain, or 41% profit. I took a little of my profits on the RIG puts, which is a 1.19 gain, or 14% so far. I took a little of my profits on the APA puts, which is a 1.35 gain, or 19% so far.

9:00 am MT: I stopped out of MON for a 22% loss, and I stopped out of MOS for an 11% loss. Right now, it looks like the same old story, Energy and Commodities are almost becoming a "safe haven" play for Fund Managers. They are having a pretty bad year, so they continue to park their money where they think that they can get some long-term return.

9:45 am MT: I locked down the last of the ADM put play for a 29% gain on the trade. I stopped out of BHI for a 20% loss, and I stopped out of CF for a 21% loss. I am in the process of scaling out of most of my positions, both bullish and bearish. The market may bounce today, and carry through for a couple of days, but I don't want to be holding too many trades. I think that we could be in for a quiet period, and then some volatility. I'm not sure I believe what is going on right now. I want to participate, but I only want to do it with a minimal amount of positions. We could go back to being a little stronger to the bullish side, so I may play some more calls today, but I am going to tread lightly.

10:15 am MT: I picked up some IBM and EMR calls. I may pick up some RIMM and Q's calls as well. I am still riding the XTO, RIG, APA, and MUR puts, all of which still look pretty good. As far as the Chemical stocks, they just never picked up any momentum, and continue to get quieter and quieter. And I just can't bring myself to play any Energy and Commodity stocks to the upside, although ECA, DRYS, TS, and ANR have some good momentum today. Maybe I might nibble at some calls in a couple of those stocks, but I haven't decided yet.

1:00 pm MT: I picked up some EXM and GS calls a little earlier. It looks more and more like the Naz and the SPX may confirm a bounce today. Financials and a few Retailers (led by WMT and COST of course), are joining the Tech party, which is a good sign. Maybe this bounce can carry through for a couple of days. I would go in a little heavier, but the Dow is lagging, and Energy and Commodities are lagging a bit. So we may not have a huge, broad-based bounce, but still, we may have a bounce worth playing for a few days.

1:30 pm MT: I nibbled in on some AXP, SPY, and ADBE calls to get a little more Tech and Financials, although I don't want a lot of Financials right now.

4:30 pm MT: The major indexes bounced today, with the Nasdaq and Big Tech leading the way. Mid-Cap Stocks were also very strong. The lagging index is the Dow, which consists of many Cyclical stocks. The SPX held 1,385, which was 3 things: a horizontal support line, the 20dma, and a Fibonacci Retracement level. Volume was below average, which doesn't matter as much for a bounce, but does lead me to believe that we will probably only have a 1-3 day bounce. WMT reports earnings tomorrow before the open, and will probably give the market a boost - if the big Retail Sales economic report tomorrow doesn't come in substantially worse than expected. Remember, though, I have been warning that WMT and COST will be the best performing Retailers in an environment of attenuating consumer spending. So it's possible that we get a modest, to even slightly worse than expected Retail Sales number, but WMT does a great job with earnings and the market continues its "Technical" Bounce. If that happens, and the CPI report comes out inflationary on Wednesday, then I will look for the current rally to be just what I think it is, a 2-3 day upswing, maybe 4 days max, and then done. In other words, I think that it's likely that this upswing is a "this week" type of upswing, not a "this week and into next week" type of upswing. So I am playing calls on it accordingly. Most of the calls I'm trading, I expect to be out of in the next couple of days.

I'm in more of a "prove it to me" mode right now with the market, both calls and puts. I'm looking for stocks that have momentum already and have confirmed a move, or are close to confirming towards the end of the trading day. Then I want to hop on board, ride it for another day, and be out of at least 1/3 - 1/2 the trade. I don't see anything to tell me to ride the swings for 4-7 days right now. So I switched out of Cherry Picking mode to Short Swing Momentum Trade mode. Maybe that will all change, but I'm comfortable with my strategy right now for the current market conditions.

Watchlist Saturday

Here is my watchlist for the upcoming week. I have included a market posture as well. I indicate stocks and sectors that are either beginning to go intermediate term (IT) bullish/bearish in parenthesis, or are a little tapped out short term (in other words, I'm watching but not likely playing). I indicate stocks that are IT bullish/bearish in a normal font. And I indicate stocks or sectors I'm most interested in because of where they are short term (ST) in a bold font. The bolded stocks are closer to buy signals, or they are extremely compelling because they could be high probability setups soon. The regular font stocks are worth keeping an eye on, and the stocks in parenthesis are something I will watch, but probably not play.

Dow: IT Bullish and ST Bearish. The Dow has support at 12,750. A break below that number will be a warning Flag that the Dow may be going back to Intermediate Term Neutral. A drop below 12,600 would confirm the posture.

SPX: IT Bullish and ST Bearish. The SPX has support at 1,380. A break below that number will be a warning Flag that the SPX may be going back to Intermediate Term Neutral. A drop below 1,365 would confirm the posture.

Naz: IT Bullish and ST Bearish. The Naz has support at 2,400. A break below that number will be a warning Flag that the Naz may be going back to Intermediate Term Neutral. A drop below 2,350 would confirm the posture.

BULLISH SECTORS/GROUPS AND STOCKS:

Energy: NOV, FTI, CAM, NBR, SII, SU, CHK, APC, NBL, PXD, PDE, SWN, CNQ, MRO, NE, (HES)
Coal: ACI, CNX, MEE
Oil Shipping: DRYS
Metals/Mining: ANR, WLT, FDG, CCJ, PCP
(Chemicals: AGU, TRA)
Steel: CLF, X, GGB, SID
Tech: ADBE, ADSK, RIMM, AAPL, GOOG, SOHU, AKAM, IBM, INFY
Manufacturing/Machinery: CMI, PH
Some Financials: GS, AXP, NYX, LTR, (MER), TROW, MA
Note: VZ

BEARISH SECTORS/GROUPS AND STOCKS:

Chemicals: starting to go bearish: MON, MOS, CF, POT
Energy: starting to go bearish: MUR, APA, XTO
Retail: BBY, AMZN
Note: TDW, LM, BAC, FDX, AIG, ADM, PSA

Note: a number of Energy, Commodities, Retail, and Financials stocks are starting to go bearish.

Market Sells Down On AIG

The stock market is selling down on the AIG earnings miss. In addition, Energy and Commodity stocks look like they are experiencing some selling pressure. The worst performing group this morning is not Financials, but Steel. Tech is the strongest area. The Dow is blasting down below its 20dma, the SPX is right on its 20dma as of this post, and the Naz is still well above its 20dma.

11:00 am MT: I locked down 1/3 of my ADM puts from two days ago for a 42% gain. I am still riding the balance of my CL puts. I also nibbled in on APA and MUR puts.

1:00 pm MT: I locked down a little more of the CL puts, I am averaging a 42% gain on the trade so far.

7:30 pm MT: I really don't have a lot to say about today. Some Energy and Commodity stocks dropped, while a few went up. Oil closed at a new record high again, this time it hit $125.88 per barrel. I'm still expecting a couple of day drop in Energy and Commodity stocks in general, especially since a number of those stocks are making equal highs, or lower highs, despite the strength in those sectors. We may still be headed towards a little bit of intermediate term consolidation in Energy and Commodities, which would be more reflective of a slowing consumer, than a build in supply. So I am still bullish long term in Energy, and some Commodities.

The Dow closed below the 20dma, the SPX closed just above the 20dma, and the Naz is still Bull Flagging well above the 20dma. Right now it looks like Large Cap Tech and Mid Cap stocks (mainly Energy and Commodity stocks) are the strongest stocks in the market. Mega Cap (Dow) stocks, certain areas of Discretionary Spending (Resorts, Casinos, Leisure, etc.), and a lot of Retail and Financials are the weaker to weakest areas of the stock market.

Market Still Indicisive Above the 20dma

10:00 pm MT: I am inserting this post in this spot so no one misses it. I want to make a quick comment about the Energy and Commodity setups from yesterday into this morning. Technical signals are technical signals, and many Energy and Commodity stocks had a great technical signal for puts, which were on their way to confirming this morning. Everything looked great, a lot of money was going to be made. And then it reversed intra-day. I made the comment that it could be Buyers Remorse, it could be Desperate Bullishness on the part of many Fund Managers, or it could be real Institutional buying. Whatever it is, it killed the signal. So I started scaling out of the Energy and Commodity puts, which I may finish exiting tomorrow. Now, after a failed signal, I will wait for a confirming signal to re-enter any puts if they are there. After a failed signal, I always switch from Cherry Picking mode to Confirmed Signal mode. I'm not sure what will happen in the next several days, but because of the failed signal in Energy and Commodities, I am guessing that it could be at least several more trading days, and maybe several weeks, before we know if the sectors are headed for consolidation or not. It may be that there is another round of call-trades in the current swing. That would be somewhat of a statistical anomaly, but it fits the pattern for the emotions frenetic traders. I have learned to never underestimate the freneticism of traders. You trade what you see, no matter how unbelievable or illogical it appears.

The Weekly Jobless Claims came in slightly better than expected, which put an early morning bid under Energy and Commodity stocks. Same Store Sales came in mixed, which is keeping Retail soft. It looks like the market might still fade into the close, but we shall see throughout the day.

10:30 am MT: I went through and cleaned out all the stuff I don't like right now technically. NOV was obviously a stop out with a loss of 32%. I don't like taking losses that large, but this was an anomaly. It seems that NOV lost/settled some kind of pending lawsuit and traders took it as a big positive. So NOV is up sharply, when all the rest of Energy is looking like it will roll over. From time to time a trader gets blindsided by a news bomb, and that's how it goes.

In addition to NOV, here are some more sells today: I locked and walked on IBM for a 26.5% gain. I time stopped CAT for a 14% loss. I stopped out of GES for a 25% loss, but on a half sized position, so it was minimal damage. I also stopped out of KSS for a 75 cent loss, which was 29%, so again, minimal damage. I just can't see what's going on in Retail right now.

I am still holding the MDR, CL, ESV, MUR, MON, MOS, and CF puts, which all started down today, but most of them have fought back. If we fade those into the close, then it was Big Money letting Sucker Money with Buyers Remorse get their last shot at what they think is a pullback. I'm still looking at those trades as rollovers, though, but we shall see. There is a lot of Buyers Remorse out there amongst Amateur Traders, and Smaller Money. Many of them did not participate in the big upswing in Energy and Commodity stocks this past week, and it's making for an interesting game between Amateurs and Professionals right now. It will be interesting to see what the Professionals think of those sectors in the next couple of days. CL and CF look pretty good. I also picked up puts on WFT on a Double-Top Divergence setup, and I picked up puts on BHI and XTO, which might finish the day as Harami Crosses.

I am only holding the AKAM calls, and the half-size calls on ADSK. If the market does rally a bit on a drop in Energy and Commodity stocks, it may only be a half-hearted rally, and Tech might be the only area that bumps up significantly. If selling does hit Energy and Commodities, it may be enough to take everything down because no-one wants to rotate. Retail and Financials just don't seem to want to participate in anything right now. I may be wrong, and those areas could all take off on a nice rally, but that's the way I'm playing it. If Energy and Commodities take off to the upside, then I will stop out of all the puts, ride the Tech stocks, and see if the market looks like it really wants to go stronger Bullish.

1:00 pm MT: Not much has changed in the past several hours. I'm not convinced of a bounce in Financials yet, although nibbling in on AXP or a Broker is ok. Everything seems to be hovering around waiting to see which way this breaks. We may finish the day pretty indicisive. I'm getting fairly close to some stop out points on a couple of the puts. We may not see this market go in motion with conviction for another trading day or two. It seems to almost be getting quieter.

1:25 pm MT: I stopped the WFT put for a 90 cent loss, or 17%. I'm continuing to reduce some positions as the market gets a little more indicisive. I also sold half the CL puts for a 40% gain.

1:45 pm MT: I continue to cull down the positions. I stopped out of the ESV put for a 90 cent loss, or 16%. I stopped out of the MDR put for a 70 cent loss, or 18%. I scratched the ADSK call for an 18 cent loss on half a position, so pretty minimal losses on those. I sold the MUR put for a 25 cent profit, or 6.4% gain. Also, earlier in the day I picked up a small put position on ADM. I have now culled back about 45% of the trades that I was holding - going into today. I have kept the losses very manageable, as you can see, and I had a couple of profitable trades. The only thing that zinged me was NOV, and that was a News Bomb, which I have no control over. As far as my trade management, I'm very comfortable with where I am after the culling, going into the close today.

2:15 pm MT: It looks like Buyers Remorse is winning out over Slowing Consumption for now. It will be interesting to see how the American Consumer holds up this summer in the face of pretty heavy energy and goods inflation. Today, the market looked a little leery, hence the indecisive day. So I don't want to be too loaded up on trades until I see another sign that the market is tipping its hand. I thought the tip was yesterday in Energy and Commodities, but it may be several more days until we get a clearer signal. I am having a hard time bringing myself around to being wildly bullish, even with the interest rate cuts, because those cuts are a two-edged sword. The Fed may have stopped the Financial sector implosion, but it created a lot of inflation in energy, food, and consumer goods. This is a tough read, so it's more important than ever to pay close attention to the charts, and to use shorter time-frame trading strategies if the charts start to get a little choppy.

8:15 pm MT: Sector Wrap: CNQ and ATW will probably give Energy stocks a little boost in the morning because they reported better than expected earnings, and their stocks are up a little bit after-hours. PCLN will give Tech a little boost because the company beat earnings expectations after the close. NVDA will offset that a little in Tech because the stock is down after-hours on their earnings report. I am ready to stop out of my Energy and Commodity puts tomorrow, which may happen. I would rather see Energy and Commodity stocks consolidate during the summer, and Tech, Financials, and Retail go up during the summer. That would be my best case scenario for a bullish market. But right now, it may be that just the opposite happens, which may make for some squishy times in the Global Economy for the rest of the year. We shall see.....

8:15 pm MT: Market Wrap: Asian stocks are currently down on a warning from Toyota that the company will experience the first full-year profit drop in 7 years. This is interesting because Toyota sells gas-friendly cars, whereas GM and Ford are struggling because of a drop in Truck and SUV sales. Financials, especially Banks ($BKX), and Insurance ($IUX), broke diagonal support lines, and Retail ($RLX), along with many Retail stocks, also broke diagonal support lines after some soft Same Store Sales numbers today. AIG is going to exacerbate the situation in Financials because the company reported poor earnings after the close, and the stock is down over $3.00, or down more than 7% after-hours. This underscores my theme of weakening conditions technically in Financials and Retail. This will also probably set up a key support test tomorrow for the major indexes.

The Dow has support at 12,750. A break below that number will be a warning Flag that the Dow may be going back to Intermediate Term Neutral. A drop below 12,600 would confirm the posture.

The SPX has support at 1,380. A break below that number will be a warning Flag that the SPX may be going back to Intermediate Term Neutral. A drop below 1,365 would confirm the posture.

The Naz has support at 2,400. A break below that number will be a warning Flag that the Naz may be going back to Intermediate Term Neutral. A drop below 2,350 would confirm the posture.