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.