Watchlist Saturday

Dow: IT Bearish and ST Bullish. The Dow bounced off the top side of the 11,950 - 12,100 support zone. The closest resistance zone is 12,350 - 12,450. If the Dow falls much below 12,200 Monday then I will look at this bounce as possibly over and I will probably play puts.

SPX: IT Bearish and ST Bullish. The SPX bounced off the top side of the 1,325 - 1,340 support zone. The closest resistance is 1,370. The SPX could overshoot it by 5 points or so, but the area is clear to see. If the SPX falls much below 1,350 Monday then I will look at this bounce as possibly over, which would confirm on a drop below 1,340. I would probably start nibbling on puts on a drop below 1,345.

Naz: IT Neutral to Bearish and ST Bullish. The Naz bounced off the 2,400 support area (38.2% retracement of the previous IT Bullish Trend). The next resistance is 2,460, which is minor, and the next resistance after that is 2,475. If the Naz falls much below 2,430 Monday then I will look at this bounce as possibly over, which would confirm on a drop below 2,415.

I am still focused on these particular stocks for short term bullish bounces:

Steel (STLD, NUE, CLF), Coal (WLT, CNX), Machinery/Construction (JOYG, BUCY, CMI, FWLT), Tech (ADBE - earnings Monday, CTSH, QCOM, RIMM, IBM, WDC), and Chemicals (PX).

I may add to the list on Monday, as I see things develop. I am also starting to put together a list of stocks I would like to play puts on when this short-term upswing is over.

The bounce from Friday has a chance to continue on Monday, and perhaps even Tuesday. I'm not targeting the move to last beyond Wednesday morning to mid-day at the latest. Brokers will set the early tone in Financials, and thus the market. LEH has earnings on Monday before the open, which will set part of the tone for the continuation of the bounce. Brokers know how to play the earnings game as well as any companies out there, so I expect LEH to at least be "less-than-catastrophically-bad" with their report, which will keep the shorts in Financials on the run for another day. GS has earnings Tuesday morning, and I expect a decent report there as well. And finally, MS will report earnings on Wednesday morning, although by then, most of the cake will be baked. Tuesday also gives us the heaviest day of economic reports. So if the market survives Tuesday, then I think the bounce can go to Wednesday mid-day. I will look to get in more call trades on Monday, barring a meltdown from LEH. I will probably be pretty active Monday and Tuesday, scaling out of current trades and looking for new trades. Depending on how things shape up with the Brokers and Tuesday's economic reports, I'll probably start scaling into puts Wednesday. However, it could be as early as Monday - but I would prefer Wednesday because the puts will have a higher probability of working if the market continues bouncing on Monday and starts running out of gas later in the day on Tuesday.

One other note: I have been recording some videos to get the hang of things. I'm still learning the best formatting, size, resolution, audio, etc. I was set back by about 5 days because of my illness. But I'm getting back on track now.