Watchlist Saturday

Market Posture:

Dow: IT (intermediate term) Bullish and ST (short term) Bullish. The Dow is barely through the 50dma and still climbing towards the top side of the long term channel. It's a bit choppy at the bottom end of the channel, but traders continue to shake off all other bad news and focus on the drop in the price of oil. Now if only that would translate to the pump, where I'm still paying over $4.00 per gallon.....which is probably why it's choppy at the bottom side of the long term channel. Traders want to take it up, and the Bulls keep punishing the Shorts every time they try to roll it over, but the price of gas is still an issue until its not.....There is resistance in this area on the Dow, and then a nice big vacuum until the 12,000 - 12,100 area. By the way, notice that the 200dma is now tracking along with the top side of the long term channel.

Here is a longer term view of the Dow:
(click on image to enlarge)


Here is the same view smoothed out with Weekly bars. Based on the recent price action, the Dow may reach for 12,000 sometime this week before pulling back:
(click on image to enlarge)

SPX: IT Bullish and ST Bullish. The SPX is bumping its head right on the 50dma. If it can get through that resistance, then there is a nice vacuum all the way to the 1,320 - 1,330 area, which is also the convergence of the 200 week moving average and the 20 week (or 100 day) moving average. Like the Dow, the SPX is fighting its way off the bottom of the long term channel and moving towards the top end of the channel. And like the Dow, it's traveling in an intermediate term upward channel/wedge pattern in the process. In other words, it's still a bit choppy as Bulls fight off the Bears and gradually push things north.

Here is a longer term view of the SPX:
(click on image to enlarge)


Here is the same view smoothed out with Weekly bars showing the convergence of the Weekly moving averages. Like the Dow, the recent price action on the SPX suggests another leg up in the current move, which could take the SPX towards 1,320 before a swing pullback.
(click on image to enlarge)

Naz: IT Bullish and ST Bullish. What a difference Wednesday and Friday made on the chart. The Naz has really cleaned up its act and the Bulls are solidly in charge. The Naz cleared its 2,350 resistance and went Bang Bang with a little wiggle in between on Thursday. You can see that the Naz is clearly headed towards the 200dma and the long term downtrend line in the 2,440 - 2,450 area. The current swing is pretty extreme, so I'm not looking for the Naz to be up every day this week. If the Naz takes a quick thrust to the 200dma on Monday or Tuesday, it's probably done for at least several days of consolidation off the parabolic short term upswing. The Q's and Tech stocks may be a good call trade again early in the week if the Naz does shoot for the 200dma right away.

Here is a longer term view of the Naz:
(click on image to enlarge)


Here is the same view smoothed out with Weekly bars showing the long term Double Bottom. If the Naz clears 2,450 there is a huge 100 point vacuum all the way to 2,550.
(click on image to enlarge)

Stock Watchlist:

Note: I indicate stocks that may be starting to go 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 still be playable short term in a regular font. I indicate stocks that are bullish (or bearish) that appear to be closest 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.

Here are some interesting potential Bullish stocks for Monday-Tuesday:

Retail: URBN, KSS, AMZN, JCP, TGT, BBY, TJX, RTH, SHLD, (RL)

Leisure Spending/Casinos/Travel: HOT, RCL (almost a Rising Three Methods), WYNN, LVS, (MCD, CCL)

Transports: (FDX, UPS)

Financials: HIG, STI, MET, BK, STT, NMX, (MS, MCO, PRU)

Tech/Services: ESRX, QCOM, (ADBE)

Railroads: CSX, NSC, UNP, BNI

Cyclicals: UTX, MMM, DHR

HMO's/Healthcare: WLP, HUM, AET, BDX, (CI, BAX)

Defense: LMT, GD, NOC, RTN (confirmed Rounding Bottom)

Food&Beverage/Consumer Staples: GIS, PEP, KO, (PG, CL)

Note: DD, IR, MHS, COV, QQQQ (confirmed Rounding Bottom)

I'm focused on bullish stocks on Monday and Tuesday or so, but I will build a bearish watchlist during those days in case the market pulls back. However, the pullback will probably be in the bullish stocks, not the currently most bearish stocks like Energy, Commodites, Gold, and Utilities. So there's not much point in me developing a bearish watchlist for a couple of days until I see some further development in the current sector rotations.

One final note: review the Wednesday, August 6th posting if you are interested in getting some free educational documents from me.

I have emailed out documents to all the requests as of 8:15 pm MT Sunday night. There are 3-4 of you that have email filters that aren't allowing my attached-document emails to get through to you. If you requested the documents and haven't received them by now, then you may need to email me with a different address.

Also, David H. showed me a nice watchlist tool on TOS that you can enter your Index list and get a histogram readout of current price action. It looks pretty slick. I'll play around with it and see if I can demo that on VC on Wednesday or do a write-up about it here. Thanks David.