Harry Boxer, On Top Charts to Watch (TheTechTrader.com)
The market continues to hang tough despite the pullback in the last couple of days, and there are some strong ideas out there, particularly among the junior biotech stocks.
Acadia Pharmaceuticals, Inc. (ACAD), a model portfolio position of ours, broke out in May, formed a coil, broke out of that, and Monday broke out of a flag on heavier volume of 3.6 million, up 16% or .74. That's an exciting day. If you look back on the charts, you'll see that there was a big gap in June '08 that could get filled now, and if that's the case you could see this stock go up toward the 7.0-7.5 area over the course of the next few days. So keep your belt fastened on that one.
Affymetrix, Inc. (AFFX) is in a beautiful up-channel. I wanted to point that out to you because it's now in its five or six day flagging action, orderly low volume. During this orderly pullback the Balance of Power remains full, the Money Stream and the OBV are near the top of the window, very bullish action. You may see this stock break out and start to run. The next target on this one is around 11.0-11.5 area.
Biocryst Pharmaceuticals, Inc. (BCRX) is also in a high level consolidation. After a break away gap and strong run, it's been consolidating for a couple of weeks now with the volume getting lower and lower, yet underlying technicals holding up very well also on this one.
Among non-biotechs, Brigham Exploration Company (BEXP) has
been my favorite junior oil for months now. The breakaway gap in early
July was the key, and the stock then flagged, ran up, mini flagged, and
continues to run. In the afterhours on Monday, the trading was 7.0, up
another 1.06, amid strong reports that some of their oil wells are
coming in stronger than anticipated. In any case, the chart looks
higher. The key overhead resistance around 7.75 is my next
target.
Looking at the chart you can see that BEXP is at the
top of the channel, a lateral point of resistance.
Also in that junior oil sector is a new stock we discovered
Monday, China North East Petroleum Holdings, Ltd. (NEP), a new issue
back in June, you'll want to take a look at on the chart. We also like
and feature in our Chart of the Day video report (link below): Inovio
Biomedical Corp. (INO), Jazz Pharmaceuticals, Inc. (JAZZ), KongZhong
Corporation (KONG), Opexa Therapeutics, Inc.
(OPXA), and
Orexigen Therapeutics (OREX).
Jack Steiman, On Obeying the (Bull) Trend (SwingTradeOnline.com)
It's important to watch the market's two-year downtrend line and the distance the critical moving averages are away from actual price. Sometimes the market simply pauses and allows the moving averages to catch up, which also allows the daily and short-term charts to unwind some very overbought oscillators. That's all good news for the bulls. The S&P 500 now has its 20-day exponential moving average all the way up to 975. It's rapidly moving up to catch price and that's very bullish. It doesn't mean the market just rockets up from here, but it does mean that as long as we are moving laterally, which we are, the ability for those 20's to catch up is bullish for the markets. Remember, we're above 1975 on the SPX, so it's literally moving higher every day. We may never get to it. It could just move up to price instead of price moving down to it. No way to know, but the overall price action is solid, folks. We saw the futures down all night and all morning Monday. Every attempt to bring those futures back up was met with some further selling. In the end, the selling wasn't much and the volume was light. The advance decline line wasn't bad. Nothing bearish to this point. That can always change, but the trend remains in place. We are clearly in a bull market for now. We are always on alert for something technically that changes that picture, but it's best to obey the trend in place and thus this means very few to no shorts and basically all longs when they set up.
The dollar has rallied some off the bottom and this has
adversely affected the commodity world.
Some commodity
stocks are getting hit hard but if you study their charts, most are
just small pullbacks off some very high pole charts. They can use the
selling for sure. Yes, the dollar has come up, but it's rallying from
very oversold levels; thus, don't make too much from it just yet. I am
in the camp that it's likely an oversold rebound, but we'll need a week
or two to know if that's the truth or not. I don't think I'd be going
out and buying loads of commodity stocks just yet but it's something to
keep an eye out for.
Jack Steiman is author of SwingTradeOnline, a journal of his market analysis and stock trading alerts. Jack had 18 Winning Trades Out of 24 in July!! Sign up for a Free 21-Day Trial.
Mike Paulenoff, On Weakness Ahead (MPTrader.com)
The big picture of the S&P 500 e-mini futures contract shows that daily RSI has rolled over from an overbought condition and is pointed straight down, which is a warning signal that argues for weakness directly ahead. The initial critical support plateau is at 990, which if violated should trigger follow-through to 975-970 thereafter.
I have been focusing on the e-mini S&P more than usual lately is because I consider it a representation of the leading asset class that all other markets (gold, oil, etc.) mimic. If money comes out of equities, I would be surprised if money did NOT come out of oil, too, which makes me interested in the PowerShares DB DoubleShort Oil ETF (DTO).
Looking at the macro side of the markets, today (Tuesday) begins a two-day FOMC meeting. Some economy and Fed-watchers suggest that Bernanke and Co., might be persuaded to hint at future tightening (to combat incipient inflation). Although I think such a hint would have disastrous consequences for the markets-- not to mention for the fragile economy-- perhaps Mr. Market intends to send the Fed a message today and tomorrow: don't even think about it!
A nasty two-day about of selling pressure certainly will send a message, wouldn't it?
Gary Dean, On the Most Important Week of the Year (MarketsPath.com)
The bears gave it a go on Monday, but the FOMO injection from the NYFR was put to work in the last 45 minutes and we saw the indexes erase most of the losses by the time the bell sounded. This is starting to become robotic, isn't it? The puppet masters were granted another 6.6 billion of POMO money today, now the 3rd straight day and the 4th and 5th due on Tuesday and Wednesday. But what we are seeing the last 9 days is that the pump is NOT catching any momentum and the pumps are being sold off quickly.
From the 1st of the 5 doses of POMO money that started on Thursday August 6, the S&P 500 is at the same place it was before the injection of liquidity was placed into the market. The SPX closed at 1007 on 08-05, the exact same place we closed Monday. The big question that has to be asked: What happens if they decide to start placing that money into the treasuries? Will we see all of that leveraged money that was used to prop the indexes to where we are, now have to jump over each other to get out?
What could possibly change the "PLAN"? Here is another clip
from precision. It was the March 18 09 FOMC Announcement that paved the
way for POMO, allowing $300 M and six months for the operations. It is
increasingly clear that POMO is a necessary evil to maintain Treasury
auctions.
The ramp job in equities is a side effect of the
dealers leveraging that capital and flooding the markets with it, and
must irritate Bernanke to no end as higher equities are themselves
reducing foreign interest in the Treasury auctions and causing long
term yields to become dangerously close to reaching levels that, once
broken, will end up spiraling out of control.
The FOMC could wait until the next meeting in about six weeks to renew, but yields will likely have gotten away from Bernanke by then, and a hinting of a rate increase (which could correct yields) is too politically dangerous for Bernanke, who would not want to be seen as having single handedly put in the last stock market top. Accordingly, while we still find it likely that QE will be renewed on Wednesday, we must prepare for a Fed that stands idly by as the Treasury market disintegrates and for the monster rally in equities that could accompany.
You can see the corner our Fed Chairman is in and the clock is ticking. If you were leveraged with 100's of billion of dollars in the market, would you be willing to roll the dice with what Bernanke will say on Wednesday? Hinting of rate hikes will certainly cause some severe selling for the indexes and maybe panic. But the indexes can fall all the way to the low 800's and still keep a bullish tone to the longer term trend. As you know, I believe it would be the best thing for longer term move higher.
We will know the answer soon enough. But if you think about it; another monster rally on top of an ongoing monster rally, which is on top of a 5 month monster rally, without a single meaningful pullback? While the 3rd monster rally starts, treasuries crash and more than half the money is still on the sidelines. That is a little tough to swallow for me and why I wouldn't be surprised to see him hint of hiking rates on Wednesday.
Bottom line: We will either see the boyz start to get antsy about the fed announcement on Wednesday and the selling starts Tuesday, or we will see more chop right into the fed meeting. This is probably the most important week of the YEAR.
