Harry Boxer, On Long Stocks & Ultrashort ETFs to Watch (TheTechTrader.com)
Today we're going to talk about some longs. There are plenty of longs that still look good in this market despite the indices rolling over and looking vulnerable here. We'll also talk about some of the ultra-short ETFs, which we've been trading and currently have in our model portfolio.
Starting off with Acme Packet (APKT), which has been acting great, notice that the two-month base broke out of a large price volume surge and it's been flagging for the last three days. On Monday it moved up a fraction, but the underlying technicals continue to improve. Balance of Power, Money Stream and On-Balance Volume all look positive enough for this stock to make it higher, I think. Target's 16 1/4, secondary target up around 20. We'll be keeping close tabs on this one going forward.
The Financial Bear 3X (FAZ), which turned around in early January, pulled back in a nice orderly bull flag and then broke out. This stock looks like it may have some difficulty getting through the 24 - 24 1/2 zone. That's my trading target short-term, but if it gets through there, then Katy bar the door!
Hasbro (HAS) had a big significant price-volume surge and breakaway gap today that takes it to tremendous earnings, up nearly 4.00. Beautiful base, the break out, the flag, the cup and handle. You can see that the explosion today was an impressive one, especially in the face of a declining market, and it would not surprise me to see this stock make it up to the high 30's, low 40's going forward for a test of the '08 highs.
Lastly, the VXX, which is the ETF for the VIX, appears to similarly be quite strong like the EDZ. A significant break out occurred Friday, very little pullback, and today another move forward, up 66 cents, closing right at the declining 50-day moving average. A price break through here should lead to my next target up around the 37-38 area, then beyond that maybe something in the low 40s.
Other stocks on Harry's Chart of the Day video that you'll want to learn more about are Accuray (ARAY), Large Cap Bear 3X (BGZ), China Agritech (CAGC), Conexant Systems (CNXT), Emerging Markets Bear 3X (EDZ), Integrated Silicon Solution (ISSI), Key Tronic (KTCC), Momenta Pharmaceuticals (MNTA), North American Energy Partners (NOA), Pharmacyclics (PCYC), RXi Pharmaceuticals (RXII), Silicon Graphics International (SGI), Small Cap Bear 3X (TZA).
Gary Dean, On Ball in Bears' Dean (MarketsPath.com)
I am expecting the bulls to try and maintain an underlying bid to keep the tape higher for most of the day Tuesday. We may see some scared longs running for the exits towards the end of the day, but buying dips up to the 1076-ish area on the S&P 500 will most likely be the path to least resistance. There is another pattern forming on the SPX futures 5 minute charts, which suggest it can push up to the 1084ish range for this wave C up. That would land the SPX in the 1087-ish area.
The futures were up nicely in pre-market as the overnight boyz started working much earlier than usual. I saw them coming in with high block trades throughout the night, especially seen after 11:00 pm. They pushed the futures through the bear flag it was forming which would have suggested more work to the downside before wave B was completed.
It appears that wave B down completed yesterday and we are now in the process of making wave C of wave 2. If this count is correct, we should see the SPX top somewhere in the 1076-1090 area. So far the count shows us being in a wave 2 up of (3) down -- and once it completes we will see wave 3 of wave (3) hit the tape. If that is what is setting up, it will be a brutal decline and will have every bull selling first and asking questions later.
The good thing about these counts is we will have a pretty good idea what is taking place very early into the rally. Being that I have a decent understanding of Elliott wave, but I am not an expert wave counter like some, I believe the alternative wave count where the SPX completed wave (1) at the Friday lows, will not catch many Elliott wave counters by surprise.
Why is that important? To put is simply, the bulls will only be able to use the shorts to cover for a short-term burst and will not be able to catch them by surprise too easily. Myself as well as most will be expecting wave C to take the SPX to the 1074ish lower target and 1085-1090 higher target wave C. That will leave a 15 point spread to allow the shorts to know if they are right or wrong with the wave 2 of (3) count. If the SPX takes out the 1105 pivot, they will know right there that we are in the larger wave (2) and not short until the next pivots come into play.
So the bulls are going to have to turn the tape on their own or with the help from Uncle Ben and I am not talking about the rice. The ball is in the bear's den and the bulls are going to have a tough time taking food away from them, being they haven't eaten in almost 10 months.
We can take some long scalps today, but the safer trade remains with selling rallies until it proves us wrong. In short, today's trading plan: Look to be a buyer of dips up to the yesterday's highs.
Above that pivot, you have to be careful, as the bears could turn the tape at any time and it would fit the count. But I still believe we will see the spy trading in the 108.32 levels before wave C completes. Surprises remain on the downside.
Jack Steiman, On Bulls Needing to Hold the 200 DMA (SwingTradeOnline.com)
The key after a positive close like Friday is following through on the next day's action.
Follow-through was nowhere to be found Monday. Not what the bulls want to see and puts the recent down trend more in focus.
After the close on Friday, it was reasonable to expect the overseas markets rally higher. When they rally higher it basically always boosts our futures allowing for a gap up out of the gate. Asia had no rally and Europe was surprisingly flat. No big rally overseas led to flat to slightly down futures on our end. No gap up to be found.
Monday's action does not mean we fall apart. The closer the indexes get to their 200-day exponential moving averages, the harder it will be for the bears to hold off the fighting bulls who will give all they have to protect those critical 200-day exponential moving averages. A deep close below those 200's across the board opens up the bear market conversation. For now all we know is that we're in a downtrend that was confirmed when we backtested those lost 20- and 50-day exponential moving averages. From there we continue to fall gradually. The bulls need to now focus on protecting those 200's below current price.
There is a pattern worth noting when markets are in more of a downtrend. You often see some early day strength that turns to a churn that ultimately turns to late day selling. This is the pattern that's starting to emerge with more regularity. When the market was rocking in bull mode, we saw some early selling turn in to late-day buying. That's when you know you're in a bull. Folks can't wait to buy up weakness. Now we are seeing folks anxious to remove themselves from stocks once we head higher. A change of character worth noting for now.
We saw some terrible action from the financial stocks Monday, and in particular I am watching the action from Citigroup (C). It is now trading at the poorly priced IPO secondary. It was supposed to price at 3.50, but eventually priced at 3.15. It traded down intraday to 3.13 before rallying back some weeks back. A close below 3.13 opens the door to much lower prices not only for the stock but the financials and thus likely for the market.
We had the first close below Dow 10,000 in quite some time today and the first time since it started to fall from just over 10,700. It has found a way to hold above and losing 10,000 isn't necessarily a bad thing as it's still above those 200's, but it is psychologically damaging to some degree.
The real line in the sand for this market is those critical 200-day exponential moving averages currently at 9768 on the Dow. The levels on the S&P 500 and Nasdaq are 1046/2062 respectively. Those levels now become the key to this market future, although, we know they change slightly from day to day. The bulls need to ultimately get back through gap and 20/50-day resistance, but for now they are more focused on holding the 200's.
Mike Paulenoff, On Yellow Lights Flashing Everywhere!(MPTrader.com)
Subscribers of mine can tell from my "body language" revealed via my current positions -- long the VXX (VIX ETF), long the UUP (dollar ETF), and long the TLT (20+ Year Treasury bond ETF) -- that I am in caution mode, because I see yellow lights flashing everywhere. Yes, definitely a healthy wall of worry for investors to climb, which could repeat itself again during 2010.
However, I think the problems are discouragingly complex, and will defy solutions from our most revered governmental institutions (domestic and global), which warns me that surprises THIS YEAR are likely to be negative, and will reflect failed attempts and remedies to produce the desired outcome.
Regarding the TLTs, I am looking at a developing near-term base pattern that is warning me to expect lower long-term rates as the economy deteriorates (again), and equity prices press lower amidst a host of global problems that will not be easily or quickly resolved.
Yes, US bonds and the underlying full faith and credit of the US Govt also could be (already is being) questioned, but as I see it, The Treasury is the caboose on a long train, and will be looked upon for the forseeable future as the strongest credit risk in an otherwise crumbling neighborhood.
