Jack Steiman, On Quiet Before the Storm (SwingTradeOnline.com)
That would describe today and mostly likely tomorrow as well. We are awaiting lots and lots of huge economic news this week, not to mention a huge statement from Mr. Bernanke on Wednesday. The bulls and bears are both scared to overdo their stance as the news this week is going to be huge in terms of market movement. Wednesday kicks things off with the ISM Manufacturing number 30 minutes into the trading day. A few hours later we get the much anticipated Fed statement, with the market expecting some type of stimulus for the economy. If it gets nothing, look out below.
Bernanke has more than hinted that he will likely do something at this meeting to stimulate, so it would be a major disappointment for the markets if he came away doing nothing at all. He has a lot of pressure on him this Wednesday to appease the market, so expect something to be put into place, even if it's not a full QE program.
After Wednesday, we deal with the European Central Bank (ECB) on Thursday, which is the equivalent to our Fed from Wednesday. To top it all off, we get the Jobs Report on Friday. Get ready folks. One amazingly wild week is upon us, and only one trading day away from the start of the action.
The earnings season has been extremely interesting in that it hasn't been as bad as expected by most of the so-called experts. There was supposed to be a lot more warnings, with many stocks getting pummeled, which, of course, would have led to the expected heavier selling that has never taken place. Quite a few stocks have been hammered lower, but more have had good reports, allowing these stocks to go appreciably higher. The evidence is of an agnostic market in place as each company is standing on its own merits. If you report well you get rewarded, but if you warn, and more importantly, guide lower, you are in big trouble. The earnings season has in many ways saved the market. Yes, the bar has been set lower, but the selling prior to the earnings reports was based on those lowered expectations.
Over time the bar will be set higher, and these companies will need the economy to hold up to get to those loftier numbers, but, for now, the news has been better than expected overall. It seems only a total collapse of the financial system will once again be the catalyst for something very bad to happen to our market. That would be created from the situation in Europe, but the ECB is busy doing what our Fed is promising to do. Who knows how it all ends, but, for now, the ECB, and our Fed, are preventing the collapse many fear. So our market continues to hold up overall. Back and forth to no where, mostly, but hold up for sure.
There is the headache gap at 2965 for the Nasdaq 100, but bigger picture, if we can get through that level, the Nasdaq 100 needs to clear a huge nasty gap down that runs from 3000 up to 3025. The bottom of the gap at 3000 will be an initial wall for the market, if we can ever get that high. Nothing will be easy as the whipsaw market continues. It's seemingly never as good as it looks when it's running higher, and never as bad as it looks when it's running lower.
Avi Gilburt, On Still Lower to Go (ElliottWaveTrader.net)
Unfortunately, the market did not provide much of a correction Monday. Rather, it spent most of the day in a frustrating triangle, after dropping in what counts best as a 3-wave (a) wave.
Frost & Prechter warn that many people tend to label a triangle as complete too early. So, I have offered this count for tonight, which still requires waves d and e to complete. A (c) wave down should likely follow, with a target of 1370/71, with the potential to drop into the low to mid 1360 region.
The question that we will have at that time is if this decline will be a wave (4), or an a-wave of a larger corrective purple b-wave decline. Again, this we cannot answer until we see how we move up from the next lower target region.
Mike Paulenoff, On Huge Base Unfolding in VIX (MPTrader.com)
My pattern work on the VIX since January 2010 resembles one huge rounded base that exhibits VIX symmetry between the May-July 2011 period and the April-July period 2012. The big difference is that price action in 2011 is dwarfed by the current price action.
This means that if the SPX fails to climb and sustain above 1395-1422, and instead reverses and violates 1368, a massive decline likely will be set in motion that will be confirmed by a sharply rising VIX that will make the 2011 bear phase look minor by comparison.
For the time being, the bulls control the dominant trend directions. However, they should be paying increasingly close attention to the development of the huge base formation unfolding in the VIX.
Harry Boxer, On 2 Longs & 2 Shorts to Watch (TheTechTrader.com)
The stock market had an interesting day on Monday, and ended the day slightly negative. So we're going to take a look at some shorts here. They still look weak, they're still going lower, and a lot of them are falling bear flags and things of that nature. Then we'll take a look at a few longs.
National Presto Industries Inc. (NPK) is a very bearish-looking chart. After a huge wedge cracked hard, formed a mini-bear wedge, then a flag, it kept stair-stepping lower, until finally it stabilized in the last two days. It was down 2.93 to 66.33, or 4.23% on Monday. It's right on support and could crack here. The next move is at 60-61, perhaps.
Solera Holdings Inc. (SLH) has had a long down channel underway. It snapped back on Monday, up 27 cents to 38.74, but it looks like it could still go lower. Look for something in the mid 30's short-term.
Stocks on the Long Side...
LeapFrog Enterprises Inc. (LF) had a key breakout on Monday, up 83 cents to 12.09, 7.37%, on 1.3 million shares. It was a good day for this stock. The volume is picking up, and it looks like it could run, maybe up to the 15 zone short-term.
Sarepta Therapeutics, Inc. (SRPT) really had a nice move on Monday, with a gap and 2-day pause, before starting again to run up. It was up as high as 10.25, before settling back at 9.47, up 1.01, or 12%, on 4.8 million shares. If Monday's high at 10.25 is taken out, then look for something up around 14 1/2 short-term.
Other stocks in our Charts for the Day are Abercrombie & Fitch Co. (ANF), American Public Education, Inc. (APEI), CEVA Inc. (CEVA), The Chefs' Warehouse, Inc. (CHEF), The Cooper Companies Inc. (COO), CARBO Ceramics Inc. (CRR), Cognizant Technology Solutions Corporation (CTSH), Deckers Outdoor Corp. (DECK), Joy Global, Inc. (JOY), Nucor Corporation (NUE), Pioneer Natural Resources Co. (PXD), Red Robin Gourmet Burgers Inc. (RRGB), SINA Corporation (SINA), and Weight Watchers International, Inc. (WTW).
Stocks on the long side include Array BioPharma, Inc. (ARRY), Cornerstone Therapeutics Inc. (CRTX), Dole Food Company Inc. (DOLE), 8x8 Inc. (EGHT), Ellie Mae, Inc. (ELLI), Medifast Inc. (MED), Sprint Nextel Corp. (S), and Streamline Health Solutions, Inc. (STRM).