Jack Steiman, On S&P 500 Very Close to Joining Lost 200-Day Club (SwingTradeOnline.com)
The market closed last week a few points above that critical area of support for the S&P 500. With the Dow and Nasdaq already decently below their critical levels of support or the 200-day exponential moving average, everyone was wondering this weekend whether the S&P 500 would follow along, with many understanding that if the S&P 500 lost 1375 with force, we'd spiral down.
We woke up to slightly green futures that held throughout the morning. The market opened up a drop higher, and after churning a bit, fell into the red with the S&P 500 getting within a couple of points of that magic level. It looked ominous, but the fact that we didn't gap down below 1375 gave the market hope for the day. Normally, when you lose a key level, you lose it on a gap down. It can and does happen intraday from time to time, but historically these events occur with strong gap downs.
Gapping down is very important bigger picture in terms of breaking down through strong and powerful support levels. So after going red the market fought back, and when all was said and done, the bulls kept the S&P 500 from forcefully or even tepidly breaking through 1375. This is something they'll be trying very hard to do every day for a long time as they try to give themselves some breathing space from losing those 200's. Keep in mind that although we did hold today it wasn't anything special. The market is still vulnerable to losing 1375, so don't take today's victory as something to get excited about.
Apple Inc. (AAPL), the number one market leader, has had a very difficult time sustaining any real bid for the past six weeks. The stock has dropped over 155 points, yet it still can't find a bid. We had gotten to know AAPL as the stock that always bid higher, especially if it fell 1 or 2 percent. The stock was loved by everyone. Even on market down days this beast would find a way to work higher, leaving the bears totally frustrated. It seemed as if AAPL could do nothing wrong. Then along came their earnings report, and the stock has not been able to bid consistently since. It has had brief flashes of a move higher, but this has only occurred at times it got very oversold on the short-term charts.
The daily chart has now joined in at oversold. That is an extremely rare occurrence and tells us the nature of how weak it really is. Even at oversold on the daily chart it can't find a bid. To find a short-term market bottom it seems to me we need to see the type of candlestick on AAPL that says it has bottomed. It can rally from oversold, but I'm talking a real bottom, not some $10-$20 rally that just fails out. To me, that normally takes place when the stock is weak as it is now and then has a massive gap down on big volume that reverses as the day moves along, closing at, or above, the gap down mark.
Until I see this take place, in my mind it's still only able to rally from oversold, but not much more.
Look folks, this market couldn't be more boring and less fun than it is right now. I get it.
The market is nearly oversold on all the daily index charts and is basically oversold on all the short-term charts. Markets can stay oversold. Maybe this time it will and we will lose S&P 500 1375. It won't be easy for the bears to capture this powerful last level of key support for the market, but they will try very hard to get the job done as will the bulls try in terms of defending it. There's a lot on the line here regarding 1375, so watch it closely with me. If it does go away, with force and maybe some volume, the market could truly free fall. 1335, or so, is next after 1375, and that would be a very painful drop if you're holding longs. It's a bit ominous out there, as the market is vulnerable. Let's hope it can hold, but with the Nasdaq and Dow below, the S&P 500 is very close to joining the lost 200-day club.
Avi Gilburt, On Long-term Buying Opportunities in Precious Metals (ElliottWaveTrader.net)
Since the market began this rise from the summer-time lows, I have stated repeatedly that the pattern did not provide a clear 5 wave move off the lows to begin the rally. This has made me very suspicious of this rally even though almost everyone else was seeing this as the start of the expected parabolic 5th wave rally.
At this point in time, with the decline we have seen thus far, I am now heavily leaning towards the recent bottom only being an a-wave of a larger a-b-c decline to complete the e-wave of a larger wave (4) triangle in the metals. While silver hit our target almost to the penny at 30.75, GLD broke down below our ideal target level.
Furthermore, when we have seen the metals in true bullish form, they have rarely retraced below the .382 retracement levels. For now, both metals have dropped below those levels. Lastly, the rally off the recent lows that we saw this past week was on very weak volume. This is usually indicative of corrective action, especially when a 3rd wave in the metals would have exhibited major buying volume.
From a technical perspective, the daily chart has not provided us with a low on clear positive divergence. This is something that we have seen on 90% of the bottoms in the metals. While we may want to consider this time as within the minority 10%, I think I will err on the side of the greater probability and look for new lows made on positive divergence.
So, for now, I think the metals are more likely a short-term shorting opportunity for only VERY aggressive traders. Ultimately, I would not want to see GLD over the 170 resistance level or silver over the 33.40 resistance level. This would set up a c-wave down which should target at least the 29.70 level in silver and at least the 158 region in GLD. Clearly, we may see a deeper drop than those levels, but they would be my minimum targets for another decline.
As I am sure many of you are now thinking to yourself: What would make me change my mind about this possibility? Well, if we see the metals begin to rally on massive buying volume and move beyond the cited resistance levels with such large buying volume, then I may reconsider my perspective.
Alternatively, I still want to point out that new lows are not out of the question, even though they are less likely at this time. But, even so, we need to maintain the appropriate perspective. The larger pattern in the metals seems to suggest that new all-time highs are still highly likely, which makes these drops long-term buying opportunities. So, please do not lose site of the forest while analyzing the trees and leaves, as we expect silver to potentially double from the current levels.
Mike Paulenoff, On Facebook's Upside Reversal (MPTrader.com)
Facebook (FB) reversed into positive territory on Monday after hitting a low at 18.87, which would be construed as a retest of the knee-jerk low at 18.51 recorded in the minutes immediately following earnings on October 23.
Let's notice that FB hit its absolute low on September 4 at 17.58 (in the aftermath of its May 18 IPO high at 45) and since has established two "higher lows" at 18.51 on Oct 23 and possibly today at 18.87.
Let's also notice that since Sep 4, FB has established two "higher highs" at 23.37 (Sep 19) and at 25.00 (Oct 24). The fact that we see higher lows and higher highs since Sep 4 argues that for now FB is in an uptrend (as difficult as that is to believe), which also suggests that a pivot low in and around the 18.90/60 area followed by a strong advance will signal the start of a new up-leg within the Sep-Nov "uptrend."
Sinisa Persich, On Free Stock Picks: AUO, FSLR, GPRE & OMCL (TraderHr.com)
AU Optronics (AUO) on Friday peeked above the upper trendline of the wedge pattern it has been in for the past two months. The pattern represents a rest/consolidation period off the big run-up from 2.75 to nearly 4 in August and early September.
Friday's move positions the stock to break out to the 4.40 area, which is resistance going back to July, our short-term target.
First Solar (FSLR) is in a similar wedge pattern as AUO, going back more than two months, after its August surge from below 15 to over 25. A move above the upper trendline in the 26.40 area would confirm a breakout, with a short-term target of 28.80.
Green Plains Renewable Energy (GPRE)is in a short-term flag off its Halloween gap up from 6 to 7.75. The stock has more than doubled since late July, and a break above 8.10, last reached in early May, would confirm continuation of the trend.
Our short-term target is 8.70.
Omnicell Inc. (OMCL) looks like it may be setting up for a trend reversal after being as high as 17.75 in January of this year. The stock has been butting up against resistance in the 15 area that has contained price for six months.
A move through 15 could get the stock quickly to 15.50, our short-term target.
Harry Boxer, On Longs & Shorts to Watch (TheTechTrader.com)
It was a very quiet day on Wall Street on Monday, a low volume day with less the 300,000 shares traded on the New York Stock Exchange. That was the lowest volume in ten or more years. There was some volatility on stocks up and down, so let's go over some on the long and short side.
Gilead Sciences Inc. (GILD) had a big pop on Monday. The angle of decent shows this stock moving beautifully from the mid 40's into the mid 70's over the last 7 or 8 months. The key on Monday was a big breakaway gap and run up near 9 points at 8.92 to 73.93, or 14%, on 31 million shares. That's the biggest volume since August. Although it's at the top of the channel, this stock could run to much higher levels, possibly to the mid 90's on an intermediate basis.
Sarepta Therapeutics, Inc. (SRPT) may be the star of the day on Monday, jumping 4.38 to 27.13, or 19%, on 3.9 million shares. More importantly, it's coming out to key lateral resistance, and the best close in about 3 1/2 weeks. At this point, look for a test of the 29 zone for the short-term target, and then a secondary target at about 33-33 1/2.
Stocks on the Short Side...
Align Technology Inc. (ALGN), after getting smacked and bouncing, formed a little bear consolidation. The next target is set at 21.
VeriFone Systems, Inc (PAY) popped in April-May, rolled over hard, formed several rising wedges, and looks like it's about to rollover again. Look for it to get through support at 26 1/2, followed by a move down to 20-21.
Other stocks on Harry's Charts of the Day are First Solar, Inc. (FSLR), Generac Holdings Inc. (GNRC), Perion Network Ltd (PERI), Research In Motion Limited (RIMM), Stamps.com Inc. (STMP), and Zale Corporation (ZLC).
Stocks on the short side included Acacia Research Corporation (ACTG), Casey's General Stores, Inc. (CASY), Diebold, Incorporated (DBD), Dollar General Corporation (DG), Ross Stores Inc. (ROST), Titan Machinery, Inc. (TITN).