Down Day, But Stay Bullish Until Support Levels Are Broken

We did see some selling today on Wall Street along with some heavier volume, but considering the move up we've had, I don't think that's that big of a deal.   Support via the nine day EMAs still did hold today and although I wouldn't mind the market putting in a very quiet session tomorrow to rest further, it is possible days like this are all we may get in terms of rest.   It's been since December 30 that the Nasdaq closed below its nine day EMA and December 19 since the S&P did the same.   As long the nine day continues to hold on a closing basis, I have to remain bullish. 

Nasdaq

S&P 500

Patience is one of my weaknesses as a trader but I am working on it as best I can.  I held all my longs today and was only stopped on one (RDC).   I actually had a nice day via YNDX, OCZ, and EFII and will continue to hold them as long as the market doesn't break these levels.   If that happens (a breakdown), then I may go into more of a cash mode, but I don't want to predict when that happens.   This may very well be the type of slow, deliberate rally that we all were clamoring for over the past year and I don't want to miss it by being impatient and selling positions too quickly.   I have already made that mistake several times this year.   Of course, now that I write this, the market probably will tank tomorrow, right??

Here are a few names I am watching for tomorrow, although I don't really want to take many more positions on as I am almost full.   In addition to the charts below, I think TLB, ASIA, NTCT, INSM, and CISG are forming very nice flags but in these cases, I think a few more days of rest would help tremendously.   I also like VNET as a potential breakout play.  

ENZN

IDIX

JAZZ

MIPS

NLST

STMP

All Charts from TC2000, Courtesy of Worden Brothers, Inc.

Good luck Friday - let's see if the market can brush off today's selling and either rest or move higher into the weekend.  If things change, I will be ready but for now, let's give the bulls the benefit of the doubt - they've earned it.

Preparing for What Should Be One Crazy Day

Tonight I'm sharing some potential long setups for tomorrow as this market continues to act very bullish.   Today's dip was bought and every time my numbers get to levels that indicate a shakeout/pullback is close by, we have a slower day that allows those number to drift back to reasonable levels.   That's good and why I am still bullish.   However, tomorrow could be one of the craziest days we've had in a while.   We will likely start off with a big gap off the AAPL earnings, but the Fed comes later and that will likely cause fireworks as well.  I have no clue how everything will play out but just be ready for anything.   I will have no problem going to cash again or adding more longs - use discipline and common sense when considering any setup right now and make sure you use stops.

CAB

 CPA

 EFII

 EGHT

 LNKD

 LULU

 RDC

 TPX

 VIT

All Charts from TC2000, Courtesy of Worden Brothers, Inc.

Looking Ahead at A News-Filled and Earnings-Filled Week - 1/21/12

Hi traders - here's an overall look at the markets to get you ready for a very busy week ahead.   We saw a little intraday selling on Friday but stocks finished strong and a boring, slow day is a good, good thing sometimes on Wall Street (like when you've been up nine out of the last ten sessions on the Nasdaq).   Some of my indicators were reaching extremes Thursday and that is one reason I took a lot of profits that day, but I liked how those same indicators calmly pulled back because of Friday's action.   When they continue to get more and more extreme is when you have to worry about a major, sharp shakeout or reversal, but we may be able to avoid that. 

Both the Nasdaq and S&P continue to climb slowly but steadily and there is very little to complain about from a bull's perspective right now.   It would not be a bad thing for the market to pull back a bit here, but as long as the nine day moving average holds (like it did last Friday) then things are still fine.   Since we've been riding that moving average higher for about a month now (since December 22), a break of it on a closing basis would be a major warning signal to me and likely put me totally in cash.

Nasdaq

 S&P 500

Here are the main setups I am watching into Monday.   Before getting aggressively long again, I would ideally like to see another day or two early this week like we saw Friday that would allow the market to rest a bit (as we are a bit overbought) but that may not happen.   If I see setups trigger, I will take them - that's my basic outlook until the market shows us it is not a good time to go long.

OCZ

 RDC

 STMP

 Z

 ZIP

 

 BGC

 LULU

 CVGI

 DNDN

 ELX

Charts from TC2000, Courtesy of Worden Brothers, Inc.

There are other names I am watching but they are thinner (STRI, CCIH), more volatile (SKUL, VNET, BORN, AUMN, DATE, PACB, SONC) or need more rest right now (EGHT, AMSC) so I am not going to post their charts.   This is a huge week of earnings and I will be watching the pre-market and after-hours periods very closely looking for earnings plays.   Two stocks that were in my scans this weekend (ISSI and SRDX) have beautiful charts but because they report this week, I will pass until after their reports.   Here is an older post about trading earnings breakout.   Tomorrow I plan on putting a list of companies that report this week into TC2000 and pick charts that look like they are worth watching closely following their reports.   Here's a list from Finviz with stocks over $5 and 100K volume that report next week (although sometimes their info is spotty.) Always be ready.  

Good luck this week - along with the deluge of earnings, we also have the State of the Union address (Tuesday), a Fed meeting (Wednesday), and GDP (Friday).  If you can think of a bigger news week when you combine the earnings reports coming out, I'd like to know about it - it will likely be crazy.   Things look bullish overall and hopefully they will stay that way, but the news could definitely affect that outlook.   Take care.