Monday, June 2, 2008

Possible Head and Shoulders Top on Indexes, Oil Stocks Running Again

Here are the charts of the indexes. These don't look very bullish, even with volume being lower today and the market finishing off its lows. These are the numbers that need to hold: 2475 and then 2455 on the Nasdaq, and 1378 on the S&P 500. Bottom line - if these don't hold, watch out. Who knows, maybe they will. Selling wasn't extreme today, and I did not see a lot of breakdowns. At the same time, the VIX made a big jump today, and with these oils popping back up today, I worry that this pullback may have run its course. That would not be good for this market. Basically, I am taking the same approach I did yesterday - if the market follows-through on heavy volume, then I will get bullish. Until then, I remain somewhat bearish and looking more to the short side.

Nasdaq, S&P 500VIX

Here are a few stocks that I mentioned last night as looking good - they all broke down today.


Here are the two shorts I took today. If the market is headed lower, I think these can be very rewarding shorts. Stops will be pretty tight though just in case. I saw more candidates (listed below) pop up in my scans than I've had the past week or so. We'll see if that means anything.


I mentioned last night that many of these momo oil stocks had pulled back, and that they may be worth a shot. Well, since I wasn't at my computer for most of the day, I had no way to play any of these. Not saying for sure that I would, but it is somewhat frustrating to see them move like this and not be part of it. I continue to see very few oil stocks break down in a severe manner. Whereas a week or so ago I was expecting a major pullback in this sector, now I am not so sure. Maybe this is it. To be honest, I have no idea what to expect next - this is a very choppy and volatile sector right now. It would not surprise me to see these start moving higher (some already have - listed below) and if nothing else, I may try to play some of these as short-term swing trades.

Charts from Telechart2007, Courtesy of Worden Brothers, Inc.

Since the hockey game is coming on soon, I don't have time to put charts up for all of these stocks, but here are some ones to note that I found in my scans.

New stocks that I am adding to the watchlist (not buyable though): SYMX, BEAT

Stocks up on news today to add to the watchlist: ABMD(medical), ACOR(drugs), AVAN(drugs)

Stocks that are running in climatic fashion/very overextended: PCX, GMXR, BEXP, ANR, HK, MEE (coal stocks are going crazy)

Possible shorts to watch: MIDD, LNN, AG, CMED, FMCN, MCRS, CBI, YTEC, TBSI

Possible longs that are still looking OK: SATS, VRGY, VLTR, VLNC, STEC, VQ

Oil/Metal stocks I would consider for short-term trades: OMNI(my favorite), RAME, SIM, CPE, GGB, SNG, MMR, ALJ, EXXI, SPN, TSO

We'll see what tomorrow brings. Pay attention to those support levels mentioned above - I think they will be key. Oil will still likely affect the overall market, and as volatile as crude has been recently, that could make things difficult to play. Hopefully we can get a clear trend going soon. Best of luck Tuesday.


my25k said...


Thanks for putting up such nice content. I have one suggestion though, it is really very difficult to read the charts on your blog with black background and very light foreground colors. Please consider using a more contrasting colors.

Thanks again for posting.

Mac said...

I will look into it - I've tried to make them bigger so they show up a bit better. I use the colors to show the BOP indicator on the charts - that is why they might be harder to see. Unfortunately, I cannot lighten the background in Telechart except to make it completely white. Thanks for the comments.