Saturday, January 21, 2012

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.
 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.

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. 

1 comment:

Anonymous said...

Great blog entry. And I like the slideshow type format of your watchlist. It allows for going at one's own pace (as opposed to a video). Then again I enjoy your videos two. How's that for wishy washy ? -- Shoulda been a politician. Thanks! - Steve Clem