Saturday, February 18, 2012

Saturday Setups and Market Outlook for Presidents Day Week - 2/18/12

 Hi traders - I don't have much to say on the overall market going into next week because basically the beat just goes on for this bull market.  I (along with many others) fully expected the market to finally rest and pullback after we saw a nasty reversal during Wednesday's session, but that pullback was nowhere to be found and we're still basically waiting.   I am not fighting it however - I am long and will continue to move my money around in long positions until the market clearly tells us it is ready to start a well-deserved pullback.  So far, that notice hasn't come.  It may come on Tuesday or it may come a month from now.  Until it does and as long as individual stocks are setting up, there is no play other than the long side.

I'm going to post some ETF charts here because there are some interesting developments in some sectors.   Yes, this market has indeed run a long way, but these charts are saying that some sectors may have even further to run.   Perhaps we'll see some rotation from strong sectors into lagging sectors instead of seeing an overall market pullback.

Financials are at a key level here - a breakout would be big for the market.

XLF

Real estate is forming a long-term cup with handle, and with TOL reporting this week, this sector will likely be in play.
IYR

Oil remains at a key level and is one reason I was watching many oil stocks last week.  I didn't see the follow-through I was hoping for by many of these names on Friday, but based on these charts, this remains a sector to watch going forward. 
OIH
 OIL

Gold and silver looks very interesting as well so keep an eye on names here like RIC and AG or maybe just the ultra ETFs like USLV or UGLD.

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

Here are the main setups I will be watching early next week.

AKAM
ARAY
CALX
COCO
Cup with Handles
ELX
FFN
MGAM
NEP

There are also some recent earnings plays that have started to form beautiful setups, but would ideally rest for a few more days.   I have mentioned many times my preference towards these setups in that they now have a catalyst to push them toward higher prices.

NSIT, FSL, KORS, AERL
All Charts from TC2000, Courtesy of Worden Brothers, Inc.

Enjoy the long weekend and best of luck trading next week.  If you have benefited this year from any of these setups or from my tweets on Twitter, please take a minute to leave a review.   Thank you.  As always, if you have any comments or questions about the above charts, feel free to email me.  If time allows, I'll post some earnings charts for the upcoming week so we can hopefully catch the next CAB or DMD from last week's reports.   Take care.

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