Sunday, March 18, 2012

Market Outlook and Setups For Week Of March 19, 2012

Hi traders - sorry for the late post but I had a busy weekend working on some household projects.  Friday was a nice calm day which is a positive with a market that has been up seven out of the past eight sessions (for the S&P, including Friday).   I do think the market could use some rest or sideways action here, but I don't know if we'll get it.   Commodity names were big on Friday so money may be rotating that way, which could lead to further gains for the overall market as rotation takes place.  Perhaps some sectors will rest but the overall market could keep moving higher.

I saw a lot of nice charts in my scans this weekend but some already broke above the resistance levels that I would aim to buy (CYOU, IRE, EXH for example)at so I likely won't be chasing them with the market somewhat extended.   If we were coming off of a major pullback, I wouldn't have as much concern buying names that were up 7-8% the previous session.  

Since we had such a calm day on Friday, most if not all of the setups I shared Thursday night are still valid.   Here are a few others that are near important trendlines and could run if they bust through - however be aware that because the market is a bit extended, you could see some whipsaw action on breakout plays.   I seemed to catch a lot of those whipsaws last week, but perhaps that was just bad luck or bad trading on my part.
All Charts from TC2000, Courtesy of Worden Brothers, Inc.

Ideally, I would like to see a few days of rest early in the week and allow some of the leading stocks of this market to set up better, but who knows if that happens?   My gameplan really hasn't changed - go long stocks that appear to be breaking out and hope I get some luck.   IPOs remain hot so keep them on your watchlists and see if they consolidate into nice patterns.  My two favorite stocks right now are both recent IPOs but need some rest before I would consider entering.   As always, I will be watching the short-term moving averages for the indices on any selling - as long as they hold, then your focus should remain solely on the long side.  Good luck this week.

1 comment:

Anonymous said...

death trap, still can't smell it?

mini me