Sunday, September 8, 2013

Bullish Week, But Uncertainity Remains

Hi traders.  The Labor Day trading week proved to be an interesting one.  The market looked toppy entering last week, but underneath the surface there were many individual names setting up nicely.  The individual names won out, as the market was up all four days, including a very impressive session on Friday where a nasty fade took place in the first hour of trading but those losses were regained throughout the day and the market finished flat to slightly positive.  

Going forward, however, there remains a lot of uncertainity.  The Nasdaq is without question the leading index here as it is the only one that held its fifty day moving average and remains above that key level.  The daily chart on the Nasdaq looks quite bullish as there were several days of accumulation this week and as of now, it appears the month of August was simply a consolidation period.  A move above 3677 and then 3684 would be extremely bullish for the Nasdaq.

 Nasdaq

The S&P and Russell, on the other hand, remain stuck below their respective fifty day moving averages and still look somewhat like bear flags.  If they can clear Friday's highs, it will be huge as it will put both above that key moving average and eliminate the look of the bear flags. 

Russell 2000
 S&P 500

The financials look weakest of all to me here and although I am not calling for the market to fall back into correction mode, this would be the number one area to look for shorts if that happens.  

XLF


Since I am back at work full-time now and can't watch the market all day, I have adjusted my strategies a bit, focusing only on the top stocks in the market that are a little more liquid and that I may not have to "watch" as much or as closely.   This is why I have been writing about my "Terrific Twenty" list for the past month or so.  There is not a strict criteria for this list - I simply go through my watchlists and pick what I think are the top twenty stocks in the market based on momentum, charts, earnings growth, and "visibility" in terms of being well followed.   Some names don't fit all of those criteria, but it is a discretionary list.  

The list changes each week, but the list last week had more potential setups in it that this week's list does.  The twenty charts are below, documents with symbols to show how I would currently view their charts.  The check shows a chart that could be a potential buy in the week ahead.  A question mark shows a chart that needs a bit more rest but could be buyable soon.  A "no" symbol shows a chart that is not buyable here, most likely because it is too extended and need to consolidate.   Obviously, these are not specific recommendations - do your own research and have your own plan.

AFOP, QIHU, SPLK, ZLC
CSTE, CYD, YY, SFUN
 KONG, JAZZ, MEI, BLOX
 NFLX, GMCR, TSLA, LNKD
 NUS, YELP, FB, NQ

I didn't see too many other stocks of interest in my scans outside of my "Terrific Twenty" but I am also fully invested here so perhaps that is expected.  I show a few possibilities below.  

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

With Syria still hanging over the head of the market along with the "taper/no taper" debate, it will likely be a volatile market going forward.   I liked the action this past week and if the markets can clear Friday's high on preferably higher volume, September 2013 might not be the historically bad month that it normally is.  That's a big "if" however.   Good luck.

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