Sunday, September 29, 2013

Stock Market Video - Outlook and Setups for Week of September 30, 2013 - "Tale of Two Markets"

Hi traders - here's the video for the week ahead.  It was an interesting week in that we saw some real weakness is big-time leading stocks early last week but for almost all of those leaders, that weakness turned out to be temporary.   The S&P continues to struggle to do much of anything positive but with the daily charts of the Nasdaq and Russell 2000 looking the way they do, it is hard to get bearish about much here.  Basically as IBD said this weekend, we kind of have two different markets here, and two are either going to bring the other one up or vice versa.   Since most individual stocks still look quite strong and bullish, I have to remain bullish going forward.   If we see more sessions like Monday without leaders bouncing back, then I will change my outlook.   Hope the setups help you out.   Good luck in the week ahead. 

=

Sunday, September 22, 2013

Stock Market Outlook and Setups for Week of September 23, 2013 - "Still Looking Good"

We saw another strong week on Wall Street as the Fed gave the market what it wanted with no tapering and the market acted accordingly.   Wednesday was a great day, and although the markets pulled back slightly on Thursday and Friday, that was completely expected and understandable and many individual stocks continue to put in great gains.  This continues to be a strong market overall. 

The major indices all still look fine on both a short and long-term basis.  The S&P is weakest of the three based on Friday's action, but as long as the indices close above their nine day exponential moving averages, you have to remain bullish and patient. 

Nasdaq
 Russell 2000
 S&P 500

My "Terrific Twenty" list was easier to narrow down this week than last as I didn't see as many overall setups in my scans, and that eliminates a lot of potential candidates.  Overall, the recent trends hold true - internet-related stocks, Chinese stocks, etc.  As it is, the stocks in this week's list are all acting very well and until I see some clear distribution in these names with moving average breakdowns, I see little reason to be bearish about anything.   Not many of these are at safe buy points as of now, but my three core long positions (had four but got shaken out of FB on Monday) are in this list and it pays to focus on these names for any new buys going forward.  Some may very well set up soon with a bit of rest and go much higher.

 AFOP FENG MEI TNGO
 AMBA, VIPS, XOOM, HIMX
 NFLX LNKD TSLA YELP
 NQ YY SFUN QIHU
 REGN NUS FB YNDX

Here is a quick spreadsheet view with some of the data I use with the Terrific Twenty as well as how I have them ranked this week.  This is a project I continue to fine tune and work on but I find it to be a great drill and forces me to really look at names and study who the true leaders are.


As I just said, I didn't see as many long setups in my scans this week, but perhaps that will change if the market can rest a few more days.  There are a lot of extended individual names out there simply due to the strength of the market the past two weeks, so hopefully you are already invested and have been holding strong names and making some nice gains.  The names I do see this week are shown below.

Good fundamentals - CSTE AMBA OSTK CAAS
 More Speculative Names - OSIR RSOL ANAC IQNT

One name that I have been watching for a few months now as a potential bottoming play is SKUL, and it popped on Friday on heavy volume and has my interest.  That volume pop may have been options related, but it did clear some important resistance around $6 and has been moving sideways for a while with very little selling volume.   Fundamentals don't look good (which makes sense given the chart) and they are not expected to improve until 2014, but just keep this name on your watchlists.  If it flags here above that former resistance, it might be worth tucking in an IRA as a long-term play. 

SKUL Daily
 SKUL Weekly
All Charts from TC2000, Courtesy of Worden Brothers, Inc.

Overall, things still look good although chasing longs that are extended is never a great idea.  Hopefully, you have been establishing positions over the last few weeks and are holding them.  I think the market could consolidate further or even pullback a few percentage points, which is why I still have a large temporary hedge on via SQQQ, but any pullback may not last long with the quarter ending over the next week.   September is traditionally a poor month on Wall Street, but it has been great in 2013.  Let's hope it ends on a strong note.  Best of luck in the week ahead. 

Saturday, September 14, 2013

Stock Market Video - Outlook and Setups for Week of September 16, 2013 - Bullish Signs Everywhere...

Hi traders - hope you had a good past week as the overall stock market continues to act very well.  We saw a key breakout for the Nasdaq on Monday, some follow-through on Tuesday, and some needed and relatively calm rest and consolidation the past three days.   Certainly a bit more sideways action would not be a bad thing at all, but there are enough setups in individual names that more rest may not happen.  All signs point to a market that wants to head higher, and unless geo-political events or the Fed get in the way, it certainly seems like a higher market is what we are in store for going forward. 

I thought a video would be easier this week as I am seeing a ton of individual setups.   It's a little long, but hopefully you will find it helpful and if you're not already long several names like I am, then perhaps you will find some possibilities that fit your trading style.   Good luck next week.  

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.

Monday, September 2, 2013

A Hank Schrader Market - "Tread Lightly..."

Market action has definitely deteriorated over the past few weeks with the indices across the board looking rather bearish from a technical perspective.  The Nasdaq is the only index currently above its fifty day moving average (barely) and distribution days have been racking up.  On the surface, it appears the market is in correction mode, although it is impossible to say if that correction is just a small 3-5% one or something more intermediate-term.  However, underneath the surface, many leading stocks are holding up very well and continue to chug higher even in the face of a market correcting.  This could be very bullish if the market can right itself. 

The Nasdaq is the strongest of the indexes at the current moment but looks like it could be putting in a head and shoulders topping pattern.  The action of the past four sessions smells very much like a bear flag, perhaps just delaying an inevitable drop below the key fifty day moving average.   If that breakdown occurs, it will be significant and will perhaps signal that a more intermediate-style correction is at hand.

Nasdaq Daily

Small caps were down nearly twice as much as the Nasdaq on Friday and looks to have broken a three-day bear flag pattern that was forming right below the fifty day moving average.   This index needs to get back above that fifty day before I would consider going long any smaller names.  

Russell 2000 Daily

The S&P and Financials are the weakest looking indices right now, as both are below their fifty day moving averages and have formed clear bear flags on the daily charts with confirming volume patterns.   It's going to take time for these two indices to bounce back and right the ship.

Financials Daily
S&P 500 Daily

A lot of the overall market direction going forward is going to depend on worldly events, namely the situation in Syria.   It doesn't seem like much clarity was given to that situation over the weekend with the President asking Congress (who are not in session right now I believe) for approval in striking against Syria.   If this situation remains uncertain, I don't know how it will be good for the market, but as of today, foreign markets are up which might bode well for Tuesday's open.   We shall see.  

Like I said earlier, a lot of charts are holding up very well which bodes well for the overall market if it can right itself quickly.   Nothing would surprise me here, but overall I would expect a lot of volatility over the next few weeks with perhaps not much overall movement (if that makes sense).  I share my "Terrific Twenty" list below for the week ahead and I would consider the names I starred below as potential longs but only if the market shows some strength.  

Terrific Twenty Part One
 Terrific Twenty Part Two
All Charts from TC2000, Courtesy of Worden Brothers, Inc.

Overall, with the Middle East situation as it is and the uncertainty that goes with it, this market will likely be very tricky going forward.   The best plan going forward might be (in the words of the infamous Walter White - SPOILER ALERT) to "tread lightly..."