Sunday, October 31, 2010

My Two Cents

When our nation heads to the voting booth this Tuesday, let them not miscalculate the importance of their decisions. Certainly the most anticipated mid-term elections in recent memory, a public outcry reigns supreme. Heavy on their minds are issues such as healthcare, unemployment, taxes, and the spending. Polls indicate a strong disdain for the current position our county is in. Can we be on the brink of a reversal of the misfortune we have been given?

The Tea Partys rise to prominence began with the ever increasing size and scope of government. True, President Bush started the spending. However it was created under a Democratically controlled Congress. But the Obama administration's wasteful squandering of our taxpayer money has hit heights never seen in our nation's history. TARP has become increasingly toxic both figuratively and fiscally. The program has failed on so many fronts it is hard to determine where to begin. Unemployment was to be confined to the 8% range. It is still well beyond that figure. The plan was designed to increase lending to small businesses. Guess what. Another bungle. Inspector general of TARP, Neil Barofsky, concedes that reimbursement to the American taxpayer regarding loans made to auto and financial instituitons is doubtful at best. Amazing how fast incumbent Senate hopefuls are distancing themselves from their previous support of the bill.

Taxes have rocked the boat within the country. Whether it be related to individual, corporate, or investment. The confusion of where rates are and may be, define the opaqueness of the present administration. Our corporate rate of 35% is one of the highest in the world. That steep price tag reduces American competitveness abroad. It decreases foreign capital investment. It affects joblessness. Estate taxes are set to soar next year. Capital gains and taxes on dividends are set to take off as well. This type of behavior is not bullish. Buisnesses and individuals will have less motivation to take risk and create corporations. They will be less likely to invest in equipment, less likely to hire. Not a good environment with an economy trying to mend itself.

Healthcare has stirred a vigourous debate as well. The enormous bill passed back in March, which had NOT one Republican support it, is frowned upon by 60% of US citizens. Something supposedly so transformational lacking bi-partisan support? It was passed so hastily that many politicans admittedly never reading the entire package. Lawsuits in 20 states are now proceeding calling into question the validity of Obamacare. The first time in our history the federal government has required all Americans to purchase something from them. Perilous times indeed.

Recall the phrase that is barely uttered anymore? "When America catches a cold the rest of the world sneezes?". Not so relevant anymore. Not withstanding the Nasdaq's massive 20% move since late August, US indexes trail their international counterparts. The S&P'S 6% YTD rise pales in comparison to Mexico, South Africa, South Korea, India and Hong Kong. Those formerly mentioned have tripled our measly gains. We are increasingly living in an global marketplace and we seem to be falling behind. China just announced that they developed the worlds fastest supercomputer, a feat that was ours since 2002.

People are becoming increasingly uncomfortable with the size and power of government. The partial ownership in public companies like General Motors and Citibank confirms Washingtion's thirst for control. Determining the salaries of executives at these corporations further demonstrates the clout they desire. The illegal confiscation of money from Chrysler bondholders and awarding unions who helped get him elected was troubling in myriad of ways. The forced $20 billion BP compensation fund, without due process, was premature in light of this weeks ruling that Haliburton contributed mightily to the spill. Do we now coerce a compensation fund from Haliburton? Our elected officials seem to take Americans short term memory for granted. I remember all the previously mentioned events. I imagine that a lot of our citizens will remind him Tuesday, they remember too.

Weekend Stock Reflections

Markets seem content to wait on the sidelines until the barrage of big data comes next week. Election, Fed meeting and job report. Economic data on Friday had GDP as expected and Chicago Purchasers Index beating forecasts. The market seemed to yawn at the terror scare, and should be taken bullishly. That being said things could change very quickly this week. As always let the price action dictate your moves. Not your emotions.

Stocks forming specific buy points include: MUR @67.34, CP @66.82, EXPD @50.66, PM @59.95, ADM @34.13, NFX @61.10. All those were 3 week tight patterns. Cup with handle formations are: TCK @46.48, SWC @18.26, DOV @55.07, CAKE @29.88. Four week tight patterns are: MRO @36.43, VALE @33.35, NKE @83.50, DVA @72.60. WFMI @40.43, a double bottom with handle base. MUR EXPD ADM WFMI MRO DVA all have earnings this week.

Stocks that should find support at their 50 day are: VNO @86, CHRW @69, BBD @20, CB @56.75, CAT @75, MRX @29.20, WRC @50, COST @61.75. Stocks currently holding their 50 day are CMI CNI. FMX BLL both bolted after finding 50 day support recently. CTSH has earnings Monday AM. Look for support at its 50 day near 63.50 to hold. VRSN hit support at its 50 day then went higher much like HS and CHRW did last week.

Buy stops can be put in on ARMH @18.25, NEM @62, both if they can pass thru there 50 day moving MA. Like AKAM did recently.NEM reports earnings on Tuesday.


Stocks that have moved thru their 200 day MA are: MRVL APC SGY PXP BCSI RHI. Watch how these act and buy if they retreat back to the 200 day quietly and can rebound. EGO should find support near 16, its 200 day MA. RIMM looks like it wants to challenge its 200 day near 60 this week.

CEDC is an old favorite of mine. It is rounding out a long saucer like base. Its now above its 50 day and should challenge its 200 day in the near future. KKR is back in town. Keep an eye on that recent IPO.

Lets see how HOT and CVX react this week after disappointing reactions to their earnings reports. 50 day MA for HOT @52, CVX @80 could be challenged.

CNX a laggard in the coal group hit resistance at its 200 day just above 41 on 10/14. Now its hitting its 50 day after an earnings miss. Not looking pretty. TSL is losing its battle with its 50 day too.

Good luck.

The author owns postions in CRM ORCL CAKE SMG RADS.

Friday, October 29, 2010

Am Musings

In front of GDP this morning, then an election, QE2, and a job number next Friday investors are not willing to place any big bets. Volume was tame and the Nasdaq, the leading index of late turned in a volatile day. Up, down then up again. Casinos were among the strong sectors of the day. Earnings after the close from MSFT boosted the stock almost 3%.

Stocks that should find supoort at their MAs are: BAM @28, CPX @21, CAT @75. All their 50 day MA. BLL bolted off its 50 day MA today after finding support there. CRM held its 50 Thursday. Stocks that can be bought as they approach their 200 day MA are: AA @12.25 APC @58. BCSI GS continue to move further from their 200 day MA. RIMM seems destined for a meeting of its 200 day @ 59.50.

NBL broke out from a 79.16 cup with handle formation, and OVTI continues to act well after a breakout from a 25.75 buy point in a double bottom with handle formation. Leading stocks are a good barometer for the health of a markets rally.

AMP LVS had a bullish earnings gap up. Recent gap ups still holding up well include GOOG RVBD TDC EBAY XXIA BMC.

ARMH can be bought as it passes 18.25 reclaiming its 50 day MA. Much like AKAM did a couple days ago.

SLB WLT continue to build the right sides of their bases. CLF had earnings after the close yesterday. It disappointed. Lets see if its 200 day MA will hold near 59.

HS, like CHRW this week, plunged on earnings early only to find support at you guessed it, its 50 day MA. Technical analysis works.

Good luck.

The author owns ORCL RADS SMG CAKE CRM.

Thursday, October 28, 2010

AM Meandering

Yesterday the market made another decent showing. Down most of the day on strong US dollar, mixed economic data and fears of overblown QE2 rattled markets early. But displaying true bullish form the indexes battled back in the last hour, closing lower but near highs of the day. Semis led the way with the SOX gaining more than 3%. Transports and restaurant groups were the laggards of the day. Volume came in a bit higher. Earnings today include MMM DOW XOM MSFT CL KLAC.

Stocks that can be bought at the all important moving averages if they hold there include: CP @62, WLL @95, AMT @49.50, BLL @59.50, IBN @48, MRX @29, AEM @68, JOYG @66, CTSH @64, PFE @17, BBD @20. All previous stocks are there 50 day MA. If they can show support there they can be purchased. ARUN bolted after finding support there today for an example. CRZO seems to be finding support there as well. Stocks that should find support at their 200 day MA are EGO @16, AA @12.25, NEM @56.

BCSI which screamed 10% higher on 9/1 reclaiming its 50 day, has now in the last few days has taken out its 200 day. Lets see if it can show it belongs above that line. GS did it recently and now looks solid. MEE took out its 200 day last week and now looks strong as well.

JWN is now sporting a 40.09 buy pt. in a double bottom with handle formation. Look for solid volume. CVLT is holding its recent breakout above 28.59. Bullish behavior indeed. A (Agilent) looks like its building its right side of its base.

BRCM FFIV both displayed very bullish gap ups on there earnings. Any weakness here can be bought if the gap holds. Stocks holding their recent gap up here are EBAY PH GPC COH.

CHRW plunged on earnings yesterday only to find support at its 50 day and close at its highs of the day. Chart looks similar to CNI CMI, both of which were hit hard on earnings also finding support at their 50 day lines. However they did not rally of that line like CHRW did. Lets see if the coming days provide that crucial support at the 50 day MA.

And finally a good example of why you wait for price confirmation on breakouts. Look at TKC which showed a bullish cup with handle buy point of 19.48. Anyone who tried to be cute and purchase prematurely took almost a 6% haircut today.

Portfolio changes include long CRM @115.

Good luck.

The author owns CRM ORCL RADS SMG CAKE.

Tuesday, October 26, 2010

AM Musings

Stocks gave back good chunks of their gains in the final hour, however remaining up slightly on the day. Semis, silver stocks and online travel groups performed well. Look at PCLN TZOO. Volume was a bit lower than normal. Many stocks in the energy group reversed and closed upon their lows.

In that energy sector APC continues to perform well and anyone who had the courage to buy that one after its association with BP in the Gulf oil spill has been handsomely rewarded. RIG continues to meet resistance at its 200 day MA. MT in the steel sector also is still struggling with that line as well. However if it can bust thru that line put in a buy stop on MT @36.05. JCI now has a buy point of 35.87 from a cup without handle pattern, unless it decides to form a handle. Be patient and wait for volume and price action to confirm the move.

AKAM has now pushed above its 50 day MA. Lets see how it responds there. Could be bullish. RAX 50 day line holding for now too. ARMH is right there now as well. Can be bought @17.90. BCSI has now fought its way past its 200 day MA. Give it a couple days that it belongs there.

BUCY closed upon its low for the second consecutive day, but above its 50 day MA. If it pierces that line could mean a trip to the 200 day MA lower. Other shorts here could include VMW @81, CTXS @62.50 both their 50 day MAs. In that group however CRM is now challenging that 50 day. If it moves past it it could be bought with a buy stop @115.

We missed the big EMN move. Gapped up and blew away the 3 week tight pattern. Demonstrates the strength of the pattern though. Gap ups still holding include GPC XXIA WCC.

Portfolio changes were selling some energy names at the end of the day. Sold APA for a 3 point gain and WLL for a 7 point gain. They look a bit extended and nothing worse than letting a decent gain turn into a modest loss. Covered the AVGO for a 2.50 loss.

Good luck.

The author owns ORCL RADS SMG CAKE.

Saturday, October 23, 2010

Another Late-Blooming Newcomer

The countdown is on. With less than two weeks to the midterm elections, the stakes are heightened every day. Final debates become more riveting. Last minute gaffes in tight races prove costly. Poll fatigue is setting in with the phrases like "solid Republican," "toss-up," and "leans Democratic." Almost analogous to an Olympic athlete about to discover how his or her backbreaking preparation will result on game day, candidates on the exhausting campaign trail are about to realize how effectively their messages have been delivered. Sure, anti-incumbent sentiment is in the air. But some Senate hopefuls are becoming very adept at conveying just how they will change the status quo in Washington.

Take Ron Johnson of Wisconsin. A relative newcomer to politics, he breathes fresh air into the shady arena of politics. Emerging from obscurity, his small business success story has taken the state by storm. Speaking at tea party events, he essentially fell into the Republican forefront accidentally. His basic message is simple: Reform big government through fiscal responsibility, repeal Obamacare and lower taxes. His success as an entrepreneur and his background in accounting have resonated with voters. Frequently, on the campaign trail, he discusses the ratio of lawyers in the Senate to actual accountants and manufacturers. Not surprisingly, the latter is close to zero.

Johnson co-started his plastics company, Pacur, in 1979 with his brother-in-law and understands how to balance a budget. He appreciates the difficulty of meeting payroll deadlines. He is familiar with job creation. Pacur began with two employees and has grown to 120. Over the years, the corporation has led the medical packaging industry market for specialty plastics. Johnson is recognized by Wisconsin voters as someone who has the experience to help the state distance itself from the economic hardships facing the nation. The Wisconsin unemployment rate (just under 8%) is better than the national average. However, it's biggest city, Milwaukee, has been proclaimed by the Census Bureau to be the nation's fourth poorest city with a poverty rate of 27%.

Recent polling gives the edge to Johnson. The race is tightening, but Johnson has held the critical majority for some time. Feingold, pursuing a fourth consecutive Senate term, is below 50% which is considered dangerous territory for a long-standing incumbent. He is a rare Democrat that boasts voting for Obamacare but let's give him credit for voting against TARP. Seen as one of the most liberal Senators, he's against extending "tax cuts for the rich:" a seemingly endless mantra from the left these days. Additionally, being a life-long public servant is not seen as being part of the solution. Rightly or wrongly, it's increasingly being associated with the problem.

In recent debates, Feingold tried to paint Johnson as a political novice and a member of an out of touch Tea Party. Another head scratcher: does the left not understand that's precisely what an irritable nation wants? The public is growing impatient with the message of "it's the previous administration's fault." They want to elect a different breed of politician. Not the traditional lawyer, a life-long legislator. And most Americans can identify with the Tea Party movement for they are hard working, genuine and loyal citizens. Can Congress and the mainstream media really be this out of touch with their constituents?

Friday, October 22, 2010

Friday Night Charting

Friday was a lackluster day that ended with little fanfare. Digging deeper some positive tones appeared. Leading stocks displayed constructive action. BIDU CMG AMZN RVBD all accelerated in healthy volume. Volume was quiet as earnings season proceeds in benign fashion. Next week more reports will be given and so far the market has responded well. The days big winning groups included semis and restaurant groups.

Stocks sporting specific buy points include: CMI @94.97, EMN @80.322, DD @47.60, FDO @46.53, KMX @30.20, NKE @83.50, IBN @53.23, SMTC @21.08, BMS @34.35, DVA @72.60, MRO @36.10, NBL @79.16, ORLY @54.52, COH @45.05, CIB @67.89. All those previously mentioned were 3 weeks tight patterns. Cup with handle patterns are: TCK @46.48, TKC @19.48, PVH @64.23. And finally ADSK @35.28 is a cup without handle. As always buy only on big volume (50% more than avg daily volume) and do not buy premature. Let the price and volume confirm the breakout. Keep an eye on A as it builds the right side of its base.

Stocks rebounding off their 50 day MA are ARUN APKT ARMH NVDA. These all are exhibiting bullish behavior. Equities that can be bought off that 50 day MA are RAX @22, AMT @49. AA can be bought @12.25 off its 200 day MA. A buy stop can be placed on AKAM it it bursts thru its 50 day MA @48.25. Look for big volume of course.

Gap ups are also very bullish habits. Stocks that showed this specific situations are SLB RVBD XXIA. Buy these on weakness as long as the gap up holds. An example of this is GPC. It has held its gap up now for more than a week. That can be purchased here near 47.

Stocks and sectors showing weakness include solar names. JKS TSL both losing their 50 day MA. Bearish moves. Natural gas names like APA EOG ECA are showing decay. Mining equipments makers BUCY JOYG are looking shaky. MT RIG still finding resistance at their 200 day MA. Stocks that can be shorted as they approach their 50 day MA and fail are: CTXS @62, CRM @111, OPEN @60.

Portfolio changes were selling FCX for no gain or loss and buying CAKE @28.44 from a cup with handle base.

Good luck.

The author owns ORCL RADS SMG APA WLL CAKE. Short AVGO.

Thursday, October 21, 2010

Evening Thoughts

Stocks gyrated Thursday starting off powerfully, turning South, then inching into the green by the close. The erratic action gave the bulls and bears something to lay their hats on. Market shook off what could have been a real ugly reversal. Sectors that took the worst of it included the steel names, miners, drillers and semis.

Energy names were mixed but most lower. APC stood out today as it powered its way past its 200 day MA in good volume. MUR nearing a 66.37 buy point in a cup with high handle base. DOV closing in on its 55.07 buy point in a cup with handle base. On the downside RIG MT both seem be to be losing their battle with the 200 day. Steel names such as NUE MTL X all got beat up today. The group has been a laggard. Miners that continue to look weak include NEM ANV. Both lost additional ground as they slipped thru their 50 day MA.

Stocks that can be bought as they approach their 50 day MA are RAX @22, AMT @49, ARMH @17.50.

JWN lost its 200 day and now that line near 37 should become resistance. OPEN looks like its starting a downtrend after a long bull run. The plunge thru its 50 day which provided support all year long looks broken now. AKAM looks like a short @48 (50 day), unless it can bust thru.

On a bullish note PH GPC continue to hold their gap ups. KKR is a recent IPO to keep on the radar.

Good luck.

The author owns FCX ORCL WLL APA RADS SMG. Short AVGO.

AM Musings

Markets paired gains somewhat yesterday in a light volume rebound recouping little more than half of Tuesdays losses. A weak dollar and benign earnings reports were responsible. Earnings season is obviously in full swing with both NFLX EBAY trading higher in after market action. Today you can expect earnings reports from a number of Dow components. Big reports today come from MCD T AXP CAT AMZN FCX CMG.

Stocks forming specific buy points include: WLT @89.33, SOA @18.17, CE @34.90, TKC @19.48, DOV @55.07, CAKE @28.44. All previously mentioned were cup with handle patterns. Now these next four stocks have cup with high handles: MUR @66.57, PXD @74.59, JNPR @32.94, BUCY @75.98.

GOOG had an intraday reversal closing basically UNCH. Strange action for a good day and was responsible for most of the paired gains on the Nasdaq yesterday.

MT prepared for its 200 day MA battle. Put in a buy stop over 36 if it can muster the strength to pull away from that line of resistance.

Laggards that can not hide their stripes and fell yesterday on a positive day include PBR URBN VLTR. Keep an eye on these to short if they trend back to resistance lines and fail again.

Good luck.

The author owns FCX ORCL RADS WLL APA SMG. Short AVGO.

Wednesday, October 20, 2010

Tuesday, October 19, 2010

After Hours

Markets plunged today having their worst day in over 2 months. Volume exploded. Nearly every chart I looked at today and I look at hundreds was lower. Earnings after the close from JNPR CREE were met with big rounds of selling. As we spoke in yesterdays posting the reactions to the reports have turned unkind. Dollar explosion hit commodity related groups hard with machinery, energy, steel and miners hit hardest. Even tobacco and alcohol couldnt escape the markets carnage.

RIG CNX APC all seem to be now losing their personal battles with their 200 day MA. CLF NEM both lost their respective 50 day MAs. AEM did seem to find support at its 50 day @67. AA looks to challenge its 200 day tomorrow near 12.35. A sell stop can be put below the 50 day on JKS @26.75.

JWN is holding its 200 day at 37. If it doesnt hold a sell stop below that number can be placed.

OPEN sank thru its 50 day MA on big volume like a hot knife thru butter. Never a good sign.

Decent performances today include GS. It blew past its 200 day after good earnings this morning. A possible new uptrend developing. AAPL came back closing well off its lows of the days. INTU barely budged on this horrific day. Keep note of the relative strength there. NVDA also barely moved. Could that ORCL take over chatter have something to do with that? Only time will tell. Speaking of ORCL it closed on its highs and we bought some for the portfolio. FCX was also repurchased today.

Good luck.

The author owns FCX ORCL SMG WLL APA RADS. Short AVGO.

Monday, October 18, 2010

Late Night Charting

Markets rose on light volume Monday, but received a jolt after hours. Earnings reactions, not earnings misses from AAPL IBM VMW, ruled the late afternoon. The reactions themselves show a different feel as they have generally been benign thus far. Weak groups today included software and chips issues. Energy and some tech in general showed strength.

Oil and gas equities looked healthy today. APA is building the right side of its base. We are now up a nice amount since our purchase with a 98 handle off the 200 day 3 weeks ago. APC RIG EOG all are trying to establish themselves off that 200 day as well. XOM is looking durable again and is sporting a potential double bottom buy point of 70.10 now. BEXP has a cup with high handle buy point of 21.76 and WLT potentially has a 89.33 cup with handle buy point. SWC buy point could be 18.26 in a cup with handle formation. Wait another 2 days for the handle to form. The energy names seemed to benefit as CNBC had a headline segment "Why does everyone hate natural gas?". Perhaps enough negative sentiment to warrant a turnaround in the sector?

NEM ANV held their 50 day MAs today. Solid showing at that support level. CE has a 34.90 cup with handle buy point. EBAY building its right side of base.

With an extended market ripe after an obvious recent run up and bad reactions after hours in techs it could present a buying opportunity for some tech leaders that may sell off in general market sympathy. INTU @ 44, its 50 day MA. RADS @19. Back near its breakout point. ORCL near 28.50. Also buy some strong groups that may fall just because a falling tide sinks most stocks. Transports like UNP should be purchased.

FFIV CTXS AKAM were all weak before the after hours sell off. Again those big moves lower last week usually are never one time events.

Portfolio changes today were selling EXXI for a 2.50 gain. Poor action with big volume confirming.

Good luck.

The author owns APA WLL RADS SMG. Short AVGO

Sunday, October 17, 2010

Real Change? Yes We Can

With election season in full swing, this November Republicans are certain to win back the House of Representatives. Not a foregone conclusion was the fate of the Senate. Not even imagined just months ago, the reality is now becoming evident. Win 10 net seats and Senate control rests in the hands of the GOP. Seven seem assured, but obstacles in states such as California, Nevada, Illinois and Washington have Nancy Pelosi pondering her future after January 3rd next year.

Washington state seems to be the Republicans achilles heel. Some polls show incumbent Senator (D) Patti Murray exceeding her Republican opponent Dino Rossi by as many as 15 points. Others show a statistical dead heat. Results vary so much because most voters in the state mail in their ballot. One of the crucial issues that could decide the race is the inclusion of an income tax the state does not currently have. Most voters obviously are opposed to the legislation. Perhaps Rossi can drill that point home and upset Murray who is seeking a fourth consecutive term.

Nevada seems the most perplexing of the four. Harry Reid, aiming for a fifth successive term, is in a surprising deadlock with Republican Sharron Angle. The Senate Majority Leader since 2007 in a tight race with a practical newcomer speaks volumes about the sentiment voters across Nevada feel. The state which sports the worst unemployment rate in the country at more than 14%, has voters concerned. That topic dominated the only debate the two had this week. Reid believes that government is a better job creator while Angle is a private sector proponent. To demonstrate how astonishing and captivating this race is journalists from around the world came to cover the debate.

Illinois garners spotlight because it will fill the Senate seat left vacant by President Obama. An upset their would be not only a political blow but also a psychological one for Democrats. The contest between Democrat Alexi Giannoulias and Republican Mark Kirk seems destined for a photo finish. Polls their show a very close encounter, with the race getting ugly as the two paint economic and military scandals on one another. Kirk, an underdog of massive proportion, is fighting a battle in a state that Obama won with 62% of the vote in the 2008 Presidential election. Maybe that explains his multiple campaign visits to the state to support Giannoulias. Kirk who describes himself as a fiscal conservative and Giannoulias a liberal Democrat will probably have to wait until after that first Tuesday in November to find out who will emerge victorious.

California represents a difficult proposition for the GOP as the long serving Barbara Boxer faces off with former Hewlett Packard CEO Carly Fiorina. Fiorina has been gaining steadily in recent polls and her fundraising notably has matched her Democratic opponent. In liberal San Francisco (Boxer's home district), The Chronicle newspaper declining to endorse either candidate speaks volumes to Boxer's vulnerability. Fiorina has declared the state's fiscal situation as dire and seeks to cut government spending and decreasing taxes. Boxer tagged as one of the most liberal Senators still holds a slight edge over Fiorina. Yet another nail biter of a race that should have political junkies salivating the results.

Some media outlets are already conceding a Democratic defeat for control of the Senate and how it can be good for Obama. A bit premature, but completely possible. They draw the parallel of what happened when the Republicans in 1994 took control of the Senate in mid term elections during President Clintons first term. Clinton went on to enjoy record popularity and economic expansion. The only caveat was Republicans were in control and were directly responsible for the good fortune the President relished. The media is trying to have it both ways. Good if the Democrats keep command of the Senate, good if they do not. Suprised by the media's flip flopping? Hardly.

Saturday, October 16, 2010

Weekend Market Thoughts

Markets ended mixed Friday with the Nasdaq surging thanks to AAPL and GOOG (together the two comprise more then 10% of the index). Breadth on the indexes was not as healthy as it looks on first blush. Volume rose on the indexes, although Friday was a option expiration day. Nasdaq was the big gainer of the week gaining almost 3%. New York Empire Index and retail sales exceeded expectations.

Stocks setting up specific buy points include: CAM @44.60, SGY @17.45 (both cup with handles). ORLY @54.52, DISCA @44.49 (both 4 week tight patterns). CIB @67.89 3 weeks tight pattern. BEXP @21.76 (cup with high handle).

Stocks that can be bought as they retreat to their 50 day MA: RAX @22, AMT @49, ANV @24. NEM found support at its 50 day MA @61 again. Stocks near that 50 day MA include: AKAM is testing that line @48. If it can get thru 48.25 put in a buy stop there. APD can be bought as it nears 80, its 50 day MA and back to its double bottom buy point @80.34. OPEN with its volatile nature could test its 50 day @60 this week. Stock is illiquid but it has demonstrated great relative strength this year.

ORCL has acted real well after a recent gap up and can be bought near 28. DE is holding its recent gap up to. GPC had a very bullish gap up on Friday.

SLB has been trading above its 200 day for a week now. Establishing itself nicely. PXP has done that as well. Buy PXP @27 its 200 day MA. EOG has been trying to stay afloat from that line now. Or is it forming a bearish head and shoulders pattern? Let the market tell you once again.

HES is building its right side and the transports had a monster week thanks to CSX earnings. UNP is the undisputed leader in that sector. Any weakness needs to be taken advantage of. Low 80s look good.

ETFs that look strong are FXI. Beautiful gap up 10/13. Try and buy near 45 if you can. TBT broke a downtrend last couple of days as it surged past its 50 day MA in big volume.

VMW failed at its 50 day MA @82. Lets see how CRM @111 and CTXS @62 do there at their 50 day MAs. CRUS has failed at its 50 day.

Got stopped on WFMI for a 2 point loss. Bought RADS @19.42 as it broke out from a square box pattern.

Good luck.

The author owns EXXI APA WLL SMG RADS. Short AVGO.

Thursday, October 14, 2010

Wednesday Morning

Markets rallied again in healthy volume as a myriad of sectors performed well. Transports, commodities were robust. Indexes certainly didnt get any help for earning reports from JPM INTC, both of which finished lower. CSX delivered a powerful performance via earnings. For all three of my readers I apologize for the misunderstanding regarding earnings reports from IBM VMW AAPL. I misspoke and take full responsibility. They report next Monday. The market itself feels extended but its been running strong since September. Play the trend. Remember the Keynes quote, "markets can remain irrational longer than you and I can remain solvent". To me it feels like a real bull market. It has the feeling of not giving you a chance to get in. Very bullish behavior indeed. Let the volume and price action dictate your trading as always. Not your own personal opinions.

Stocks showing specific buy points include: ADSK @33.70 VALE @32.94 (both cup with handles). QSFT @25.29 (3 weeks tight pattern). TCK @47.02 in a cup without handle, however it may from one in the near future. RADS @19.42 (square box pattern).

MT can be purchased thru 36.25 (200 day), RIG thru 68 its 200 day as well. RIG has traded beautifully as we flagged it holding its 50 day MA @50 in early August on an earnings beat and then a retest of that 50 day MA later in August. Could the news this week of Obamas lifting of the offshore drilling moratorium be priced in? Again let the price action in the stock guide you. XOM chart in this sector looks like AA SGY. Both recently plowing thru their respective 200 day MAs. They are laggards though. Will they play catch up? Again who knows. Let the chart tell you.

ORCL posted a very bullish upside reversal intraday breaking out from a tight consolidation pattern. WYNN can be bought near par. That break thru 100 looks significant.

Techs getting closer to their 50 day MA for a test still include the software names. VMW @82, CRM @111. AKAM found resistance at its 50 day Wednesday. So did CRUS. CREE is there now. Lets see how they perform there.

We bought some SMG @52.66 as it emerged from a 3 weeks tight pattern on big volume. Got stopped on PSA for a small loss at it broke above its 50 day. WFMI is on a tight leash here.

Good luck.

The author owns EXXI APA WLL SMG. Short AVGO PSA.

Wednesday, October 13, 2010

Tuesday Am

Another day, another bullish move. Early weakness gave way to late strength. Stocks finished with a push into the close with the Nasdaq leading the way. After the close INTC beat estimates and guided higher for Q4. CSX also beat the numbers. Today JPM AAPL VMW TXN IBM all report. Fed minutes revealed members are favoring more easing.

Stocks sporting specific buy points include: ADSK @33.70 and VALE @32.94 (both cup with handles), DTV @42.71 and SLW @27.41 (both 3 weeks tight) and QCOM @45.85 (double bottom with handle). TCK is building the right side of its base and a potential buy spot is 20.09 . However it could form a handle. Be patient and see what develops.

Stocks finding support near their 50 day MA are: CTSH ARUN NEM ENTR. All bullish signs when that line holds and the chart continues its uptrend.

RIG is approaching its 200 day MA near 67. Lets see how that one responds there. IBN continues to look great after its recent gap up. If UNP trades in the low 80s this week lets try and buy some there.

VMW reports today and it could try and test its 50 day MA near 81. Lets see if that resistance holds now. Others that will react to VMW earnings include CRM CTXS.

Good luck.

The author owns EXXI APA WLL. Short WFMI PSA AVGO.

Monday, October 11, 2010

Monday Monday

Markets finished flat today after a low volume Columbus day. Some M & A today as GYMB got an offer. Solar, ag and casino stocks all were the strong groups. Big earnings releases this week from the likes of CSX INTC GOOG JPM among others.

Stocks with specific buy points are: XEC @77.21 double bottom. Want to see big volume as always. SWC @17.52 (cup with handle). Just about there. LOGI broke out today @17.94 from a double bottom. Lets see how it performs.

Gap ups still holding up bullishly are: DE IBN AMSC NKE.

CRZO MCO strong after breaking thru 200 day MA. AA SGY just recently broke thru their 200 day and can be bought if they retreat back toward that line as resistance now becomes support.

ARMH can be bought near its 50 day MA @17. FMX has rallied smartly off that line in big volume. Very bullish. Lets see if PVH forms a handle here.

On the downside the software names that got crunched last week got pounded today. They are now short candidates as they venture back to their 5o day MAs. TSLA can be shorted under 20.

Good luck.

The author owns EXXI APA WLL. Short AVGO PSA WFMI.

Saturday, October 9, 2010

Weekend Warrior

Another bullish day with markets opening on their modest lows and closing near their highs for the day. Good action with poor news regarding the jobs picture, is another bullish signal. Volume rose on the indexes as market participants betted on QE2 materializing to inject liquidity into the system. Ag stocks had a banner day and energy as well as the Feds anticipated purchase of long term treasury debt (quantitative easing) will increase bond prices. In that scenario interest rates will decrease and therefor our currency as well. Falling dollar=stronger commodity prices. Enough said.

Stocks creating specific buy points are: 3 week tight patterns QSFT @25.29, SLW @27.41, ORLY @54.52, DISCA @44.49, DTV @42.71. Double bottom patterns: XEC @77.21, JWN @40.66, FAST @55.95. Double bottom with handle: A @34.38. Cup with handle patterns: NBL @77.73, SWC @17.52.

APC can be bought thru its 200 day MA @59 and MT thru its line as well @36.25. RADS can be bought thru 19.42.

Recent leaders we can try and catch on a low volume retreat to their 50 day MA this week are: CTSH @62, VIT @30, AAP @56, ARMH @17, ALTR @27, SWKS @19, AXTI @6.

Software and computer related names got hit this week after cloud computing worries. Stocks that can be shorted as they try and test their 50 day MAs are: VMW @82, CTXS @62, CNQR @48.25, CRM @110, AKAM @47, FFIV here. If you put a gun to my head and made me play from the long side I would play the ones that held above their 50 day MA during the carnage. Names like ROVI INFA RAX RVBD.

Stocks forming the right side of their bases are: PVH CAKE SOA CE. Lets look for VALE to form a handle this week. XOM peaked it eyes over its 200 day on Friday and it looks like WLT will be headed toward par in the near future.

Some retail performed well this week. WRC continues to perform well after a recent breakout @52.21. LULU blasted thru a 46.67 double bottom with handle pattern. On downside URBN looks like a broken chart.

INTU performing admirably since its 8/20 gap up. TIBX, which I regrettably got stopped on held its gap up almost to the penny.

Good luck.

The author owns EXXI APA WLL. Short AVGO PSA WFMI

Thursday, October 7, 2010

After Market

Markets sputtered to a mixed finish despite decent jobs numbers. Volume sank in anticipation of tomorrows big job number. Leisure stocks got hit today with the likes of HOT MAR PCLN falling in heavy volume. After the close AA started the earnings season on the right foot. Shares were higher after hours. Gold took it on the chin today mapping a bearish downward reversal.

CPX BEXP XEC WLL all showed decent relative strength despite oil stocks showing general weakness. APC still having trouble with that 200 day MA. If it can break thru though @58.40 the scenario becomes bullish. PBR is a shining example of what happens when government interference takes place in a stock.

MCO JWN both continue to trade admirably higher after finding support at their 200 day MA. TEN can be bought @27.20 and SWKS can be bought @19. Both their 50 day MA.

Changes to the portfolio today were shorting WFMI @35.75 as it pierced its 200 day MA.

Good luck.

The author owns EXXI WLL APA. Short AVGO PSA WFMI.

November Rain?

This January, when Connecticut Senator Chris Dodd announced he wouldn't be seeking re-election, Democrats scrambled to find a viable replacement. Dodd, who was Connecticut's longest serving Senator, was embroiled in financial scandals difficult to overcome. Enter Richard Blumenthal. The state's Attorney General since 1991 has held substantial leads against all potential Republican opponents. A spirited run from former WWE chairwoman Linda McMahon has Democrats worried as election day closes in upon us. Recent polls show the race tighteneing in a contest that may decide the control of the Senate.

Let's be frank here: Connecticut, a state in a traditionally blue region, presents an uphill battle for Republicans. However, the anti-establishment frenzy spreading throughout the nation has left its mark on the Nutmeg state whose Senate seat was once a foregone conclusion for Democrats. President Obama's state approval rating has fallen from 61% in 2008 to a low of 45% this month. Perhaps this is why Blumenthal has chosen to disassociate himself from Obama's campaign support...

Blumenthal enjoys many positive developments as the November race nears. Seven of ten residents strongly approve of his performance as Attorney General. The state's approval ratings for the repeal of health care and support for Arizona's anti-immigration law hover on the low end of the spectrum. During debates and traveling on the campaign trail, Blumenthal has moved toward the center in an attempt to placate voters. He's stated his oppositon to TARP and stimulus, maintained his support for both the "war on terror" and the death penalty. Not your prototypical Democrat.

McMahon, a self-made millionaire who's invested as much as $50 million of her own money in her campaign, is clearly the underdog. She's running as an anti-government, low tax, job creator. Known as the brains behind the uber-successful WWE, McMahon was instrumental in transforming the company from a small time local operator to an international phenom. She's aiming to surf the growing wave of public anger surrounding the economy and fiscal irresponsiblity.

As we'll see in November, the battle brewing in Connecticut is similar to that in many other states. This is Blumenthal's race to lose. But being a lifelong government employee, he's seen by many as part of the problem and not the solution. McMahon, a proven entrepreneur and job creator, will be viewed favorably. Who knows how the race will play out in this crazy world of politics. But come the first Tuesday in November, Democrats will be up well into the wee hours of Wednesday biting their fingernails.

Market Thoughts

An interesting day for the equity markets Wednesday. Commodities enjoyed healthy gains where as techs took a slashing. Anything tech related was whiplashed. Especially software names. But many tech leaders were bruised. VMW CRM RHT CTXS RVBD FFIV RAX NTAP AKAM PCLN. None survived the on slaught. These are rarely one day events, but with this psychotic market you never know. Volume was mixed and energy was strong.

Stocks sporting specific buy points include: MAR @38.25 (cup without handle), CLF @68.93 SWC @17.52 (both cup with handles), NOV @46.97 (double bottom), NSC @60.90 (double bottom with handle).

In the energy sector XOM thru 64.25 and APC thru 59 can be bought as they pass thru their 200 day MA. ANR did it yesterday on nice volume. SLB is no trading above that line too. XEC GSM both looking good in that group as well.

Stocks that can be bought as they approach their 50 day MA are CB @55 AAP @56.

JWN MCO continue to hold above their 200 day MA. WRC looking good after its break out @52.21

Lets see if DOV forms a handle. Stock looks strong as it forms its right side.

Stocks flirting with their MAs include WFMI APKT. Short stops can be put on both if they fall below those lines. APKT @33.75 (50 day) and WFMI @35.75 (200 day).

Sometimes a good defense is better than a good offense. Recent sales of AKAM @51 and CRUS @17.50 look good now. Perhaps lucky but good discipline always proves wise.

Portfolio went thru some changes yesterday. Stopped out for 1 dollar loss on TIBX. Sold my A for a push. Sold my FCX for a nice gain. AMT as well. Might reenter these in near future. Was just gut feeling to get out. Maybe overextended.

Good luck.

The author owns EXXI WLL APA. Short AVGO PSA.

Wednesday, October 6, 2010

Morning Thoughts

Markets ripped higher Tuesday with increased volume confirming big players buying up shares. Basically every sector was higher with crude and gold enjoying strong sessions thanks to the weaker dollar. The service sector surprise as well as Japan lowering interest rates contributed to the powerful day for equities. Breadth was obviously healthy.

Stocks that are forming specific buy points are: cup with handles include MAR @38.25, NBL @77.73, CE @33.10, TD @75.86. Cup without handle is BEXP @21.25. Double bottom for NOV @46.97. Double bottom with handle CSX @56.90.

PXD broke out yesterday from a cup with handle at 67.87. Lets see how that one continues to develop. CLR thru 49 to confirm its double bottom pattern can be bought. RADS held its 50 day in strong volume.

VALE CAKE building the right side and warrant inclusion on your watchlist.

Weak stocks that didnt perform on a banner day such as this include RBCN VLTR. Weak stocks on a strong tape signal tough times ahead. Lets try and short these as they move back toward their 200 day MA.

Good luck.


Tuesday, October 5, 2010

AM Meandering

Yesterdays selloff came in weak volume, but should be noted that Mondays have been exceptionally strong this year and that was not the case yesterday. VMW PCLN BIDU AAPL MELI were all weak. Leaders showing weakness can be a red flag. The Nasdaq was not helped by a GS downgrade of MSFT. A former leader with little revelance anymore, but compromises a large portion of the Nasdaq. A strong dollar put a damper on commodities as well.

VMW found support at its 50 day MA @82. A violation of that line could be shorted. Same can be said for CRM which found support at that line as well @110. These two former leaders breaking down thru that 50 day MA can be shorted at not be a good sign for the market itself as a whole.

As for the weak energy sector CPX WLL RES showed some decent relative strength. BEXP could form a handle in the next few days. Remember the handle must be 5 days long and form in lower volume.

DE found support at its 50 day MA. Lets see if that can hold in the next few days. Speaking of the 50 day MA lets see if ARUN @19 holds as well as 55 for CB.

Portfolio got stopped out on WYNN for a 2 point loss.

Good luck.


Sunday, October 3, 2010

A Banana Republic No More

Buried deep in the obscure pages of our newspapers, a former banana republic is predicted to see some stunning growth next year. When you think of a country with a 7% GDP increase, China, India or Brazil come to mind. But no, it's Panama. Huh? Not a typo. This country has made dazzling progress since the days of Manuel Noreiga's military rule some 20 years ago. Connecting Central America to South America, Panama has the fastest growing economy in Latin America. With a recent election, the most important canal in the world and the second largest free trade zone in the world; this nation has a lot going for it.

During the 1990's, Panama started one of the most successful privatization experiments the region has ever seen. Sectors as diverse as communications, railroads, highways, ports and cement were sold off by the state. The benefits of that operation have been long lasting. Companies from all over the globe showcased their skill and improved the way of life for Panama's citizens. Corporations like Kansas City Southern from the United States, the U.K.'s Cable & Wireless and Hutchinson Whampoa from Hong Kong all cooperated in this effort. Panama must be commended for realizing they didn't have the technology or resources to move their country into the fast growing future and in the process developed strong ties internationally. It's a win-win that's still paying dividends to this day.

Panama obvioulsy reaps the rewards of the famous Canal that connects the Atlantic and Pacific Oceans. The Canal, finished in 1914, has been wholly controlled by Panama since 1999. Shipping toll charges from international trade have been a big success for the country. The nation also enjoys the benefits from the Colon Free Trade Zone. The second largest free trading zone in the world, it's primarily used by Latin American countries. Business transactions are done solely in US dollars and the tax structure is extremely advantageous. Corporations must only pay taxes on business done inside the country. Revenues derived from outside the borders are tax free.

Panama's last election, which took place in May of 2009, was won in a landslide by conservative candidate Ricardo Martinelli whose win ended a long streak of left wing rulers. The supermarket mogul, who owns the Super 99 chain, has promised to fight crime and bolster education and transporation. He's also pursuing a 10% flat tax - a proven growth generator. A successful entrepreneur, Martinelli's election has aroused a trend of Central and South American politicians who demonstrate a real understanding of how business and economy truly work. In these fragile fiscal times, it's no wonder voters are running to the polls for real change.

When are we going to finally realize that shrinking taxes, free trade, and little government interference in the private sector are a recipe for real sustainable economic growth? Panama is a shining example of this success. As America de-privatizes companies like Citibank and GM (aka Government Motors) and Congress languishes on free trade pacts with both Panama and Colombia, the global marketplace is leaving us behind. Thank goodness November is only weeks away.

Sunday Sunday

Stocks finished a listless week of trading with none of the indexes gaining more than 1%. Leaders including NFLX PCLN BIDU AMZN continued to struggle, showing a little concern for the markets fledging rally. Volume was lower across the board. If history has any say this October markets should do fine. 7 of the last 9 Octobers in mid term elections years have been winners for markets. But of course we can not assume the markets will ride higher just based on this fact. Let the volume and price action dictate how we trade.

Stocks that have formed exact buy points include: NBL @77.63, BUCY @72.60, both cup with handle formations. Now we have 5 stocks that fit the 3 weeks tight pattern. All these have exhibited this bullish formation when there weekly charts finish 3 consecutive weeks within a tight 1% range. The stocks and buy points are: SQM @50.06 DTV @42.71 CNI @65.25 HAS @45.95 VRSN @32.27.

INFY had a powerful and as we know bullish earnings gap up. Keep it on your watchlist. CRM bounced off its 50 day MA in a bullish fashion.

Both DE and CB can be bought if they find support and bounce off their 50 day MA. DE @67 CB @55. SLB can be bought thru 63 and ANR thru 43.25 as they try to break free from their 200 day MA.

XEC now looking bullish again. In trading you have to be flexible and willing to change your opinion when the market tells you to do so. It can be bought thru 70 as it wrestles away from its 50 day and perhaps forms a double bottom pattern with an additional add on buy point of 77.21 or it could be a bearish head and shoulders pattern creeping back up to the neckline. Let the market tell us this week.

BEXP is forming its right side of base. Watchlist inclusion.

We were stopped out of CRUS for a 50 cent loss. Didnt like the price action, and we sold AKAM for a 4 point gain. Negative price action as well and looking to consolidate the portfolio.

Good luck.