Wednesday, January 19, 2011

Wednesday Thoughts

Markets took it on the chin Wednesday after a weak GS forecast led the banks lower and CREE took the semis lower as well. Semis and ags took the most damage and these two sectors were recent leading groups. Go under the hood a little further and the price and volume action today among leading stocks in general was dismal. Leading stocks are a good barometer of the health of a rally and todays action took me to the sidelines and into cash. I want to protect gains and preserve capital. I can always revisit and of course I am still bullish but with the amount of optimism I fear a near term and healthy correction. Earnings weeks are always volatile and that may be the case today and I could very well be wrong, but its just a feel. As well half my portfolio was reporting earnings tonite or sometime tomorrow. Earnings before tomorrows open are FCX JCI MS UNP. After the close are GOOG MXIM MSCC.

Stocks that did however show good relative strength today in techland amidst a horrible Nasdaq tape include BMC ORCL. BMC has a 49.21 flat base buy point and ORCL has a 32.37 flat base buy point as well. For both of those stocks to close in the black today deserve close attention.

Other stocks showing strong realtive strength today in a downbeat market include RTN CHK JKS NBL TIBX.

GOOG reversed today but still closed above its 630.95 cup base buy point it broke out from yesterday. NYX is developing a potential handle in a cup base with a buy point of 33.10. Handles need 5 days to form.

Stocks near their 50 day MA are ALV 78.25, BWA 67, F 17, LLTC 34, MCHP 23.25, MIPS 15, SCHN 61.50, DHR 45.75, ATU 26, MDR 19.40, SU 36.30, JNPR 36, RVBD 35, AGCO 49, SQM 54, ARUN 23, BIDU 105, AKAM 50, BBBY 47, COST 70, BID 44, DD 48.50, SOA 23, NDAQ 23, CHRW 77, EXPD 54, FDX 92, KSU 48.50, UPS 71.25.

Stocks near their 200 day MA are PBR 36, SWN 37, AEM 67, ABX 46, PVH 58, LMT 75.50, ANN 21, GES 40, LTD 27.50, WSM 30.25, BBT 26.70, BAC 14, ZION 22.50. LO another example of when a 200 day MA is violated to the downside it usually is not pretty.

Stocks showing weakness today include PTEN RL JWN RCII PX WYN BUD BBD which all were stopped at their 50 day MA. RHI FLR both had negative outside reversal days. TIF ABV going further below their 50 day. RDC can be shorted under 33 and FTI under 85.50, both their 50 day MAs.

Portfolio changes today were selling all longs. DE we bought at 79.78 on 12/8 as it broke out of a flat base. Sols told just above 90 for a $10 gain. KKR we bought at 13.85 on 12/21 as it broke out from a flat base. Sold today at 15.50. QCOM we bought at 50.41 as it broke out of a 4 week tight pattern on 1/4. Sold today at 52.50 for a $2 gain. JCI we bought at 40.25 on 1/5 as it broke out of a flat base and sold today for no gain or loss. NETL we bought at 34.45 on 1/6 as it broke out of a double bottom with handle pattern and sold today at 36. TRW we bought at 54.93 on 1/4 as it broke out of a 4 week tight pattern and sold today at 61 for a $6 gain. NSC we bought at 63.77 on 1/7 as it broke out of a flat base and sold today for a $1 gain. UNP we bought at 95.88 on 1/10 as it broke out from a flat base and sold today near 98. RAX we bought at 32.79 on 1/11 as it broke out of a flat base and sold today at 34. AMTD we bought at 20.68 as it broke out from a cup base on 1/13 and sold for no gain or loss today. FCX we bought at 118 and sold today for a $2 loss. SDS we sold for a small loss. All of my shorts were initiated because of breaks below the 50 day MA. EBAY we shorted at 29 on 12/21 and covered for no gain or loss. FOSL we shorted at 69.05 on 1/12 and covered today for a slight loss. PAAS we shorted at 38 on 1/12 and covered today at 36 for a $2 gain. ANF we shorted at 52 on 1/15 and covered today at 51 for a $1 gain.

Good luck.

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