Monday Thoughts

Markets sprinted higher Monday, on merger news with DHR buying BEC and ESV buying PDE. Volume unfortunately was lower than Friday. Mondays as we know tend to be very strong days, and today proved no different. However, they did fall from their best levels. Small caps outperformed with the S&P 600 leading the way with a 1% gain. Some strong groups reversed on the day with the SOX hitting 3 year highs only to close lower on the day. Overall leading stocks, a good barometer of market health, performed admirably today. AAPL hit an all time high for example. Expect earnings tomorrow from ACM AGCO MT TEVA VSH before the open and ANDE OPEB DIS after the close.

Stocks near specific buy points are. Cup with handles are ITW 56.46, JNS 13.78, FLR 72.91, LEN 20.80, BK 32.60. Flat bases are SOA 25.10, AGU 95.90, APC 80.70, JBL 21.88. Double bottoms are WSM 36.75, PM 60.24. Cup with high handles are MTL 34.84, TC 16.16. Cup base is GD 79.10 and TROW 3 weeks tight at 69.08. BHP RIO both continued higher after breaking out of flat bases last week, while FCX reversed. The action caused me to tighten up my 55 stop (sold today) with that bifurcating action concerning the 3 miners.

Stocks near their 50 day MAs are GNTX 30, MGA 55, CAVM 40, MXIM 25, BP 45.50, CNQ 43, OXY 96, BTU 62, CLR 60, TCK 60, WLT 123, BBBY here, DRI 47.50, TIF 61.75, YUM here, CE 41, HUN 16.50, LYB 34, PX 93.95, RCL here, AMP 58, FISV 60, FOE 15, ORCL 31.25, CNI 67.20, JBHT 40.75, KSU 49.25, UNP 94, ALB 56.25. Stocks that can be bought as they reclaim their 50 day MAs are PVH thru 64, ORLY thru 59, BUD thru 57.25, TAP thru 49.15, CIS thru 24. Stocks that reclaimed their 50 day MAs Monday were TKR MT COH NKE LOGI WYN GS. Stocks that reclaimed their 50 day MA on Friday and continued higher today include DECK RL RVBD CMI.

Stocks near their 200 day MA are JRCC 19, PBR 35.50, PUDA 10, PCAR 48, ABX 46.50, AKAM 46.25, DLTR 48, MCD here, RAI 29.60, ABV 24.50, INFY 65, NSC 59, TEVA 53. TGT is now back above its 200 day. NEM can be shorted if its 200 day proves to know be resistance which I believe will happen at 59.

Couple of notes of interest. Rare to see an acquirer finish higher on the day of the takeover announcement. DHR did. It bears taking notice. FCX finishing lower on the day when gold and copper finished higher. Did not like that action. BRIC nations besides Russia looking pretty bad. Brazil (EWZ), India (PIN), China (FXI) all have very weak looking ETF charts. Russia (RSX), looking strong. My take. Russia is lowering taxes across the board. Is their corruption going on there? Sure. But as a trader I see everything reflected in the charts. Buy strength. Leave the EWZ, FXI, PIN for the value managers to worry about. Are we seeing a rotation out of commodities and back into retail and tech? Leave your opinions at the door and let the charts tell you the answer. Trade accordingly.

Stocks looking weak today were NFX, which had an outside reversal day today. Stocks that can be shorted at their 50 day if they prove to be resistance are TEN 42, WAT 78, ANN 25, MAR 41. CNX can be shorted under 47.75, its 50 day MA. Stocks which found resistance at their 50 day MAs today include SQM AAP SBUX SCCO CRM.

Good luck.

The author owns BUD LULU.