Sunday, September 25, 2011

Weekend Warrior

Markets displayed meager gains Friday, capping off a miserable week. For the week the Nazz "outperformed" the S&P 500, losing only 5.3%, compared to the S&P 500s 6.5%. The Nazz is 14% below its 52 week high and 6.4% for the year. It is comfortably above its August lows of 2331, that technicians believe is a critical level. The S&P 500 is 17% off its 52 week high and down 9.6% on the year. It is getting uncomfortably close to its August low of 1101. No group was immune from the massive drop this week. Gold joined the carnage with the precious metals ETF GLD lower by more than 9% on the week. Its worst weekly drop since 2008. Many of the remaining leaders hailed from the gold/silver mining complex. They were pummeled this week. Weekly losses in the sector were astounding. ABX 13%, RGLD GG both 11%. SLW lost 19% this week forming a very bearish outside week in the process. Reiterating that the true leaders within leading sectors always outperform. That was evidenced by NEM, which lost just 4%, and found 50 day support as well. Energy stocks which absorbed heavy weekly losses as well were HAL down 21%, EOG CHK NOV all down 18%. DVN APA gave up 16%. More importantly, the two leading stocks in group suffered bruising weeks. SM and COG both had outside weeks, a very ominous future sign. SM gave back 21% this week, COG 13%. SM lost 200 day support during the week, COG its 50 day. Agriculture stocks, a recent leading group had some stocks blasted this week with AGU MOS POT all losing between 18-19% this week. BIDU lost 16% this week losing its 200 day MA and also having an outside week. The market seems to not have that panic feeling to it which can lead to big capitulation days. However some stocks seem to have undergone their own personal capitulation days of their own. MCP down 33% this week, FCX 22%, BTU 20%. These are massive moves. Panic, or margin clerk liquidation? Who knows but the horrific price action does not inspire confidence going forward. Retail stocks were one bright group Friday, perhaps on the back on NKEs earnings report. VFC CROX DECK NKE all leapt higher by more than 5% Friday. And although the wise and prudent thing to do is to reduce position size in this volatile environment, a watch list with possible buys must always be handy. Some equities building valid bases are cup with handles UA 80.90, EBAY 34.00. NDAQ 25.88 in a double bottom with handle formation and BBBY 61.01 in a cup with high handle base.

Stocks that can be bought as they reclaim their 50 day MAs and their buy stop spots are TIF 72.25, PCLN 519, USB 23.80, TIBX 23.30, CLH 53, WCN 33, JBL 17.10, ARMH 27.25. Stocks that retook their 50 day MAs Friday were CROX NKE PCP TDC ORCL UNH MCHP. Stocks near 50 day support are HANS 82.50, HSY 57.07 (UNCH for the week, very good relative strength), IACI 38.75, DPZ 26.50, FAST 33, TJX 54.25, MXIM 23, MAKO 32.25. Stocks that found 50 day support Friday were BBBY CMG SBUX RAI HUM CHD. Stocks that can be shorted as they lose their 50 day MAs and their sell stop spots are CMG 312, GMCR 99, UAN 23.50. Stocks that lost their 50 day MAs Friday were RGLD ADS RRC. Stocks that can be shorted at 50 day resistance are COH 57.50, LULU 56.25, ANN 24.05, M 26.60, SCSS 15.45, EL 98, HLF 56, QCOM 52, CHKP 55, TXN 27.70. Stocks that met 50 day resistance Friday were LULU MCD JWN TIF PCLN WCN ARMH BRCM KLAC LLTC.

Stocks near 200 day support are KO 66.15, ABV 30.30, TPX 54.75, CVI 21.20, RRC 54, WYNN 134. Stocks that found 200 day support Friday were DSW EBAY PETM TIF EXPE TDC AMT CHKP GTLS INTC. AET retook its 200 day MA Friday. Stocks that can be shorted at 200 day resistance are K 54, BIDU 130, ANF 64, AN 33.75, CVS 35.50, PM 65, AXP 47.15, EP 17.90, HFC 29.40. Stocks that met 200 day resistance Friday were COH ANF AN M. Stocks that can be shorted as they lose their 200 day MAs and their sell stop spots are EXPE 25.75, LVS 43.70, IRM 30. CRS lost its 200 day MA Friday.

Good luck.

The author owns CBOE.

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