Monday Thoughts

Markets resumed their rally ways with "Merger Monday" today. ORCL CI were some of the latest acquirers who just felt that equities were mispriced and undervalued, and proceeded to take advantage of the dislocations. The Nazz led the way today with a 2.3% gain, recapturing its 200 day MA in the process. The S&P 500 rose 1.3%, and volume on both exchanges was lower compared to Fridays elevated levels due to options expiration. Breadth was strong today and we continue to see more breakouts each day. The true barometer to the health of any market is how its leaders and breakouts are progressing. Today saw M break out from a 30.72 cup bas, and GNC take out its 24.90 double bottom buy point, which it attempted to do Friday. Todays laggards were stocks which hailed from defensive groups such as utilities and tobacco. Good signs indeed. Also safer names like WMT KO were both down today as the risk appetite returns. JJC rose 6.66%, today enabling 8% gains from FCX. More good things to see today included CATs stellar earnings report, and even TXN which was trading slightly up in the after market, even as it lowered guidance. Good action to bad news always must be considered bullish behavior. The SDS and UUP continue to move farther away from the 200 day lines they breached not to long ago. Tomorrow we get earnings from AMZN CHRW CE CBI COH FFIV NOV BTU QCOR RRC R TROW UA UPS X GRA.

Stocks at exact buy points include cup with handles UA 80.90, ACN 58.93. Cup bases are DSW 46.00, CHKP 61.56 KSU 62.86. Double bottoms are ANN 28.61, TIF 77.94, AXP 50.63, ORCL 34.23, AET 41.95.

Stocks that can be bought as they reclaim 50 day resistance and their buy stop spots are AA 11.15, IBN 36.60, CHK 29.25, BTU 42.15, SLB 70.30, TCK 37.40, X 26. Stocks that retook their 50 day MAs today were NEM BHP RIO FCX BID AGU DE DFS GS CE EMN PCLN FWLT. Stocks near 50 day support are FE 44, CERN 66. CBOE ALB BHI COG all found 10 week support Monday. Stocks that can be shorted as they lose their 10 week MAs and their sell stop spots are LULU 53, CVI 25, HFC 31.60. JAZZ can be shorted at 41.25, its 10 week MA.

Stocks that can be bought as they retake their 40 week MAs and their buy stop spots are BUD 56.80, FISV 59.90, R 49.60, CRM 135.50, MCO 34.20, AET 39.40, XRAY 36.20, WLP 69.75, QCOM 54.25, ARMH 28, ADI 37.25, LLTC 32.25, PPG 85.15, COP 72.60, CLR 62.15, EXXI 30.50, XOM 80.65, AVT 32, DHR 49.60, JOYG 88.40, PLL 52.50, HSIC 68.15, URI 25.40. Stocks that retook their 40 week MAs Monday were JNY FOSL LMT RAX DFS TWC GRA SWN UPS BWA BEAV KMT CBI. Stocks that can be bought at 200 day support are JNY 12, GRA 40.25, NBL 88.25, RDSA 69.40, SWN 40.15, UNP 96, BEAV 36.20, CBI 36. ANN EBAY NDAQ SAP DTV MXIM IFF all found 200 day support today. Stocks that can be shorted at 200 day resistance are GMCR 76, BIDU 133.50, BSFT 36.25. Stocks that met 40 week resistance Monday were ARMH PPG COP XOM TYC JBHT URI. FOSL can be shorted under 95, its 200 day MA.

Good luck.

The author owns FCX DE. We sold WNR for a 5% profit early in the day, and we sold KLAC today as well. We locked in a 5% gain on that as well. Did not like the lack of volume accompanying the breakout from its 44.69 double bottom with handle breakout.