Another leg higher?

Today’s decline and rally happened on relatively big volume, signaling a continued move to the upside. The candlestick formation that was formed, called a hammer indicates that first the bears were able to push prices lower, but later in the day the bulls overpowered and brought prices back up near the open, this is a bullish sign.

We’ve also had plenty of stocks making new 52-wk highs over the past week and only a few making 52-wk lows. We know we are wrong if prices break below the tail of today's hammer hence a stop should be placed just below there on any long trades tomorrow.

Earnings, Earnings, Earnings

Keep an eye out for earnings announcements in the stocks you are trading for the next few weeks. Click here for more info on earnings announcements.

Wk38: Market Recap

We remain bullish on the weekly chart of the top line figures. The head and shoulders pattern formed between November of 08 and July of 09 had roughly a 250 point range on the S&P therefore the target is $1200 on the S&P to be completed within approximately 8 months after July 09. We have seen lower volume on this rally a sign that buyers are still hesitant.

Wk39: Market Forecast

In the week ahead look for these news announcements to act as potential market movers…
· Tues: S&P Case-Shiller HPI 9:30 AM ET
· Tues: Consumer Confidence 10:00 AM ET
· Weds: ADP Employment Report 8:15 AM ET
· Weds: GDP 8:30 AM ET
· Weds: EIA Petroleum Status Report 10:30 AM ET
· Thurs: Performance Income and Outlays 8:30 AM ET
· Thurs: Jobless Claims 8:30 AM ET
· Thurs: ISM Manufacturing Index 10:00 AM ET
· Thurs: Pending Home Sales Index 10:00 AM ET
· Thurs: EIA Natural Gas Report 10:30 AM ET
· Fri: Employment Situation 8:30 AM ET

Another week packed with economic data including GDP Wednesday, ISM Manufacturing Thursday and Employment Situation Friday.

Even though we’ve pulled back on the daily chart, we cannot be sure if it is the end of the bull run. We remain in a downtrend on the monthly chart; however watch for a moving down into the S&P support level of 1020-1040.

Wk39: Stocks to Watch

This week we are going to look for stocks that are in up trends, close or at their 52-week and all time highs, as well as trading above their 20 period exponential moving average. We use an exponential versus simple moving average because it places more weight on the most current trading day. We also want to make sure the 20-EMA is in an uptrend and above the 50 period moving average. Wait for a close above the high of the low day for entry on longs.

A Healthy Pullback?

On a line chart, the pullback we've seen appears to be quite healthy. We remain in the trend of higher highs and higher lows, with the Ascending Triangle pattern prevailing. Notice how every time we touch the trend line we move higher off of it.

When a market moves sideways or pulls back slightly look to volume to determine if it is a temporary breather, or a change of trend. If volume decreases after a move higher is it expected that prices will continue in the direction of the trend. If volume remains high during a period of sideways action it is an indication that sellers are becoming stronger and could signal a turn in trend.

Wk38: Market Forecast

A short bit this week, FOMC Meeting Announcement Weds at 2:15PM EST all news announcements can be found here. Since Friday put in an inside day, watch for a break of S&P500 1075 or 1060 to confirm additional bullishness or a pullback.

We may be in an uptrend on a short-term daily chart, but we remain in the context of a downtrend on the weekly chart of the top line figures. We are at an inflection point in the market, watch how it reacts to news and speeches. Trade with caution this week.

Watch for further updates throughout the week.

Traders Expo: Las Vegas!

Visit Las Vegas this November 18-21, 2009 where Tim Racette will be a guest speaker, teaching traders how to create a solid trading strategy. Click here for more info.

Wk36: Market Recap

The market refuses to go lower in week 36. With repeated attempts by the bears to push the market lower off the open, the lower prices were quickly rejected by the market. Friday was quite lackluster, perhaps due to the fact that it was 9-11. Friday’s breadth, highlighted in orange represents a market at parity.
Gauging off the weekly chart, we should see a continued rally in the markets as we are breaking above the hammer formed in week 35. However, the S&P500 is approaching the top of its channel, and with slowing action late in the week a pullback could be in store in the coming weeks back to the prior breakout point of $1030 or the psychological $1000 level. Notice the divergence between price and volume on the weekly chart as well.

Wk37: Market Forecast

In the week ahead look for these news announcements to act as potential market movers…
· Tues: Producer Price Index 8:30 AM ET
· Tues: Retail Sales 8:30 AM ET
· Weds: Consumer Price Index 8:30 AM ET
· Weds: Treasury International Capital 9:00 AM ET

· Weds: Industrial Production 9:15 AM ET
· Weds: EIA Petroleum Status Report 10:30 AM ET
· Weds: Housing Market Index 1:00 PM ET
· Thurs: Housing Starts 8:30 AM ET
· Thurs: Jobless Claims 8:30 AM ET
· Thurs: EIA Natural Gas Report 10:30 AM ET
· Fri: Quadruple Witching

Lots of economic news this upcoming week that should move the market including a Quadruple Witching on Friday, meaning stock index futures, stock index options, stock options and single stock futures all expire.

Looking at a chart of the SPY with a Fibonacci drawn, the 127.1% and 161.8% extensions act as price targets when a stock or index breaks out. The spinning top candle pattern on Friday could be a sign of stocks beginning to roll over here, but any sideways movement would be considered bullish.
The VIX is also something to note. Currently at lows on the year, the lower 20 range that it has been sitting in is half of what it was a mere 6 months ago.

Wk37: Stocks to Watch

As we flip through our scans and watchlists we notice many more stocks breaking to 52-week highs than 52-week lows. As a matter of fact, there are hardly any stocks making 52-week lows across the board. Keep looking out for stocks that are relatively strong and weak to the market as a stock’s value is influenced by the rising and sinking tide of the market.

Long: ASML, AWH, BP, BR, BRCM, CYMI, LPL, NTGR, OSK, SBUX, ULTA (w/ caution)

Short: CPA, CTXS

AMZN is on our short radar, keeping in mind that holiday season is soon approaching, this stock is in a short term down trend over the past few months and not acting as strong as it typically has.

For those who took some longs in the double leveraged ETF’s we talked about last week, look to take profits on all or a portion of the trades, tightening stops on the remained at least to at-or-above break even.

Wk36: Watchlist Update

If we take out $1040 on the S&P500 look for these stocks to breakout... BWLD, CNQR, CREE, MNKD, NETL

If we pull back, here are some weak stocks in down channels or down trends... AAN, AKA, MGVA, PCL

Aug09 Recap

This month it was the S&P500 and Dow that outperformed the NASDAQ and Russell. Could this be tribute to the S&P and Dow playing catch-up, or are the NASDAQ and Russell indicating that a rollover to the downside may be in store? This is the 5th consecutive week of new highs of the top line figures on the monthly chart.

Wk35: Market Recap

I don't like to toot my own horn, but in this case I will pat myself on the back...

http://tjmactrading.blogspot.com/2009/08/top-is-here.html

http://tjmactrading.blogspot.com/2009/09/watch-for-bounce.html

Wk36: Market Forecast

In the week ahead look for these news announcements to act as potential market movers…
· Thurs: International Trade 8:30 AM ET
· Thurs: Jobless Claims 8:30 AM ET
· Thurs: EIA Natural Gas Report 10:30 AM ET
· Thurs: EIA Petroleum Status Report 11:00 AM ET
· Fri: Consumer Sentiment 9:55 AM ET
· Fri: Treasury Budget 2:00 PM ET

This week should set the tempo for the rest of 2009.

Wk36: Stocks to Watch

AAPL, OSK, GOOG, and Double Levereged Index ETFs like the SSO.

Watch for a Bounce!

Watch for a bounce at the S&P 980 Level. Not only is this a strong support level, it is right at the uptrend line of the March and July lows. The rest of the week should continue to drift lower on lighter volume going into the 3-day holiday weekend.

How the market reacts to the Jobless Claims number Thursday and Employment Situation Friday will be quite important. For those continuing to be bearish, don't worry, we are halfway through the formation of a head and shoulder's pattern on the top line figures.