Strong Performers Hitting Resistance

GLD is trading near the 50 dMA and the lower trendline.  I see no fundamental, technical or sentiment reason to sell at this point.  I continue ot hold the metal but have recently sold half my position in the mining index.

MS moves fast and has been a good trading vehicle, although not as volatile as WFC.  Today I added some near the day's low and expect this to make a run for 30

FCX continues its upward trajectory off a solid base with the next 

resistance level at 45.7.  Materials in general are working off the best developed basing pattern.

IYM has a beautiful base and may be developing an inverted head and shoulders now as it approaches some resistance.  This may take a couple weeks to break out, but with the violent moves, who knows?

SMH is likewise struggling with some overhead supply after a 20% run.  This is due for a pull-back.  I recently took some profits in CY, but will re-enter on any correction.  MRVL also could be a buy with any pull-back.

Wrap up and Review

As discussed in previous post...

Sprint (S): Re-purchased Sprint (S) at close for $3.59 and MACD shows bullish divergence on 5 and 20 minute charts.

BMC opened long near end of day for $28.97 with strong MACD and near low of day.

AXP opened a short near the day's high and rode it for 40 cents and nice profit.  

IBM and RIG both sold near high of day for profit.  may re-enter at some point.

TJX still watching for an entry.

FCX and SLV and GLD are holds.

MS is now oversold, but I did not buy it yet.

FXA and FXC: Australian and Canadian dollar ETF's were opened long to diversify my fairly large cash holdings with US dollar in the overbought area.  Yes, cash is a holding.

Wall of Worry Charts

Now we climb that wall of worry.  The SPX is still below the declining 50 dMA and nobody expects it to make a move past 815 before pulling back.  Was this just short-covering, or will it develop into a real rally?  Shorts are nervous about getting squeezed, longs are nervous about that 815 resistance, cash holders are nervous about missing something.  Game on.

BMC long if it can break through the overhead resistance.  It may have to pull back a bit here, but this charts looks okay if it can break above 30.22

AXP short set up is developing with high volume doji Friday showing the short-covering may be finished.  Look for confirmation Monday with a red hotdog on decent volume, then short the bejesus out of this one.  High end credit cards?  Yeah, right.  These guys are paying customers to pay off their balances... what kind of a business model is that?

TJX is coming off a healthy basing pattern although the breakout is on lousy volume and RSI is now overbought.  Retail should have a little more life in it, but Iwill wait for a pull back to horizontal support before entering a long and keep the sell stop near the trend line.  If this gets above 26.36 it could run.

Sprint (S) long has been strong.  I took 22% gains on Friday with the lower volume, but this baby was strong into the close so it should be interesting to see how it opens Monday.  On any low volume pull back, I'll add to my position.  Above 4.5 the next resistance is 6.5.  Sell-stop is the trend line.

MS long may be one of few survivors in the sector along with GS.  I would be careful entering here, but long term this should do okay.  

Citigroup (C) is still standing despite doing just about everything wrong.  In fact, C had a 78% gain this weak on pretty decent volume.  Sure some was short-covering, but probably some new buyers, too.  Ben Bernanke on 60 minutes said they will not allow any big banks to fail and the leading indicator out of the crisi will be when the big boys start getting private equity.  I'm not buying this smoldering heap of burning tax bailout money, but the chart is interesting.  This could run if it breaks above 2.88, but I'm not holding my breath... I'll just put it on my radar.

In other items, Friday I added to FCX and opened a long position in IBM at 89.50 as discussed last Thursday.  I will add to MS and S on any pullback Monday.  

"Six percent rallies don't happen in bull markets."

...and that is directly quoted from Macroman.  Well, we'll just have to see about that.

Or, for Rambo fans: "Nothing is over."

Needless to say, I took some profits.  First, let's go to the charts:

IBM looks good for a long here.  Very good price movement and has formed a classic double bottom.  Conservative traders should look for a breakout above 89.50 to get serious.

SLV long. You either love precious metals or hate 'em.  I just decided to keep 5-10% of my trading portfolio in this sector and split it equally between GLD and SLV.  No emotion, no fallout bunker, no ammo, no SPAM.  When they get above the regression line, I sell some; when they get below, I buy some.  It works for me.

Sprint (S) is a nice pattern for a long position.  This is snugging up to overhead resistance should break through one of these times.  Could double.  Use the lower trend line for a sell-stop.

MRVL has been reviewed before as a long candidate.  Like a wimp, I got stopped out in the past-- which is further evidence of Teresa lo's advice not to set stops too tight.  Any pullback in this could be a buying opportunity, but this could just run away from here.  CY also is a strong chart.

While I remain skeptical by nature and I have no trust in the bull thesis here, I could not find any classis short set-ups.  AXP, COF, FRX and CEG all look like decent shorts, but not outstanding.  I sold half my FCX in the pop, but will add it back with any pullbacks... I still think it's going to $40 or beyond.  MS, likewise, was sold for a gain. 

Tuesday Recap and a look ahead

The bloodbath was impressive and gave me pause on entering any long positions at all.   But since I presented a few stocks I went ahead and got some CY at $5.09 and even went commando and went long FCX at 27.64 which was not a good price and one I may regret.  MS dropped so preciptously that it broke the support that I had mentioned, so I never opened that position.

The short side is working much better.  AVB continues it's descent into hell, and I did not short the other REIT, VTR, due to the gap down open.  I chased BBBY a little and sold it short at 21.34 for the next leg down.

Of course, GLD and SLV are the place to be and those are still being held.

The stink of blood still lingers and Asian markets are down as I write this.  No end is in sight for this free fall, but the futures point up at the moment and we should stay vigilant since we all know how violent bear market rallies can be.  Eric is predicting no bounce until Thursday at the earliest and more likely Monday.

Longs for Tuesday 2-17

Let's just say, for argument's sake, that the four horsemen take a detour and the world somehow pulls out of this descent into chaos.  Which stocks will do well?  These are all lottery tickets... looking for four baggers in the next few months, or they could all go bankrupt.

FCX mines for a lot of stuff: copper, platinum and gold.  The chart looks great.  Loose stops are okay on this one.  It could double with any rebound in the markets.  NG is also an adrenaline junkie's dream.

CY is in the semiconductor space but also is involved with design and manufacture of solar panels.   Could double, or could go to zero.  Careful.  Still holding MRVL and still like LLTC.

MS along with GS may be the last soldiers standing... and post-Mad Max investors will have to go somewhere once Citi's "mall" gets shuttered.  MS was trading at $50 six months ago, and while it may not double we could see a 20% pop very soon.