VAR

VAR is struggling to stay above its 50 sma. I'd look to short up at near 54 to at around the 50 sma for a range trade. However, after the trade, I'd continue to watch this one as a break and close below the 50 sma could mean some downside is on the way. Stop out above 54.50.

Looking for a Top/Range in USO

USO might be forming a top here. Look at the chart. A divergence in RSI and price action shows that USO's uptrend is weakening and could be falling apart. A higher high in price, a lower high in RSI. Support holds, but RSI shows a lower low.

In addition to this pattern, USO's price action hints that this may be a top. Currently, the etf looks to be heading back up to 77ish (resistance). If that rally fails at that level or before, you'll have a nice topping pattern. Price will then likely fall back down to support at 68.25ish. At that point, look for a break in that level for confirmation of a top.

An alternate scenario is that USO could simply be in a range and will continue trading back and forth from support to resistance. If this is the case, then go long at support and short at resistance with stops placed conservatively.

I'll keep watching this patterns and will update in the days/weeks ahead.

BIIB Can't Move Higher; Sell

BIIB is currently trading at 58.62. It could still move a bit higher from here but it looks like the 200 sma is keeping it from moving significantly higher. I would look to sell right around this level or 59. Be aware of a break above the 200 sma as it could lead to a rally up to the 50.

Take Another Quarter Off

I'd take another quarter off here right around 59ish. It's a volatile market and you don't want to give away any of these gains.

Support Holds on BIIB

Support held and we're rolling higher (currently 57.94). I'd take off a fourth of a position here but still hold the rest until further notice. 3 bucks in a day is nothing to complain about!

Looking at BIIB

BIIB has held up pretty well throughout this mess. Look at the chart. Besides the fact that it was slaughtered when no one showed up to buy it, it looks pretty steady. There is support at 55 dollars which it is now coming down to. I think it is buyable at that level with relatively little risk. Stop out a percent or so below 55.

Broad Markets In Trouble

S&P Futures are pointing to a large gap to the downside in response to a vicious selloff in world equities. As I've shown in previous charts, the S&P and other broad US indices are topping out. Now that we've broken the neckline on the S&P's head and shoulders pattern, the S&P will likely trade down to 1250. How did I get that target? Take the distance from the neckline to the top of the head and reflect it downward. Once we reach that level, I might be interested in taking a look at buying. Before then, I'm highly skeptical.

You can't deny that we now have capitulation in stocks. Why? We are down 10% in one month! Also, look at almost any chart. Everything is weak, topping out or falling apart. Furthermore, there are no more safe havens. Everything, including the most defensive companies are getting sold. First money flowed to tech, then to healthcare, then to biotech. But all of those are now failing to attract "safe haven" money.

This pace of selling is not sustainable. Soon, sellers will have overdone everything and priced in a permanent recession. This is already beginning to happen as the good is starting to go out with the bad. We'll just have to wait for a reliable technical signal to occur before looking at anything on the long side. Meanwhile, watch the Fed panic and try and salvage things; KEY WORD = TRY.

Cover Rest of STX

STX was down over 6 % in regular trading today and is down another few percent in after hours. Go ahead and cover another the rest of your position at 20.20. It's time to book this gain.

TMO's Not Working; Stop Out, Consider Shorting

TMO's broken down. Stocks just aren't holding their moving averages well at all in this environment. You should already be stopped out by now if you set your stop loss 1 or 2 percent below the 200 sma as recommended.

JSDA Trade Works, Cover Now

JSDA made it right to the short point (7.23/7.24) and fell right back down as predicted. At this point, I would go ahead and cover right at 7.07 or lower. You can repeat the trade again once it gets back up around 7.23/7.24

Cover MA at 172.35

Today marks the 11th day in a row that MA has been down. Now that we are down 15 on the S&P in addition to yesterdays bloodbath, I think you should be covering the MA short position now at 172.35. It still could have more downside from here, possibly ending its downward spiral at its 200 sma, but this type intense pressure is likely to let up sometime leading to a pop in the stock.

50 sma Dictates JSDA's movement

JSDA is caught underneathe its 50 sma and cannot seem to move higher. I think the play here is to short at and stop out a little above the moving average. There's little risk (give it like 2 or 3 cents) by shorting at 7.23 and a good chance that this trade could be pretty profitable. Look to cover around 7 bucks.

Cover HW Close to 10.63

This looks like a good place to cover the HW short position.

Take Gains in UNG

Nat Gas has come off its double bottom very strongly. However, at this level after bagging 6 points, I would look to sell right here at 40.40ish and look for a pullback before buying again.

Start Selling IMA

I recommended IMA down around 53-54 and it has now run up into the low 60s. I think the time has come to start selling at least half of the position right here at 60.60 or better.

TMO Bounces Off 200 sma

TMO came down to its 200 sma today and bounced off. That was the buy point, I hope you got in. Stop out a percent or two below the 200 sma.

Cover NMX at 119.27

NMX has come down swiftly along with the rest of the market. It has traditionally found support at or near this level leading me to recommend covering your short here at 119.27.

Cover ALU at 6.67

ALU could have further to go, but after 8 down days in the S&P, it is likely a bounce will arrive sooner than later. Plus, ALU has come down a long ways since I recommmended shorting it. Cover here at 6.67 and take the gain.

IMA is Headed Higher

IMA has broken above its 50 sma and looks like it is headed higher from here. Healthcare and medical device stocks continue to be the annointed stocks in this environment. Move your stop up to the 57 level in order to protect gains.

STX Headed to 21 if not Lower

I've said many times on this blog to get short STX. As the chart shows, it is either consolidating or topping out. Who cares? Either way it's still headed to 21 dollars. It is now trading at 23.15, down from a high of over 28. However, since it has made such a big move in a short period, I would take a third of a position off here (down 5.5% on the day), and look to add back on if the stock bounces up any.

Update on the S&P 500 and Nazz

S&P 500 support at 1410ish then 1370 means theres more to go folks. If those levels break, you're looking at 1290 in the not so distant future.

The S&P looks to be in the late stages of forming a head and shoulders pattern. It's a very well defined shape, as you can see above, but a break in the neckline is still needed to confirm this pattern. Also, look at the volume on the S&P. You can see that the declines come with much, much, much heavier volume than the upshots. Buyers are tepid, which could definately be a sign that this is in fact a head and shoulders pattern.

Another negative includes the fact that the 50 sma has now broken through the 200 sma. I've circled this on the chart above.


Also, look at the chart right above of the Nasdaq. Although the S&P and DJIA are exhibiting very similar action, the Nasdaq most clearly illustrates this clear break of support.

It's evident that all the averages broke near term support and should be headed downward from here until the next level of support at 1370ish. I would remain bearish until, that level is hit, bounced off of, or broken.

MA Might Be Headed to its 200 sma

MA is currently exhibiting a pattern that looks very similar to the path it took from May '07 to Sept '07. As you can see in the chart above, MA gapped higher in May '07 and consolidated in an upward tilted pattern. Well the stock gapped higher once again in Nov '07 and is now exhibiting a very similar pattern to the May-Sept period I just mentioned.

Now, when the stock broke its 50 sma in August, it took a very large tumble (30 dollars). That's exactly what I'm looking for now, early in the new year. The stock is currently trading near its 50 sma. I would look for a solid break below its 50 sma, preferrably on a gap lower, and a close below the 200 sma before beginning to short the stock. You'll then have a stop out point above the 50 sma and profit potential of all the way down to the 200 sma (around 25 bucks).

If you haven't noticed already.....

This markets taking a dip here.......ummm... more like a nosedive straight into concrete. All stocks are coming down strongly. The only thing that's at least somewhat immune is oil, gold, nat gas, and a few select medical device (IMA) type stocks. Otherwise than that, you're feeling the pain on the long side.

Just some thoughts...


NMX is coming down to support again. Feel free to short that sucker down to the low 120s. It's currently at 125.84.

Nothing is holding 200 smas or 50s. So I wouldn't trust those type support levels at this point. Chances are they'll break.


Watch ALU continue its plunge.

DLM's a Short

DLM broke significant support at 9.50/10 dollars in late 2007. If you look at a five year chart its clearly shown. Unfortunately, I do not have one available for this post. After a quick drop it has now snapbacked towards that previous support level. It now looks to have tired itself out and the stock has become an attractive short. Just above here, DLM faces not only the support level it broke (which is now resitance) but also tough resistance at the 50 sma (9.57). The stock topped out today at 9.50, right near this level. I would start shorting here, even though the stock has backed a bit away from that level. Stop out above the 50 sma.

SYNA Snaps Back

SYNA snapped back off support this morning making over a 7 percent gain. If you haven't already, take the position off right here at 44 bucks.