FIG, NFLX

NFLX looks like its setting up to move higher. FIG is a sell at the 50 sma.

Persistent Buying in Oil

Oil is rallying after an inventory report this morning. It was definately not like the typical pops you've seen lately in oil--the ones that pop and immediately reverse and head lower. This was much more persistent and has really changed the trend in oil for at least the short term. After consolidating for a bit oil slowly started turning upward leading to a solid buy point around 99.13. It has since raced much higher (now 101.16).

The XLF has really faded on the day. After double topping early on, it came down and filled its gap. It made a lower high at 21.16ish and has come up a bit higher now. The move has the potential to push it back to break even or more on the day.

Otherwise, FIG has continued to be a monster stock--you just can't hold it down no matter what the XLF does. It's still moving higher here up 4.5%. I'd be a buyer on a trading basis. NFLX has continued to be weak (good sell on the open as recommended). GOOG is weak as well. It was acting terrible a few hours ago and really struggling to stay positive when most others were clearly in the green.

Sell

I'm not liking how this market is acting right here. Financials pushed a bit but nothing's following. I'd start selling all the trades including BNI, ESLR, FIG and NFLX. It's better to take gains (especially after yesterday) than to let them run against you. The big gap up just increases the risk.

Market Set to Pop

It does not look like there will be a dip to negative territory today. The S&P is up strongly in the premarket after a strong ADP report. Some enthusiasm has probably carried over from yesterday's rally as well. ESLR is coming on especially hot right now in premarket. I think you can take some off as the stock moves up although I'm eventually looking for a pop to 10/10.50. I'd look to take BNI off into strength today as very solid gains have been made in that stock. I want to see how NFLX acts today before saying to sell out completely. The chart reminds me of how STJ looked before it really broke out, the stock has shown excellent relative strength over the past two days, and it moves very well in general.

Oil is up slightly but we'll probably see that fade a bit more today. It's been acting terribly lately as I've noted several times on here. A strong dollar, re-allocation of funds out of commodities and into stocks, and the deflation of the market's momentum have all helped bring down that market. It's going to be hard to get it started back up after this dislocation. So while the trend stays down and commodities continue to act this way, you won't see me getting long for more than a daytrade.

Consumer Confidence Boost Stocks

A stronger than consumer confidence number provided a significant boost to the market today. Financials led and the action looked pretty strong in all corners with the exception of oil and health care. Standouts in my book today were BNI which basically just went up in a 45 degree angle, FIG which was just getting bid up unrelentlessly, ESLR which had a solid trend and was a great trade on pullbacks to the trendline and NFLX which acted bullish yesterday as well. That stock just flew a la ZMH and STJ, two other stocks I've point out on here recently.

This rally could very well flip tomorrow but at this point I'm leaning to more upside. All else equal, I'd look for any shallow weakness we may have tomorrow to firm up leading prices even tomorrow. I'll re-evaluate on the open and post again.

FIG, BNI, NFLX

FIG, BNI, NFLX are all looking good and showing strength after the consumer confidence number turned things around. You should've already bought BNI on the mean reversion trade. FIG and NFLX are just busting out. Buy them on any dips as they are likely to trend higher.

Midday Update

The market has fallen off strongly with the financials leading the way. LO continues to hold strong but there is no upside to the trade right now. BNI has come back and looks decent based on a short term mean reversion trade and a relative strength basis. Otherwise, nothing seems to be able to push to new highs at the overall tone is negative. Oil's still weak, but I'm not touching it short or long yet.

Financials Fading

The XLF came up from around a percent down to slightly up before hitting a top around 21.10. They have since faded and put the market in a similar tone to Friday's. Everyone seems to be waiting as the market moves sideways and there is a lot of sectors moving in opposite directions. As far as single names--ESLR has held up pretty well after popping strong on the open, OSTK's looking weak and the selloff could pick up steam, MA's OK but it definately has a shot at fading later in the day, and LO did its standard drop and rally move.

Slow, Choppy Friday

The market was painfully slow today. I felt like it was just plain out flat lining after 12. There was a couple good entry points but mainly but everything felt pretty range bound in general as financials stayed weak causing the broad market to stagnate. LO worked out as it had some big sweeping rallies to past break even on the day before closing a bit lower. ESLR had a good entry point at 8.75 as it trended up on its 20 minute moving average. It eventually got up to 8.84 before stalling out and coming off hard. The XLF had a nice retest of 20.61 and bounced strongly off the level to get up to a close at 20.87.

I'm not sure you can read a ton into today's action. It never went anywhere. Highs were sold, lows were bought. That may have been caution before the weekend. It could be interpreted as broad market strength against financials that were down most of the day. It could be interpreted as a negative that the market didn't react more positively to the oil drop and strong durable goods number. I'm leaning to the latter but I'm going to wait until next week to see what happens before making any bets on it.

Oil and natural gas are still acting terrible. The trend is down until it proves otherwise.

BNI - 3 days down buy on the next day open could be a decent trade. It's now down 2 in a row.
CRM - At the 200 sma might be a good entry point
OSTK - Showed first signs of weakness after rallying hard off a capitulation low, keep an eye as a short
MA - It's holding up and reporting earnings this week. It could continue to show strength leading into earnings.
ESLR - It's still worth watching for good entries in anticipation of the big gap up.

Mixed Start

BNI was ripe to sell at the open. The stock has lagged behind its peer group and if earnings and a decent open in the broad market can't propel it higher, then I don't know what will. It has since come off strongly. GOOG is holding solid here and showing further relative strength. I'd buy it for a trade on the day. Two days relative strength makes me think twice about the two days of weakness it had after earnings. ZMH is stalling out as is OSIP and OSTK. Pharma (the PPH) was solid on the open and is holding steady but not moving too hard to the upside.

Financials are fluctuating back and forth from slightly up to about a percent down which is a negative in my opinion. That action seems to be holding the market back from really turning up the heat. If they turn strongly positive and can hold (which has not been the case as of yet) then I might say get long for a trade. There was a good entry in the financials around 21 to 21.40 after the XLF's downtrend broke. The market has since faded a bit.

I'm looking at ESLR. That stock gaps up on news and then not too long after gaps right back down. Well, now its a couple days after gapping down and it looks to be slowing its decline. I think it's a pretty good risk reward setup-10% or so upside and stop out not too below. I'd wait on good entries, it can be a good trading vehicle as well.

Lastly, LO is always a decent bet when it's down 2% on the day which it is now. The 2.5% down has been like a floor on most days and it always seems to come back to life later on. I'd watch it close and take a good look at entering into that on the long side.

End of the Day Slide

Stocks slid at the end of the day a move reminiscent of action before the recent rally. Financials got crushed and oil spiked as well. I was thinking mid-day that maybe this was going to be a shallow dip, but financials never really could get above resistance and they were completely sapped of strength. I'm still leaning towards a flat to down day tomorrow then we'll have to see if the drop gets bought. There's a lot of uncertainty out there and I don't think anyone's gonna rush all in tomorrow morning.

Disappointingly GOOG which was actually quite strong in the morning and presented a good long side trade for a percent or so just fell off a cliff in the last hour. It was ugly and I think it may be a good stock to track tomorrow as the weakness could persist. BNI was strong at the beginning too. It just wouldn't give up for a while there and it too presented a good trading opportunity for a percent or so. Finally though it gave up at the end. However, it did have pretty strong earnings after the bell. So, it should be up tomorrow. If it gaps up and you're holding it, I'd definitely look to sell some on the open.

A lot still boils down to what oil will do. I'm not sure there's too much of a catalyst out there that will get it going again. Iran seems mostly priced in, but demand destruction is getting in there too. Yesterday was a good day to be an aggressive short because the action was terrible. Today and likely in the near future-I think it'll be choppy and probably flat overall.

Mid-Day Update

The market is down with financials leading the way. I've been impressed by the strength of ZMH, OSIP, OSTK and DV today. DV, a stock I recommended very recently, just spiked big on the open (which was a selling opportunity) and has come off a bit. It's still holding up very well in the face of a down market. However, now that it is up 3 days in a row, I'd look to take gains and wait for a better opportunity to get in again. ZMH has just been bid up relentlessly after gapping down off of its earnings report. The action is so strong that you can't wait on a pullback almost; any downtick is a pullback! Similar action occurred when ZMH reported last. It got hit and rallied back sharply for 3 days after the initial drop before the move stalled out. Based on today's strong action, I could definitely see this move continuing. I'd buy here. If it does not maintain its strength, cut it. OSIP has been trending up pretty strongly today. I'd buy that one on intraday pullbacks as well. Longer term, it's in an uptrend, but may correct soon. OSTK's action is good and I like the daily chart for the most part. It took a big hit but is rallying back towards its 200 sma. I'd suspect that it would find that average before turning back down again.

FIG is showing some weakness. As I mentioned before FIG was the annointed stock over the past few days as financials rallied. Nothing could keep it down! The dips were shallow and all of them were bought up. But now that financials are dipping, all of those buyers have turned into sellers and it can't seem to rally at all. I'd bet that the action continues for more than just today. There has been a ton of buyers come in and a pullback like his will put a little scare into them, so much so that they probably won't dip into the market until at least 2 days down.

Oil (as judged by the USO) still feels weak to me. It's come down a lot, but it just doesn't seem to be responding as well as it was when it was higher. Overall, I think it's just better to keep trades intraday in commodities right now because they are so volatile and the gaps in the morning can take you apart.

Bad News Good Action; Financials Still Leading

Wachovia takes a big knock on the chin, so does American Express, Apple gives light guidance--but you know what? The market rallied in the face of all the bad news with financials leading the way. The big drop in oil and tough talk from Plosser which propelled the dollar higher helped as well. WaMu reported worse than expected earnings and is down after hours, but I would not bet against that sector or the market at this point. If you are, you are betting against the current trend which is a dangerous thing to do.

- DV bounced off the 200 sma. It's looking very solid at this point. Stop out below 200 sma, take gains on upward moves.

FIG Rallies and Broad Market Update

As I mentioned in the previous post, FIG was on fire Friday and it felt like it was still going to go higher. Sure enough, the stock moved up in a straight line all the way up to 11 before correcting back down and spiking at the end. Surely, a rally to 11 (and the second straight 7% + day) was enough to alert holders that gains needed to be taken.

We have Apple, American Express, and more down after hours on either disappointing earnings or guidance. This news should weight on stocks tomorrow especially the financials and tech (which I'm still bearish on-just tech don't want to touch financials for more than a trade). Google came down further today (now around 460), I'd look to take some profits into the negativity tomorrow--it's just down so much now and it's also getting ready to fill the gap. Pharma got hit today off of Merck and Shearing-Plough. The minute I saw that they had delayed reporting earnings and their stock was down pre-market, I thought things were going to get ugly. That was a sure sign to cut losses or take profits and run. Then they rallied later on! What a short opportunity! Now, Merck is up after hours while SGP continues to get hit. I'd stere clear of the sector in favor of biotech.

Links
- Roche and DNA via thestreet.com
- Who is next?: The report Dick Bove's getting sued over

Another Trading Week

Financials seem to have turned as Wells Fargo, Citi and JP Morgan reported "less bad" numbers while Merrill still delivered a worse than expected quarter. The sector is really carrying/pushing the broad market higher as excessive risk aversion reverses course. There seems to be a huge push into these names and out of energy and to an extent the staples (KO, PEP, DPS). This rotation is accentuated by short covering (we know there was a ton of shorts in financials). I was impressed by Fortress (FIG) today. It rallied from morning until afternoon with all pullbacks being bought. There was an especially appetizing opportunity later in the afternoon as it pulled back from 10.44 to 10ish and rounded out to rally into the close to 10.31. It truly had a hard time coming down and I would definitely keep my eye on it in the near term.

Tech looks like a complete wreck. GOOG as well as EBAY, VCLK, and MSFT have all disappointed recently. GOOG came in and opened around 497 providing what I thought to be a nice short opportunity into the tech bellweather. Expectations were too high for the stock and an air of vulnerability to economic weakness has seemed to seep into the internet story. That combined with a large gap below the current price helps form a nice bearish background for further GOOG downside from here. The trade has worked so far as the stock dropped as low as 479 on the day. I am negative on tech (with a neutral to slightly bullish view of Apple) and would use it as a short hedge for a portfolio or would look for more opportunistic directional bets in this sector as well. The tech safe-haven play seems to be unwinding.

Healthcare seems pretty solid. Merck reports earnings before the bell on Monday which could lead to big shakeup in the sector. I'm looking for a beat (but not betting on it) as a lot of bad info has been priced into these stocks and sentiment has seemed to turn making these pharma/medical device stocks the new loved stocks in the market (MRK's recovered from downgrades and PPH was up during the last market beatdown).

A Few Other Notes:
- DV has a tradeable chart. DV can be bought off the 200 sma. The stock showed pretty good strength on Friday, so I think it will hold up.
- KO, PEP, DPS have been and look like they will continue to be hated stocks that are vulnerable to further declines. Strength is non-existent especially for KO.

BRCM Rips Cover Off the Ball

BRCM as I mentioned in my last post has been exhibiting solid relative strength. It's just been getting persistently bought on all dips. Well today it is having its solid breakout day. It's up strongly now and may continue to rise. I would start taking some profits as its moved nicely, but keep in mind that the trend is up and dips are still likely to be bought.

STJ is also breaking higher. This thing has come from down below today to up nicely in the afternoon. It's really killing it here, but it reports earnings tomorrow morning so be ready to take it off if you don't believe in the fundamental story.

Looking Back, Looking Ahead

The broad market continues its downtrend. The VIX has yet to spike, financial turmoil continues, crude pushes higher, rallies are sold and lukewarm days tend to drift to the downside. Also, I think the argument that the S&P-- now just barely into bear market territory (20% decline from peak)-- might have more to go based on past bear markets performance has some credibility. The current housing decline is worse than the great depression and it has spread rapidly across the entire banking system making this seem like at least an average bear.

Also, bottom pickers are feeling the pain as Freddie, Fannie, and the rest of the banks get hammered. Financials are dangerous here and should only be short term trades. Anyone taking big positions in these names are essentially putting a loaded gun to their head. However, their movements as well as crudes can continue to be used as a market tell.

I've been impressed by the action in BRCM, LO (announced $400 million buyback Wed night), PLCE and gold. I'm thinking about taking a shot at ESLR as well for a quick spike. I also think its interesting to see ARRS bounce after gapping down significantly. I'm watching for that sucker to get to its 200 sma after filling the gap and then shorting it down (of course depending on the action).

RIMM has been a bit of a disappointment as it fell through its 200 sma and has had terrible relative strength. AAPL is much better at this point and looks like its worth a trade if it pulls back to the 200 sma again. Ipods, Itunes, and Iphone are essentials to a large part of the population now, as much as bread and water are (maybe not that much). Furthermore, macs are becoming the preferred computer of choice for kids going off to college and a major migration of frustrated PC users to the much more flexible OS X system continues to occur.

Wednesday's a day that could really move the market. Bernakes gonna be talking for a long time which could spell disaster. The Fed minutes from the June meeting are also going to be coming out.

Sell BUD

BUD's risen up enough to take some profit off. Although the deal is likely to go through, a 8% + gain in this market is nothing to sneer at.

Good USO Short; DAKT

Oil came blazing off the open and popped strongly after inventory data came out. However, was a good place to go short. It proved itself unable to move back up and get over that level. Oil is still setup to for a long trade in the intermediate term. I highly doubt this is the top in commodities and it is likely that the daily news blurb about World War III (Iran v. Israel) will pop up soon enough.

DAKT is set up to short. It's finding weakness at its 200 sma now as it has before. It is likely to fall back as the 50 sma comes in beneath and catches it below.