Don't Take a Position in KR

KR busted right through the 50 sma pretty easily. Don't take any position.

Cover DLM

Cover DLM at 8.86 (got short at 9.30 or higher). This stock is dead money here.

End of the Day is Very Telling

After watching the market since my last post, I have become less enthusiastic about the action I'm seeing. There have been some pretty violent downswings (including one now) in the broad market and a lot of stocks have disinflated (ie AAPL, the RTH, and GS) harshly. I don't like to see gains fade like this in to the afternoon. It leads me to think that this action is the result of a bout of short covering and is not ultimately sustainable.


On a side note, USO lost some of its momentum today, but is still above its 50 sma. Helene Meisler posted a free article on thestreet.com that looks at the move in crude and where it's headed from here. I tend to agree with her, as I pointed out in my last post. The jump in the past few days really looks quite different than previous action. That could point to higher oil and a breakout to the upside. Here's the link to the article: http://www.thestreet.com/story/10403029/1/where-are-the-cries-for-100-oil.html

Today's Open Looks Positive

Today's action looks very solid. I didn't feel that the market opened up too strongly and thought buying off the open was very attractive. Turns out it was. The S&P is now up almost 2 % on the day with almost no stocks on my watchlist in the red. Everything from healthcare (SGP is flying) to tech (RACK, a stock that Cramer just totally threw out as terrible the other day is flying after a double bottom) to financials are rallying hard. As long as this rally holds into the close, I think you're probably going to get some follow through tomorrow. It looks like today could even mark a lower high that could propell the market up to test the 1390 level.

Sell STJ Into Strength

STJ is currently at 43.59. I would sell right here up 1.63% on the day and up 4 % on the trade.

Aggressive Buying in USO

I previously mentioned that I was looking for a range or top in USO and therefore oil. However, after the past two days I'm having to reconsider that stance. As you can see in the chart, USO came strongly off support and has flown right through its 50 sma on big volume. None of the recent moves in USO have been nearly this aggressive.

I think that USO has upside to 77.50 here and could fly right through that resistance if the news flow is right. If you're looking for a short term trade, you could get long here but where you'd put a stop loss is a bit of a question mark. If it does get to the 77.50 level or a bit above, watch how it reacts. If it's soft, take profits. If it's still strong, take a half off and hold on to the rest.

STJ is Interesting

STJ broke out of its triangle consolidation pattern Friday, something that was pretty amazing given the weak market. I think it has more to go here, I'd look to buy Monday.