Welcome to a new year of opportunities!!!
We are currently on our third trading day for 2010 and so far the Bulls seem to be maintaining control over things. After the initial strong first day the market has returned to its very quiet with occasional slow spurts of energy creeping in behavior.
Below is a list of some of the stocks identified Monday that I want to continue to focus on now...
These are the best setups where many of these stocks have retraced the past couple months very close to their 200 period moving averages supportsand were being bought on the first day of the new year... odds favor they will be bought more on pullbacks this month and next: GS, MS, JPM, WFC, MET, CMG, BEN, GT, BBT, RGLD, GFI, GG, ABX, NEM, BVN, AU, AUY, BRK.A &.B, JCRR, MRO, DO, PTR, XLF
Other misc ideas I was attracted to their patterns and bullish tendencies Monday: F, FDX, TSL, CSIQ, AGU, VLO, HOC, TSO, WYNN, LVS, FCX, ETQ...
Checking out this week more in detail RETAIL (for 4th QTR momentum Jan seasonality plays), TECHNOLOGY, NAT GAS, HEATING OIL, METALS, STEEL, BRAZIL and CHINA ideas...
Last check in our Group Rotation DT/OD feature, we have no groups rotating down and 8 groups rotating from negative towards positive since the new year (Apparel, Banks, Clothing, Consumer Electronics, Gambling, Life Insurance, Security Brokers, Specialty Chemicals)... pretty much all the groups are holding steady with strength up... with the exception of three groups currently still holding negative: Food Retailers, Gold & Precious Metals (although they have acted very well since Monday and look like the rotation is now slowly up again after a hard Dec correction), and Integrated Oil & Gas (slowly getting better too)
I WILL UPDATE THIS LIST in later posts as I get more time to review all the markets in greater detail this week and next. This is just a 'quick look' observation so far this new year.
GENERAL OBSERVATION So Far for 2010: I am still fully invested going into the new year and if I had more cash would still be willing to put money to work into this year year.
Marc Rinehart's Random Rambling Observations for Today, Friday 8 Jan 2010:
(These comments and observations are in addition to previous post.)
Many of my favorite stocks I highlighted Monday and Tuesday in our real-time class continue to impress-- CMG, GS, MS, AGU, TSL, F, CSIQ comes to mind today...
I have had more time to review and find more interesting stock patterns to add to my list of interesting stocks to focus on 1st qtr 2010: SHLD, UPS, DB, WHR, X, KOL, PCX, OIH, FLS, CLF, CSX, OSIS, CLF, BUCY, MOS, CMI, CREE, RS, GLD, esrx, cmi, ice, sjm, joyg, teva, aks, cmp, XME, rtp, rs, hp, wlt, grmn, hal, fwlt, iyt, sid, cp, de, mee, hes pcp, mt, slb, bhp, tdw, ois, SWC, ibm, iym, fro, xme, cs.... riskier but attractive bottom picking ideas-- exm and ener???
I still really like the traditional momentum plays of the recent past-- AAPL, GOOG, BIDU, PLCN, ISRG, etc, etc... but my instincts, and the early January money rotation out of some of them is forcing me to be a little more defensive and not interested right now buying the shallow pullbacks.
I watch stock group and sector money flow a lot over the years for insights... right now we have one new group showing rotation down = Multi-Utilities this week.... Newer groups rotating upward a little more right now = Railroads, Diversified Industrials, Waste & Disposal Services.... Bank, Clothing, Gambling, Specialty Chemicals groups still seeing noticeable institutional buying this first trading week in 2010. (see last post for that updated list)
Going to look more at energy and technology next week in our class to see what are the latest favorites.
I think CME did a daily chart 'breakout' move today... am looking for BLK to do the same thing shortly...
(*** disclosurer-- I own some CME, BLK, GS, AUY and C for at least two months or longer and I have no plans to cover them near-term.)
Wed, 13 Jan 2010 Update--
Groups currently identified with (institutional money flow) Rotating Down are as follows: Telecom Fixed Line, Footwear & Personal Products, Internet, Travel & Tourism, Trucking. (means if you are bullish any of those categories to be careful)
Groups currently identified with (institutional money flow) Rotating Up are as follows: Delivery Services, Integrated Oil & Gas, Restaurants & Bars. (means if you are bullish these could be areas where you could try and identify or catch a new money uptrend... the Integrated Oil & Gas area be careful, more selective because we also are seeing NY Crude Oil in a pullback mode which could contain any new money flowing into that group.)
Everything else is holding the same as in reported in the last post.
The second week of the new year trading has shown contained selling or what looks like a combination of continued rotation out of some areas like the internet/computer area and just normal profit-taking after a good first week of trading last week. (Jay, aren't you glad I warned you not to buy this pullback at the higher ranges this time as I felt odds favored it was finally vulnerable to a bigger pullback... looks like I was right about GOOG.)
We are now entering earning season where the December numbers will start to weigh more heavily on the market. If you're bullish it looks like you can sit back and try to buy something a little cheaper now if looking for new ideas this week. If you have cash and you are dying to put it to work I would just stay little more patient now until supports become more obvious shortly or later this month.
One thing you could do now is focus a little more one earnings stocks in advance to see how you would play them depending on results.
more Wed, 13 Jan 2010--
Noticing these stocks exhibiting interesting bullish tendencies today: Covance (CVD), Northrop Drumman (NOC), Merck (MRK), Bidu (BIDU), Tenaris (TS), Sony (SNE), General Dynamics (GD), AstraZeneca (AZN), Frontline (FRO)... a few more that I am not as familiar with: Cognizant (CTSH), Xyratex (XRTX), Parexel (PRXL),
Like I said earlier this week,
just be patient now if you have bullish tendencies. Wait for the institutional traders, the real market movers, to bring their favorite stocks down to a cheaper, better area where they are, in all probability, planning to buy back what they are selling now. During earnings season you may see more "buy the rumor, sell the news" marksmanship but, all-in-all, things will be OK once those strategies run their course and better buy setups start to develop over time... just remain patient and you should get through this 'profit-taking' rotational phase just fine.
(01-13-2010 11:41 AM)Marc Rinehart Wrote: [ -> ]Wed, 13 Jan 2010 Update--
.... The second week of the new year trading has shown contained selling or what looks like a combination of continued rotation out of some areas like the internet/computer area and just normal profit-taking after a good first week of trading last week....
We are now entering earning season where the December numbers will start to weigh more heavily on the market. If you're bullish it looks like you can sit back and try to buy something a little cheaper now if looking for new ideas this week. If you have cash and you are dying to put it to work I would just stay little more patient now until supports become more obvious shortly or later this month.
One thing you could do now is focus a little more one earnings stocks in advance to see how you would play them depending on results.
Tuesday, 19 January 2010 --
Today in our live class we said the market had "bullish tendencies" for day traders today.
A few stocks that looked attractive today were SA buy setup in Apple (AAPL) and SLXP (aggressive buy today, stop loss below Friday low), and SB buy setup in US Steel (X)... GMCR was aggressive buy at 80 with stop loss below 79, trailing tight $2 trailing stops to protect little trade idea....
SHLD keeps rocking higher lately!
Earnings reports picking up now. Banks big tomorrow and Thursday.
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PS -- 1:40PM UPDATE: I forgot to mention, buy rotation has come back into the following groups that were neutral: Pharmaceuticals, Drug Retailers, Beverages (alcoholic), Food Retailers, Recreational Services.
Wednesday, 20 January 2010 -- Today should be a down day for you day-traders interested in what to do today...
Today the market opened down and continues to weaken the first hour of trading. Looks like we are back to a churning market were it is up one day and down the next. In addition, we may be into the "buy the rumor, sell the earnings" mode right now as I suggested could happen in a previous post earlier this month.
When the markets lacks consistent momentum, churning is the process whereby market makers buy and sell more quickly with no real commitment to holding a position other than for that day, with limited conviction to the market direction. This behavior continues until a trend eventually shows up again and then the process of accumulation of positions returns. Churning means if a market opens down one day it does not typically reverse direction, so day-traders basically trade the momentum of that day until the day is over or until the momentum for that day stops. If the market is up day-traders continue to trade with and upward bias for that day. Today the market opened down so, in my humble opinion, the day-traders are going to keep selling until they think the momentum pushing the market down is over later today... or that is my guess.
Stocks moving today-- IBM is down about $4 this morning so that adds pressure to the market today.... CREE is up and looks attractive for some momentum traders.... IOC looks like the uptrend is returning today. AMED will be bought on weakness over the next couple weeks as it continues to stretch higher, its better support near-term is around 56, 54, 52 increments.... RMBS also had a nice little reversal today; odds favor it will stay bullish over time so long as it does not trade below 20 near-term on the next pullback.... NRTS is interesting now so long as it does not retrace below 50 now.... SHPGY could still be attractive so long as it does not trade below 60 to 58 now... MTB might still be ok if it does not retrace below 70-69 now.
That is about all I am seeing for this morning. It is basically a down day but a few things are holding well. It feels like the selling might be a little harder today so more inclined to stay short if a day-trader.
Thursday, 21 January 2010 --
Today is a key breakdown morning and now officially we are in a bigger pullback mode. I took profits on some things that I have been in for several months so I can raise cash and stop giving up more profits. (A profit isn't a profit until you realize the gain...)
I have been warning for two weeks for bulls to be more patient now with new ideas and we anticipated at a minimum a churning or stock market 'pause' mode. But, now we are in a pullback mode which means Bears will be more aggressive and Bulls who are pigs could get slaughtered... as Jim Cramer likes to say.
Anticipating more pullback or short-term weakness to come so standing aside until I can identify lower-risk trade setups again.
We still like the very best performers but we think we can buy them back cheaper later. No immediate desire to re-enter immediately in next few days. This could be the big pullback many have been anticipating for months but it has not happened. Now it will.
I will update later today where I get this logic from and show you some charts and things to watch for in near future.
Friday, 22 January 2010 (noon) --
What I felt was going to be the normal anticipated pullback many have been waiting for for quite a while now, is now potentially a more severe pullback. I continue to suggest longer-term bullish people be extremely careful and VERY patient this time before you try to pick this bottom.
If my instincts are correct, the
DJ Industrial, for example, could be heading to
9,600-9,500 to 9,373 range. (25% daily chart pullback/200 exponential MA areas) ... It is a little pre-mature to suggest this, but I have to say what I am thinking is possible nevertheless to put into perspective what could happen to some of my more aggressive bullish friends.
I think the sudden, unexpected strong political switch in Washington DC from health-care to now fighting the banks could be adding fuel to a smoking gun that will now force Wall Street to show Main Street why it is still economically and financially vulnerable. As much as you need banking reforms, you don't want to scare the institutions that have kept this market rebounding the past year. I think they are scared now and that may not good!!!
Please be careful my bull friends... and good luck bears... who are finally making a little money the past few trading days.
Friday, 22 January 2010; Additional Observations (4:05PM update) --
If the Senate does not get the 60 votes necessary to confirm Mr. Bernanke to a second four-year term as chairman of the Federal Reserve before his term as chairman expires on Jan. 31, it will explain even more to me why all of a sudden a perfectly good bullish, healthy stock market has very suddenly and totally unexpectedly turned terribly defensive in just three short days!!!
Could it be possible Mr. Bernanke will NOT be re-confirmed???
You better stay tuned, monitor this political development very closely. This news article (see link below) better be just political posturing rather than a true possibility or all heck is going to come to the markets at the end of this month.
NY Times Business Headline-- "
2 Senators Oppose a Second Term for Bernanke"
http://www.nytimes.com/2010/01/23/busine...f=business
Monday, 25 January, 2010 --
We have a lot of good stocks coming out with earnings this week so this could prop up the market a little after last weeks selloff. Apple (AAPL) comes out with earnings, for example, at the close today.
The market is stable today. We would like to see if this can carry over into tomorrow's stock market action. The breakdown of late last week had forced market bulls to stand on the side until the market offers better clarification of its true near-term intent now that some recent key supports broke down last week. Will the rallies now lead to more selling opportunities? We are evaluating this. If the market is more stable this week we think it will be earnings driven.
In our Option DT Group Rotation feature we have identified more stocks that are currently experiencing more rotation (down) out of it, such as: Alternative Energy, Beverages (Alcoholic & Soft Drinks), Apparel Retailers, Broadcasting & Entertainment, Building Materials and Fixtures, Business Training & Employment, Clothing, Commercial Vehicles & Trucks, Computer Services, Computer Software, Containers & Packaging, Electricity, Financial Administration, Forestry & Paper, Integrated Oil & Gas, Media Agencies, Railroads, Real Estate Holdings, Real Estate Trusts, Security Brokers, Semiconductors, Tobacco, Trucking, Waste & Disposal Services, Water, Aluminum/Nonferrous Metals
We have no stock groups identified as rotating up right now.
Friday, 29 January 2010 --
Today is the last trading day for January. The US stock market has been a little more stable today but seems to be once again not holding early strength momentum. It appears the institutional money continues to hedge their positions, or they are continuing to take more money out of the market. Hence, odds are favoring the bigger pullback that started last week appears to be to heading into February.
At the beginning of the January I posted a survey to see how people felt about the economy this year, if they felt we would have a bull or bear market? So far we have 14 bulls (in various forms) and 0 bears. (If you want to participate in this poll, you need a password and then sign in. If you want a temporary password, email support@dynamictrend.com and tell them you would like a temporary password so you can vote on this poll.)
If the people who voted are correct, this strong stock market pullback that started last week should end up becoming a long overdue 'healthy' pullback. It should "eventually" lead to a bottoming phase, followed by a rally. If I am correct, the very best supports we should focus on-- DJ Industrial Average daily chart for example-- would be those numbers I posted earlier this month. Because of that I am still sitting on the sidelines for the short-term, waiting very patiently for both the "re-energizing time decay and price decline (what we talk about in DT room-size setups) to catch up with each other. I feel confident those lower, better longer-term support areas will hold for the near-term... but we still need to just be patient if a bull right now looking for new action.
Traditionally things are slow or cyclically depressed in the winter months. A late Jan/early Feb "controlled" pullback is really ideal if you are a longer-term bull. It increases your odds for some good buy setups next month and into March where we would anticipate more of a early spring rally.
My general impression right now is a great many of the really good companies stocks are priced too highly having risen so strongly for months without any kind of normal pullbacks but very minor ones.
I am still flat and not buying new stuff, not yet. Patience my friends, I think, will be rewarded later with better buy setups, lower risk ideas.
That is my guess, for now. Will update as the market continues to reveal itself in the coming days.
PS - FWIW, the recent strong money rotation out of the best groups seems to still support my above comments. As we end the week and month, you can see below there still is money rotating out of several groups and, as of today, not one group has been able to recover.
CURRENT ROTATION IDENTIFICATION
Groups Rotation Up (stronger) -- none
Groups Rotating Down (weaker) -- Banks, Coal (growing weakness), Defense, Exploration & Production (growing weakness), Gambling, Health Care Providers, Hotels, Industrial Suppliers, Leisure Goods, Life Insurance, Medical Supplies (growing weakness), Oil Equipment & Service, Pharmaceuticals (growing weakness), Specialty Chemicals, Specialty Finance.
Groups With Strength Up -- Airlines, Auto Parts & Tires, Automobiles, Diversified Industries, Food Retailers, Home Construction, Medical Equipment (close to turning negative though), Pipelines, Recreational Services, Restaurants & Bars (close to turning negative though), Specialized Consumer Services.
Groups With Strength Down -- Aerospace, Alternate Energy, Aluminum/Nonferrous Metal, Apparel Retailers, Banks, Beverages (Alcohol), Beverages (Soft Drinks), Building Materials & Fixtures, Business Support Services, Business Training & Employ, Clothing, Coal, Commercial Vehicles & Trucks, Commodity Chemicals, Computer Hardware, Computer Services, Computer Software, Consumer Financial Services, Containers & Packaging, Defense, Delivery Services, Electrical Comp & Equip, Electricity, Electronic Equipment, Exploration & Production, Financial Administration, Fixed Line, Food Producers, Footwear & Personal Prod, Forestry & Paper, Gambling, Gold & Precious Metals, Health Care Providers, Heavy Construction, Home Improvements, Hotels, Industrial Machinery, Industrial Supplies, Insurance (Non-Life), Integrated Oil & Gas, Internet, Iron & Steel, Leisure Goods, Life Insurance, Marine Transportation, Media Agencies, Medical Supplies, Mobile, Multi Utilities, Oil Equipment & Services, Pharmaceuticals, Railroads, Real Estate Holdings, Real Estate Trusts, Securities Brokers, Semiconductors, Specialty Chemicals, Telecomm Equipment, Tobacco, Transportation Services, Travel & Tourism, Trucking, Waste & Disposal Services, Water.
(End-Of-Day) Friday, 29 Jan 2010 --
Here is the current picture of DT Overall and Sector Rotation... notice the strong red color filling up to SB rooms. This type of rotation is what suggests a cautious market for bulls. If you get another two or three days of strong weakness these Trade Balance pictures could show red from the PC on down rooms. That is why I actually think it is not a pipe dream those DJ Industrial numbers I quoted earlier this month as a possible target are even more realistic now a week or so later.