Watchlist 1.28.13 | Walk

The SPX closing over 1500 is nationwide news. Seeing quotes like this…

People are jumping on the bandwagon,” said Wayne Lin, a fund manager at Baltimore-based Legg Mason Inc. “The earnings are better. Economic figures are trending the right way. The legislators and the administration have gotten the message that they need to work together and investors are seeing that as a positive sign.”

…In articles like this, have me alarmed. One likely scenario I see playing out–as retail investors who were sitting in cash on the sidelines begin to have their faith restored in the US stock market and start chasing this 1500 breakout, the markets will continue to push up a bit more before the correction begins.

Exasperating the scenario even more, the financial twitter stream is top hunting & a continued slow and low volume walk higher will lure even more retail investor cash into the equation, making the rug pull even more fast & violent.

I already got burned once this month trying to top hunt the fiscal cliff rally and rather than attempt to do so again I will continue just trading the tape but will be extra vigilant on scanning for signs of the beginning of the correction. Stay nimble & don’t argue with your stops or trading plans. I believe there is still some great money to be made on the long side but when the risk/reward doesn’t make sense, be in a cash position.

This weeks list:

LONGS:

BIDU – Testing the ascending trend line and digesting on lighter volume. Price has been maintaining long term $108.00 support. Watching for a follow through during the first part of this week.

VHC – Ascending triangle pattern. Would like to see another 150-200% volume day to break it out over $35.50.

V – Low volume consolidation (flag) after a nice run on heavier volume. Watch for the buyers to step back in and push the price back to the highs $162.50+.

GGC – A merger between GGC & PPG have brought in the large volume into this name. I am watching this ascending triangle pattern for a possible push higher over the resistance.

EW – Ascending trend line has been maintained. I would like to see 300%+ average daily volume to clear resistance and make a run for the gap fill.

CSTR – This stock has been basing for 5 months. It is going to need a lot of volume to clear the recent highs. My buy trigger will be $54.25 if Friday’s volume stick is the beginning of accumulation.

SHORTS:

CVS – Looks like a rounded topping pattern and the selling is increasing. If it rolls over this week, a test of the previous base is a likely target ($50.00 to $50.25).

FIRE – Still watching this name from last week. As long as I see no evidence of accumulation, I will start to scale into it a new short position at a test of the descending trend line.

TIF – This one is on the short list because the volume to the downside has heavily outnumbered the volume to the upside, if it reverses and pushes higher over the descending trend line it could be a long position. Volume would have to be beyond significant.

NEM – Selling volume starting to increase at this long term support level. Next major support area I see below is $37.55.

I’m running through the fire,
@AffluenzaVirus

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Watchlist 1.28.13 | Walk

The SPX closing over 1500 is nationwide news. Seeing quotes like this…

People are jumping on the bandwagon,” said Wayne Lin, a fund manager at Baltimore-based Legg Mason Inc. “The earnings are better. Economic figures are trending the right way. The legislators and the administration have gotten the message that they need to work together and investors are seeing that as a positive sign.”

…In articles like this, have me alarmed. One likely scenario I see playing out–as retail investors who were sitting in cash on the sidelines begin to have their faith restored in the US stock market and start chasing this 1500 breakout, the markets will continue to push up a bit more before the correction begins.

Exasperating the scenario even more, the financial twitter stream is top hunting & a continued slow and low volume walk higher will lure even more retail investor cash into the equation, making the rug pull even more fast & violent.

I already got burned once this month trying to top hunt the fiscal cliff rally and rather than attempt to do so again I will continue just trading the tape but will be extra vigilant on scanning for signs of the beginning of the correction. Stay nimble & don’t argue with your stops or trading plans. I believe there is still some great money to be made on the long side but when the risk/reward doesn’t make sense, be in a cash position.

This weeks list:

LONGS:

BIDU – Testing the ascending trend line and digesting on lighter volume. Price has been maintaining long term $108.00 support. Watching for a follow through during the first part of this week.

VHC – Ascending triangle pattern. Would like to see another 150-200% volume day to break it out over $35.50.

V – Low volume consolidation (flag) after a nice run on heavier volume. Watch for the buyers to step back in and push the price back to the highs $162.50+.

GGC – A merger between GGC & PPG have brought in the large volume into this name. I am watching this ascending triangle pattern for a possible push higher over the resistance.

EW – Ascending trend line has been maintained. I would like to see 300%+ average daily volume to clear resistance and make a run for the gap fill.

CSTR – This stock has been basing for 5 months. It is going to need a lot of volume to clear the recent highs. My buy trigger will be $54.25 if Friday’s volume stick is the beginning of accumulation.

SHORTS:

CVS – Looks like a rounded topping pattern and the selling is increasing. If it rolls over this week, a test of the previous base is a likely target ($50.00 to $50.25).

FIRE – Still watching this name from last week. As long as I see no evidence of accumulation, I will start to scale into it a new short position at a test of the descending trend line.

TIF – This one is on the short list because the volume to the downside has heavily outnumbered the volume to the upside, if it reverses and pushes higher over the descending trend line it could be a long position. Volume would have to be beyond significant.

NEM – Selling volume starting to increase at this long term support level. Next major support area I see below is $37.55.

I’m running through the fire,
@AffluenzaVirus

Comments are closed.