Setups for Week of 09/27-10/01

In both my market wrap up on Friday, as well as in the videos I made last evening, I discussed the idea that the S&P 500 needs to negotiate the 1150 level. We know that 1150 has been a psychologically important price for the past twelve years, but that fact alone is probably not going to give us much of an edge in terms of trading this week. Therefore, we need to be even more precise with our strategy. With many of the leading stocks extended here, I believe the key to this week will be to focus on the names setting up behind the leaders that have not yet exploded to the upside.

Indeed, if we see profits taken out of names like $AAPL and $FCX, and properly rotated over to stocks setting up behind them, such as $ANR and $RIG, then we can have more conviction that there is some substance to this rally. The broader the participation we see, the less likely this rally will be remembered as a short-lived flash in the pan with traders and fund managers simply chasing diminishing pockets of strength.

Below, you will find my best trading ideas for the upcoming week. Feel free to pick and choose whichever setups best fit your style. Please keep in mind that these are trading ideas only. I also urge you to use stop losses in order to mitigate your downside risk. In general, I prefer a trailing 7-8% stop loss, unless otherwise indicated on my annotated charts.

I hope you find these ideas helpful.

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