Biding My Time with Biblical Plagues

I still have very little interest in stepping in front of the indices to short them here, instead opting for a few individual shorts.

Mostly, though, I am playing the Ebola stocks for momentum.

However, next week can be a different story, especially if the Russell fails below its declining 150-day and 200-day moving averages.

On the small cap ETF daily chart, the arrows point to $113 as being the first spot I would consider trying out TZA, provided we see rejection there. 

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I am still holding a core position in JO, the coffee ETN, after taking partial profits yesterday morning.

I may very well lock in another piece before the weekend for the sake of discipline, but the 30-minute chart, below, is basing out quite well again, with $40 above the next hurdle to clear and hold above.

Furthermore, the fundamental case remains firm, with this article serving as just one example:

“Coffee is pretty much going solo on the upside after triggering more (buy) stops and attracting new fund buying ahead of postponed forecasts for rains in Brazil,” said Rodrigo Costa, head of the coffee desk at brokerage Newedge in New York. “Everyone is afraid of the unknown.”

Brazil’s worst drought in decades has clipped output and sent futures prices up 88% since the start of 2014, pushing up prices for consumers. But when unseasonable rains fell in July, some trees started to flower prematurely. The rains were followed by more dry weather, which could force coffee trees to drop the flowers and not produce cherries, the fruit that surrounds the seeds that are roasted to make beans.

Brazil’s coffee-growing areas are expected to remain mostly dry until the second week of October, according to Sao Paulo-based forecaster Somar Meteorologia. That lack of moisture could hurt arabica trees already weakened by Brazil’s drought.”

Hat Tip: 12631 member @StuOnGold for the article and commentary.

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Courtesy of The PPT algorithm, here are the most current top five readings from my “12631 RELATIVE STRENGTH” custom-made screen, identifying which stocks are exuding some of the best performances to the market at-large at any given moment.

I look for stocks whose Daily PPT Hybrid Score surges, while the Weekly Hybrid has been negative over the past week. This can often yield stocks which are emerging from consolidations.

Members can click here to view and save the screen.

Sorted for at least 500,000 shares of daily average volume to ensure liquidity.

Please click on image to enlarge.

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Of the Ebola Triumverate, TKMR is acting the best this morning, compared to APT LAKE.

$27.50 looks to be the next upside resistance for Tekmira to clear before we look at $28, then $31.

What are you trading this morning?

The U.S. Dollar short squeeze is pushing it this morning, as any contrarian trades I have discussed regarding base or precious metals and miners is rendered wrong or too early–The difference between “being wrong,” versus “too early” is inconsequential for my style, as the Dollar strength is simply too potent. With that in mind, I took a few losses on my gold miner longs inside 12631. Until further notice, though, the metals and miners are on the back-burner unless we finally see Dollar weakness.

On a more upbeat note, the Ebola play TKMR is continuing with its bullish bent despite the volatile swings, as is the coffee commodity, JO.

Individual names like MBLY TWTR are intriguing longs here if the market bounce continues.

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If you are looking for some (quick) support buys here, a good algorithm screen to have, courtesy of The PPT, is one I made called “12631 Quick Bounce Plays.”

In the screen, I am looking to isolate stocks with positive daily Hybrid PPT scores, but negative weekly ones.

Thus, they are ripe for a quick bounce as the momentum seems to be turning, if only for a bit. I also screen for PPT Relative Strength scores, as well as volume and % from 50 day moving average.

Members please click here to view and save the screen

Here are the readings as of Friday’s close. Remember, we are talking about short-term flips here, not high quality, multi-week swings. Keep those stop-losses in place.

(Click on image to enlarge)

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